New Zealand-based Arena Capital Limited, operating the website BlackfortFX, has yielded only NZ$1.07 million ($720,000) in liquidated funds, far short of the NZ$7.0 million ($4.68 million) owed after a recent NZ High Court ruling earlier this week.
On Monday, BlackfortFX was ruled to be a Ponzi scheme by a NZ High Court, which decreed that the firm owed clients a total of $4.68 million for illicit activity,
BlackfortFX had been under investigation and under pressure by New Zealand’s Financial Markets Authority (FMA) since last May, which consequently froze its assets, paving the way for liquidation in August. Arena Capital Limited is registered on NZ’s Financial Service Providers Register, having claimed to be providing foreign exchange (FX) trading services to its clients.
Axia Extends Market Footprint in GCC RegionGo to article >>
The pressure was ramped up however, after a subsequent probe by both the FMA and the Serious Fraud Office into Arena Capital’s activities was launched amidst numerous complaints from overseas clients questioning the status of their funds. As of August 2015, liquidators from insolvency firm KordaMentha noted that Arena Capital had upwards of 1,110 clients.
An earlier report found that despite owing over $4.68 million to clients, BlackfortFX had only $728,000 in the company’s bank account at the conclusion of the investigation. In addition to the company’s standing bank account, liquidators recovered a number of assets include two vehicles, a plot of land purchased in Coatesville, Auckland, and several deposits for luxury vehicles.
Unfortunately for clients seeking restitution, liquidators could muster a total of only $720,000 in receipts, which included existing funds at BlackfortFX, interest received, the sale of all its assets, and the aforementioned vehicle deposits. FMA-appointed liquidators will continue to recoup funds from debtor clients and related parties, however the High Court’s initial sum of $4.68 million currently looks to be optimistic.