Liquidators recover money from Arena Capital ponzi scheme

Liquidators of a Christchurch ponzi scheme have recovered $2.8 million from the company and have entered into a settlement with the company’s director, Jimmie McNicoll.

Arena Capital, trading as BlackfortFX, was shut down by the Financial Markets Authority in May last year, putting it in receivership and liquidation.

Receivers later found Arena, a purported foreign exchange trader, had taken about $9 million from investors but never used the money for any trading or investment. Instead, it used money from new investors to pay fictitious profits to previous depositors.

In his third report, liquidator Neale Jackson of KordaMentha says its settlement of the claim Arena had against Mr McNicoll and a party associated with him will not affect the FMA or Serious Fraud Office’s investigations.

In the past six months, the liquidator has sold a Coatesville property that was purchased in May 2015 for $1.18 million using the company’s money and recovered a section in Christchurch bought at the same time for $253,000.

Some 95 investors received a total of $2.5 million more than they originally invested in Arena; 35 have had legal notices served to them because they are refusing to negotiate.

“We prefer to avoid formal legal action but it is in the best interests of all Arena’s other clients for us to take legal action where satisfactory repayment arrangements cannot be agreed,” the liquidator’s report says.

Repayment arrangements for 38 investors have been agreed to, resulting in $438,674 being recovered in the past six months, or $650,000 in total.

Fifteen of the 17 investors who paid $249,000 into Arena Capital a week after regulators moved to shut it down have got their money back. The remaining two are yet to supply the liquidator with information to get their funds returned.

KordaMentha has charged $107,675.

It is unknown when the FMA and SFO will complete their investigations.

The liquidator is planning a distribution to creditors with direction from the court.

Read the report here.

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