The New Zealand Financial Markets Authority (FMA) has flagged a Christchurch-based company, Arena Capital Limited, operating a website with the name BlackfortFX purporting to offer foreign exchange services. The website doesn’t look like the one of a typical forex broker – no spreads, no assets lists – any material information for traders is pretty much missing.
The entity also seems to be claiming to operate some sort of managed account services under its “hedge fund” tab. Regardless, the firm has come under investigation by the FMA and the Serious Fraud Office due to multiple complaints from customers not being able to withdraw their funds.
The firm has come under investigation by the FMA and the Serious Fraud Office
The company Arena Capital Limited is registered on the Financial Service Providers Register and claims to be providing foreign exchange trading services to its clients. The FMA has denied the publication of additional information in order to prevent the hampering of the ongoing investigation.
The holding company behind the brokerage is registered at a residential address in the area of Spreydon, Christchurch, New Zealand. According to information listed in the Companies Office the sole shareholder and director of Arena Capital is Jimmie McNicholl.
At the same time, BlackfortFX’s website states that the address at which the firm is located is in Auckland.
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The investigation by the New Zealand FMA and the SFO could have solid grounds to start on, because the director consent form lodged with the Companies Office was completed by Lance Jack Ryan. The individual has been known as Lance Jared Thompson, and in 2005 he stole the identities of five dead people and was convicted of 63 charges including fraud.
The FMA said in its statement that it has obtained an asset preservation order over the assets of both Arena Capital and Blackfort FX and their associated persons.
Earlier this week, the FMA outlined that it will be more vigilant in determining the eligibility of companies to get registered on the Financial Services Providers Register (FSPR). A number of firms suspected of conducting Ponzi schemes and imposting as a foreign exchange broker have been abusing the lax regulatory regime in the country.
While registering as financial services providers, they did not require an FMA license to operate in the Ukraine or Russia, for example in the case of fraudulent brokerage Forex Trend. The New Zealand regulator removed 23 entities from the FSPR in 2015 and prevented about 20 companies from completing their registrations.
While the register is not maintained by the FMA, it has the authority to mandate the Registrar of Companies to remove companies in the case when firms are spreading false or misleading information.
The move has been triggered by numerous complaints from overseas clients of fraudulent companies who have had issues in recovering their funds.
The FMA has also received complaints over the last 12 months regarding Capital One. Clients of the firm claimed that the company has failed to act on their instructions for withdrawals from their accounts. Capital One failed to respond to a request from the FMA for information about these complaints. As a result, the firm was deregistered from the FSPR with effect from January 30, 2014.