Investors shocked, angry
Investors angry at losing money in what appears to be a bogus foreign exchange scheme run from Christchurch have turned against the scheme’s director and the Financial Markets Authority (FMA).
About 750 investors, mainly in Christchurch, this week learned the scheme run by Arena Capital Ltd, trading as BlackfortFX, appears to have been a scam with only about $730,000 of the $9 million invested left. Arena is registered on the Financial Service Providers Register (FSPR).
The FMA froze the assets of the company last month and it was placed in receivership. The receivers have found no evidence the operation ever traded in foreign exchange and say they have not identified any evidence it generated profits. Lance Jack Ryan, aka Lance Thomson, a bankrupt and convicted fraudster, is thought by receivers to have had a key involvement in the company now being investigated by the Serious Fraud Office.
The sole director and shareholder of Arena Capital is Christchurch businessman Jimmie McNicholl.
A Christchurch investor, who did not want his name used but who knows about 50 investors, said the general mood was ‘‘we have been screwed over’’.
‘‘Everything that was shown to us was fraudulent, including bank statements from Switzerland and the US and fictitious accounts of balances.
‘‘With the $730,000 they have that is only 8 per cent of what was put in. So we are probably looking at getting four cents in the dollar back if that. Why would Jimmie screw over his friends to live the life for a few months?’’
McNicholl’s Facebook page, which has been taken down, records recent overseas trips and extravagant living. He also bought a new Jeep Grand Cherokee.
While the Registrar of Companies maintains the FSPR, the FMA has powers to have companies removed from it ‘‘where it is likely a company is giving a false or misleading impression about the extent to which it is regulated in New Zealand’’.
Arena claimed in its advertising material to be ‘‘regulated by the Financial Service Providers’ Register’’.
A Queenstown investor, who invested $25,000, said he and friends in Christchurch were suspicious about Arena but were given confidence by the fact the operation was registered on the FSPR. ‘‘It seems a large majority of people were enticed to go in there after the registration in November. The FMA gives you a checklist of the things you should check before investing. One of them is checking the register. We had confidence they were protecting investors.
‘‘I’m 60 years old and before I ink ‘Stupid’ on my forehead I wanted to let you know we went through a process before we got involved.’’
In a statement the FMA said the FSPR clearly stated registration was not an official approval.
‘‘In late 2014 Blackfort’s registration was referred to us by the Companies Office who had concerns that Lance Ryan was involved with the business. We raised these concerns with the sole director Jimmie McNicholl and he provided a firm assurance that Lance Ryan would not be involved with BlackfortFX. On this basis the FMA did not have any grounds to object to the registration.’’
The FMA said it made further inquiries following Arena’s registration, which led to action including freezing its assets in May 2015.
‘‘We are not able to provide any further details, given the active investigation that is under way,’’ the spokesman said.