More money recovered from alleged Ponzi scheme

Liquidators have recovered a further $35,000 from people who made money out of the disastrous Arena Capital Ponzi scheme. Photo / file

Liquidators have recovered a further $35,000 from clients who go more money out than they put into an alleged Ponzi scheme.

A Christchurch forex firm, which traded as BlackfortFX, has been in receivership since May 2015 after the Financial Markets Authority froze its assets and it was put into liquidation shortly after.

Liquidators say the company owes about 1110 clients about $7 million and its sole director, Jimmie Kevin McNicholl, has been charged with obtaining by deception Serious Fraud Office.

Ninety-five Arena Capital clients were paid out about $2.5 million more than invested with the business, and liquidators KordaMentha trying to get those funds back.

In their latest report, released yesterday, the liquidators said they had agreed repayment arrangements with 40 of these clients - up from 38 from August - and had received a further $35,000. A total of $718,000 had been recovered from the 40 clients.

According to the report, the liquidators also filed an application to the High Court on Wednesday seeking directions on how to distribute the recovered money to creditors and investors.

"We will remain focused on asset recovery actions. In particular, we will continue to concentrate on recovering money from debtor clients," the liquidators said.

"We await the court's directions on how claims must be treated, and surplus funds distributed. This will also determine what process we need to follow to pay clients their entitlement."

While Arena Capital marketed itself as a foreign exchange trader, co-liquidator Neale Jackson previously said there was no evidence that it had traded or generated profits for itself or its clients.

A High Court judge, in a dispute last year over how to treat funds deposited in Arena's accounts after its assets were frozen, said the company did not conduct any trades.

"Profits the clients were led to believe existed were in fact fictitious. Monies disbursed to clients to maintain the facade of an active operation were paid out from deposits from other clients. Arena was operating, in essence, a simple Ponzi scheme," Justice Cameron Mander said.