The Federal Court of Australia has appointed liquidators for Prospero Markets Pty Ltd, a retail over-the-counter (OTC) derivatives issuer, as top officials face charges related to a money laundering scheme exceeding $200 million.
The decision follows an application from the Australian Securities and Investments Commission (ASIC), citing multiple concerns about Prospero’s management and compliance with its financial service obligations.
ASIC’s decision to seek the winding up of Prospero was driven by issues including non-compliance with Australian financial services (AFS) license conditions and obligations under the Corporations Act. The regulatory body said that Prospero failed to meet several requirements such as maintaining an auditor, lodging financial accounts, and submitting necessary derivatives transaction reports to ASIC.
“ASIC applied for these orders 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 (24-034MR),” the statement reads.
The appointed liquidators, Andrew Cummins, Jonathon Keenan, and Peter Krejci of BRI Ferrier are tasked with returning client funds, a priority for ASIC given the substantial amounts involved. The concerns escalated following ASIC’s investigation, which began after an Australian Federal Police operation that led to money-laundering charges against former Prospero officers.
The liquidation aims to address the ongoing inquiries from Prospero’s clients about the return of their funds and to secure compliance with regulatory standards.
Prospero holds AFS License and had been authorized to issue, make a market in, and deal on behalf of clients in derivatives and FX contracts, along with providing related financial product advice. This license was suspended in December 2023, after Prospero failed to lodge its 2023 audited financial accounts. The suspension is currently in place until 26 September 2024.
