Prospero Markets, an Australian retail FX and CFDs broker, is in hot water following a recent crackdown on financial fraud and money laundering activities. The company’s Australian Financial Services (AFS) license has been suspended by the Australian Securities and Investments Commission (ASIC), marking a definitive move.
Prospero Markets – ASIC’s Actions and License Suspension
ASIC’s action comes after a sequence of events that started with an Australian law enforcement agency raid on Prospero Markets’ premises. As disclosed in a FNG Exclusive story from last month, the raid was a component of a larger operation aimed at a money laundering network with operations located in China.
Since the raid, Prospero Markets, which mostly serves Chinese-speaking customers in Australia and the Far East, has been the subject of debate. During the operation, Ding (Dean) Wang, the company’s managing director and controlling shareholder, was notably taken into custody.
Prospero’s AFS license suspension is effective as of December 20, 2023, and it will last until February 28, 2024. During this period, they cannot provide financial services.
ASIC’s Justification and Concerns: Prospero Markets
What is concerning, though, is ASIC’s justification for the license suspension. ASIC did not specifically address the police raid or Ding (Dean) Wang’s arrest in its announcement. The regulator reprimanded Prospero not for the police raid or Ding (Dean) Wang’s arrest but for administrative failings.
Specifically, Prospero failed to submit its annual financial statement and audit report for the fiscal year ending June 30, 2023, within the required timeline and in compliance with its AFS license terms. The reprimand focuses on these lapses, highlighting a failure to meet regulatory obligations. ASIC cautioned that failure to address these issues during the suspension might lead to further consequences.
ASIC has additionally cautioned that the regulator may think about extending the suspension or maybe canceling the license entirely if Prospero neglects to provide these necessary documentation during the suspension term.
It’s not just this most recent event that Prospero Markets is dealing with. ASIC began probing Prospero on November 16, 2023, alleging possible breaches of the Corporations Act 2001 starting March 1, 2021.
ASIC Investigation and Collaboration
On December 19, 2023, Prospero Markets voluntarily ceased handling customer funds without ASIC’s explicit authorization. This decision reflects the company’s commitment to addressing regulatory concerns and cooperating with ASIC. It will uphold the undertaking until February 8, 2024, granting ASIC ample time to finalize its inquiry.
Prospero Markets anticipates honoring this commitment until February 8, 2024, providing ASIC with ample time to complete its inquiry. This is also actively supporting ASIC in its investigation.
Despite the license suspension, Prospero Markets retains the option to request an Administrative Appeals Tribunal review. This allows the company to contest ASIC’s decision and present its case for the reinstatement of the AFS license.
It grapples with uncertainty during an ongoing inquiry and license suspension. The company’s future in the financial sector is in jeopardy, raising concerns about its reputation. The challenging circumstances underscore a period of significant risk for Prospero Markets.