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ASIC action sees OTC issuer wind up orders

Mike Taylor12 April 2024
ASIC Court breach director prosecution

The Federal Court has ordered that Over the Counter (OTC) derivatives specialist firm, Prospero Markets be wound up on just and equitable grounds and that liquidators be appointed.

The Federal Court’s order followed an application by ASIC which the regulator said it pursued because it holds a broad range of concerns regarding the management of Prospero’s business, including in relation to compliance with its Australian financial services (AFS) licence conditions and obligations as an OTC derivatives issuer under the Corporations Act.

Prospero’s AFSL was suspended in December after it failed to lodge its 2023 audited financial accounts with the suspension currently in place until 26 September.

ASIC said it commenced its investigation into Prospero following the Australian Federal Police’s Operation Avarus-Nightwolf which resulted in former officers and responsible managers of Prospero being charged with money-laundering offences in October 2023 relating to the Changjiang Currency Exchange money remitting chain.

ASIC said it has received enquiries from clients who are concerned about the return of their funds.

“In bringing the application, ASIC considered that the appointment of liquidators was the best way to ensure the efficient return of client funds,” it said

In making his decision to wind up the company Registrar Luxton stressed the importance for licensees to comply with the statutory obligations of an Australian Financial Services licence, such as the need to:

  • appoint and maintain an auditor
  • lodge audited financial accounts with ASIC
  • lodge monthly derivative client money reconciliations with ASIC
  • lodge annual derivative client money declarations with ASIC
  • provide derivative transaction reporting data to ASIC.

The appointed liquidators are Andrew Cummins, Jonathon Keenan and Peter Krejci of BRI Ferrier.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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