Victorian AFSL cancelled amid ASIC investigation
The Australian Financial Services Licence (AFSL) of a Victorian firm authorised to provide financial product advice has been cancelled as the business is being wound up, and the firm is the subject of an ASIC investigation.
Prospero Markets is in liquidation, effective from 25 September 2024, and previously had its AFSL suspended in December 2023 after failing to lodge audited financial statements for 2023. This suspension was originally expected to cease on 28 February, but was extended until 26 September 2024.
Its AFSL authorised the firm to provide financial product advice in relation to derivatives and foreign exchange contracts, deal in derivatives and foreign exchange contracts on behalf of clients, and issue and make a market in derivatives and foreign exchange contracts.
Since then, the Federal Court has ordered liquidators to wind up the firm in April 2024, and appointed Andrew Cummins, Jonathon Keenan and Peter Krejci of BRI Ferrier.
Under the Corporations Act, ASIC may suspend or cancel an AFS licence if the licensee is being wound up or if the licensee has ceased to carry on a financial services business.
In November 2023, ASIC commenced an investigation of suspected contraventions of the Corporations Act by Prospero, in the period from 1 March 2021.
The corporate regulator said it commenced its investigation into Prospero following the Australian Federal Police’s Operation Avarus-Nightwolf, which resulted in former officers and responsible managers of Prospero being charged with money laundering offences in October 2023 relating to the Changjiang Currency Exchange money remitting chain.
Earlier this year, a second company called Airrails, which was also part of Operation Avarus-Nightwolf and the subsequent ASIC investigation, saw its AFSL temporarily suspended from 21 June 2024–21 September 2024.
Prospero must remain as a member of the Australian Financial Complaints Authority (AFCA) until 25 March 2026, continue to have arrangements for compensating retail clients including the holding of professional indemnity insurance cover, and must comply with the ASIC Client Money Reporting Rules 2017.
Prospero may apply to the Administrative Appeals Tribunal for a review of ASIC’s decision to cancel its AFSL.
AUTHOR
Laura Dew
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