Australian Court Initiates Liquidation Process for Prospero Markets Following ASIC Application

The Financial Commission / Industry News / Australian Court Initiates Liquidation Process for Prospero Markets Following ASIC Application

An Australian court has mandated the liquidation of Prospero Markets, acting on a petition from the Australian Securities and Investments Commission (ASIC). ASIC’s request was based on various concerns regarding Prospero’s management practices and adherence to financial service commitments.

The move to liquidate Prospero stemmed from its failure to comply with the conditions and obligations of its Australian financial services (AFS) license, as well as its duties under the Corporations Act. Key issues highlighted by ASIC included Prospero’s lack of an auditor, failure to file financial accounts, and not submitting essential derivatives transaction reports to ASIC.

ASIC’s statement highlighted: “The application for these orders was made due to a wide range of concerns about Prospero’s business management, particularly its compliance with Australian financial services (AFS) license conditions and responsibilities as an OTC derivatives issuer under the Corporations Act (24-034MR).”

The appointed liquidators, Andrew Cummins, Jonathon Keenan, and Peter Krejci from BRI Ferrier, have the responsibility of disbursing client funds, a critical concern for ASIC considering the significant amounts at stake. This decision follows an ASIC investigation triggered by an Australian Federal Police operation, which resulted in money-laundering charges against former Prospero officers.

The objective of the liquidation is to address Prospero clients’ queries regarding the restitution of their funds and ensure adherence to regulatory standards.

Prospero, which holds an AFS License, was previously authorized to issue, market, and deal in derivatives and FX contracts on behalf of clients, in addition to offering related financial product advice. Following its failure to submit its 2023 audited financial accounts, its license was suspended in December 2023, with the suspension set to last until 26 September 2024.

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