Aussie Court Orders CFDs Broker Prospero Markets to Shut Down, Appoints Liquidators

Thursday, 11/04/2024 | 06:03 GMT by Arnab Shome

ASIC previously suspended its AFS license for failing to lodge annual financial statements and audit reports.

The regulatory action followed charges against some of its former employees in a $229 million money laundering scheme.

The Australian Federal Court has mandated the closure of Prospero Markets, a forex and contracts for differences (CFDs) broker, and has appointed a liquidator to oversee the process of returning client funds. This directive comes at the behest of the Australian Securities and Investments Commission (ASIC).

Prospero Markets Ordered to Wind Down

Issued on Thursday, the court mandated the shutdown on “just and equitable grounds.” Andrew Cummins, Jonathon Keenan, and Peter Krejci of BRI Ferrier have been designated as the broker's liquidators.

This regulatory directive emerged as ASIC expressed a “broad range of concerns regarding the management of Prospero’s business.” The regulator highlighted potential breaches of the broker's licensing conditions and its obligations as an issuer of over-the-counter derivatives.

The Troubled Broker

Prospero Markets provided leveraged trading services to retail and wholesale clients across CFDs of forex, metals, commodities, indices, and shares. It established its Australian operations in 2012 and provides its services in the Chinese language, in addition to English, indicating that it has a significant proportion of Chinese-speaking clients, although none of the numbers are in the public domain.

The brokerage first faced scrutiny last year and ASIC suspended its Australian Financial Services (AFS) license due to its failure to submit annual financial statements and audit reports timely. The AFS license suspension remains in effect until September 26, 2024.

ASIC's investigation into Prospero commenced last year after Australian police charged former officers and responsible managers of the brokerage with money laundering in October 2023. These charges were linked to the Changjiang Currency Exchange money remitting chain, accused of laundering nearly $229 million over three years.

“ASIC has received inquiries from clients who are concerned about the retrieval of their funds. In initiating this application, ASIC concluded that appointing liquidators was the most effective method to ensure the prompt return of client funds,” stated the Australian regulator.