Director of Ponzi scheme BlackfortFX pleads guilty to obtaining FSP registration by deception
About 900 people invested approximately $8.3 million into what was in fact a Ponzi scheme.
The saga around the fictitious Forex broker Arena Capital Limited. also known as BlackfortFX, continues to develop in New Zealand.
Today, the New Zealand Serious Fraud Office reported that Jimmie Kevin McNicholl, the director of Arena Capital Limited, pleaded guilty to obtaining the registration as a financial services provider by deception at the Christchurch District Court.
Arena Capital used the illegally obtained financial services provider registration to give the misleading impression that BlackfortFX was a legitimate forex trading platform. No trading was ever undertaken. About 900 people invested approximately $8.3 million into what was in fact a Ponzi scheme.
The SFO has also charged Lance Jack Ryan, also known as Lance Jared Thompson, with fraud in relation to the matter.
Ryan has maintained a plea of not guilty in respect to obtaining registration of BlackfortFX as a financial service provider by deception, but has pleaded guilty to charges of ‘False accounting’, ‘Forgery’, ‘Reproducing documents with intent to deceive’ and ‘Theft by person in special relationship’.
McNicholl and Ryan are scheduled for sentencing at Christchurch District Court on June 20, 2018.
BlackfortFX, which had marketed itself as a foreign exchange company since the start of its operations in the spring of 2014, had never actually traded in the FX market, the investigation into its activities has found. KordaMentha were appointed receivers of Arena in May 2015, after New Zealand’s Financial Markets Authority (FMA) confirmed that it was undertaking an investigation into the “broker”. The FMA obtained asset preservation orders over the assets of Arena/Blackfort and associated persons amid concerns that investor funds might be at risk.
In October 2016, New Zealand’s Serious Fraud Office filed charges against Arena’s director Jimmie McNicholl. The SFO alleged that BlackfortFX had obtained registration as a financial services provider by deception. Under the allegations, BlackfortFX was a Ponzi scheme into which investors paid approximately NZ$8.3 million when there was in fact, no trading undertaken.
SFO Director, Julie Read said back then “There are hundreds of potential victims in this scheme whose funds will be at risk.”
