Prospero Markets Faces Suspension of ASIC AFS License

Prospero Markets

In the wake of a recent crackdown on financial misconduct and money laundering activities, Prospero Markets, an Australian-based Retail FX and CFDs broker, has found itself in hot water. The Australian Securities and Investments Commission (ASIC) has taken decisive action by suspending the company's Australian Financial Services (AFS) license.

This move by ASIC follows a series of events that began with a raid on Prospero Markets' offices by Australian law enforcement authorities. The raid was part of a broader operation targeting a China-based money laundering ring, as revealed in an FNG Exclusive report last month.

Prospero Markets, primarily serving Chinese-speaking clients both in Australia and across the Far East, has been at the center of controversy since the raid. Notably, the company's controlling shareholder and Managing Director, Ding (Dean) Wang, was arrested during the operation.

The suspension of Prospero's AFS license, which took effect on December 20, 2023, will remain in place until February 28, 2024. During this period, Prospero Markets is prohibited from providing financial services.

However, what raises eyebrows is ASIC's stated reason for the license suspension. In its announcement, ASIC did not explicitly mention the police raid or the arrest of Ding (Dean) Wang. Instead, the regulator cited administrative lapses by Prospero Markets, specifically its failure to submit its annual financial statement and audit report for the fiscal year ending on June 30, 2023, within the stipulated timeframe and in accordance with its AFS license conditions.

ASIC has further warned that if Prospero fails to submit these required documents during the suspension period, the regulator may consider prolonging the suspension or even cancelling the license altogether.

This latest development is not the only trouble Prospero Markets is facing. On November 16, 2023, ASIC initiated an investigation into suspected breaches of the Corporations Act 2001 by Prospero, covering the period from March 1, 2021.

In response to ASIC's concerns and as part of ongoing cooperation with the regulatory body, Prospero Markets Pty Ltd voluntarily agreed on December 19, 2023, not to engage in any dealings with client funds without explicit permission from ASIC. This undertaking is expected to remain in effect until at least February 8, 2024, giving ASIC ample time to conduct its investigation. Additionally, Prospero Markets is actively assisting ASIC with its inquiry.

It's worth noting that Prospero Markets retains the option to challenge ASIC's decision to suspend its AFS license by seeking a review through the Administrative Appeals Tribunal.

As the investigation unfolds and the suspension remains in effect, Prospero Markets faces a challenging period of uncertainty, with its reputation and future in the financial industry hanging in the balance.