Prospero Markets Liquidation: $25M Loss Unveiled, Full Client Refunds Expected

Liquidator BRI Ferrier's report on Prospero Markets reveals $25 million in losses despite rapid growth. Full client refunds expected from $20 million in secured trust funds.

Key Insights

  • BRI Ferrier’s report on Prospero Markets reveals $25 million in losses despite rapid revenue growth to $28.5 million in 2023.
  • Liquidator has secured $20 million in client trust funds and expects full refunds to clients, with distributions anticipated between September and November 2024.
  • Prospero Markets’ closure linked to Australian Federal Police action against a China-based money laundering ring, with key executives prosecuted.

SYDNEY (MarketsXplora) – BRI Ferrier, the firm overseeing the liquidation of former ASIC-licensed broker Prospero Markets, has released its first Statutory Report to Creditors, revealing significant losses but indicating a likely full refund to clients.

Prospero Markets experienced explosive growth, with revenues surging from near zero in 2020-2021 to $28.5 million in 2023. However, this growth came at a cost, with the company accumulating losses of around $25 million by the time it was shut down in late 2023. Shareholder capital contributions of $30 million kept the firm operational during this period.

The liquidator’s report shows that Prospero Markets’ total revenues from July 2020 to April 2024 were approximately $42 million, while total costs reached around $65 million, primarily due to trading costs of $39 million and overhead costs of $18 million.

Prospero Markets Clients Set for Full Refunds

BRI Ferrier has secured approximately $4.5 million in company assets and $20 million in client trust funds. The liquidator estimates client trust claims to be between $19.1 million and $25 million, with the lower figure based on MT4 records and the higher on client proofs of debt lodged to date.

Notably, less than half of Prospero Markets’ clients have filed claims in the liquidation process. Despite this, BRI Ferrier expects to fully refund clients and discharge all creditor claims from available assets, including trust funds.

The liquidator anticipates distributing client trust funds between September and November 2024, with other creditor claims to be settled in subsequent months. The entire liquidation process is expected to take approximately another year to complete.

Legal and Regulatory Context

Prospero Markets had its ASIC AFS license suspended in late 2023 due to its ownership’s involvement in an Australian Federal Police action against a major China-based money laundering ring.

Two individuals directly involved in Prospero’s operations were prosecuted: Dean Wang, former signatory of the company’s bank accounts, and Ye Qu, former Director and Responsible Manager.

The liquidator noted that while the company appears solvent, investigations into its historical affairs have been limited. BRI Ferrier is seeking court orders to adjudicate all client claims, even for clients who haven’t submitted the necessary documentation.

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