FX trading system pulls out of NZ

A foreign exchange trading system is no longer being sold in New Zealand after regulators warned the public away from it and its distributor, Phoenix Forex.

Budding currency traders were being asked to stump up an up-front fee of up to $25,700 to subscribe to the OakFX software system.

The OakFX algorithmic trading software was being distributed exclusively in New Zealand by Auckland-based Phoenix Forex, which had previously advertised returns for users of between 50 to 65 per cent.

But the Financial Markets Authority (FMA) last week urged those dealing with the firm to be cautious.

"The FMA believes that Phoenix Forex's claims about the level of returns made by its trading system are untrue, and that Phoenix Forex is misrepresenting the profitability of, and risks associated with, its trading system," the FMA said in its warning.

Phoenix Forex's sole director and majority shareholder, 23-year-old Kendall Twigden, told the Herald she does not accept the allegations.

However, the trading system is no longer being sold in New Zealand due to the country's "regulatory environment" .

The OakFX website today described Phoenix Forex as its "previous distributor".

OakFX said those who had already bought a license for the platform would be supported from Singapore or Australia.

Although the OakFX website previously gave a phone number which connected through to Phoenix Forex, it now only provides details for an Indian office.

An employee from Phoenix Forex would not comment on the matter.

One of Phoenix Forex's shareholders, Auckland investment commentator David McEwen, said in an email that all questions should be directed to Twidgen, who is presently travelling overseas.

The Herald revealed today that twice-bankrupted businessman Mark Brewer is also involved with Phoenix Forex.

Brewer is understood to be travelling with Twidgen, who said in an email last week:

"I stand by the product we have represented and where issues have arisen have worked hard to resolve them for people. Far more it seems than most of the 'main stream' financial markets have done in the last five years."

- addition reporting: Jared Savage