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03 July 2018

Arena Capital/Blackfort

Background

This case concerns the investigation, enforcement action, and subsequent criminal outcomes relating to Arena Capital Limited, trading as BlackfortFX, following findings of investor deception and the operation of a fraudulent investment scheme. The matter involved coordinated action by the Financial Markets Authority (FMA) and the Serious Fraud Office (SFO) and resulted in criminal convictions, liquidation, and ongoing receivership proceedings.

In May 2015, the FMA commenced an investigation into Arena Capital Limited amid concerns that investor funds were at risk. Asset preservation orders were obtained, and shortly thereafter the High Court in Christchurch appointed Grant Graham and Neale Jackson of KordaMentha as receivers and managers. By July 2015, Arena Capital Limited was placed into liquidation, with KordaMentha appointed as liquidators.

Preliminary findings by the receivers indicated significant misconduct. Approximately 750 investors reported placing funds with Arena, with total deposits of around $9 million. There was no evidence of any actual foreign exchange trading activity, no reliable financial accounts, and indications that some investor funds had been repaid selectively prior to regulatory intervention. The company has remained in receivership, and losses to investors were still being assessed at the time of reporting.

Criminal proceedings culminated in July 2018. Lance Jack Ryan, also known as Lance Jared Thompson, pleaded guilty to multiple charges including obtaining by deception, false accounting, forgery, and theft by a person in a special relationship. He was sentenced to seven years and six months’ imprisonment, with a minimum non-parole period of three years and nine months.

Jimmie Kevin McNicholl, the public face, sole shareholder, and director of BlackfortFX, pleaded guilty to obtaining registration as a financial services provider by deception. He was sentenced to 11 months of home detention and ordered to pay $50,000 in reparation. The FMA formally acknowledged these outcomes as the conclusion of a significant enforcement action against a large-scale investment fraud.

Any questions about the liquidation of the company should be referred to Calibre Partners (previously known as KordaMentha).

Timeline

3 July 2018

The FMA acknowledges the sentencing in the Serious Fraud Office’s criminal prosecution of Mr Jimmy McNicholl and Mr Lance Ryan, also known as Lance Jared Thompson. 

Lance Jack Ryan (44) has been jailed for seven years and six months, with a minimum non-parole period of three years and nine months. He had pleaded guilty earlier to charges of ‘Obtaining by deception’, ‘False accounting’, ‘Forgery’, ‘Reproducing a document with intent to deceive’ and ‘Theft by person in special relationship’.

Jimmie Kevin McNicholl (56) who was the public face of BlackfortFX, as well as its sole shareholder and director, was sentenced to 11 months of home detention and ordered to pay $50,000 in reparation. Mr McNicholl pleaded guilty in May to obtaining the registration as a financial services provider by deception.

27 July 2015

Arena Capital Limited was placed into liquidation in the Christchurch High Court on 24 July 2015.  Korda Mentha (the current receivers of Arena) have been appointed as liquidators.  

11 June 2015

The Receivers and Managers have provided an interim update to investors and the Court about the steps they have taken to date and the current status of their work.

Their preliminary findings include:

  • KordaMentha has been contacted by approximately 750 people who claim to have placed funds with Arena.
  • The collective deposits into Arena’s bank accounts from all sources amounted to $9 million.  Some monies were repaid to some clients before the FMA obtained asset preservation orders and before the company was placed in receivership, so the amount of capital contributions remaining owing to clients will be less than $9 million and is still being assessed.
  • There are no financial accounts for Arena.
  • There is no evidence of any actual trading being conducted by Arena in foreign exchange markets.
  • Arena continues to be in receivership

The investigation by the FMA and the Serious Fraud Office is ongoing. 

28 May 2015

The High Court in Christchurch has appointed Grant Graham and Neale Jackson of KordaMentha as receivers and managers of Arena Capital Limited, trading as Blackfort FX (Arena/Blackfort).

21 May 2015

The FMA confirms that it is undertaking an investigation into Arena Capital Limited (Arena), trading as BlackfortFX (Blackfort). The FMA has obtained asset preservation orders over the assets of Arena/Blackfort and associated persons, in light of concerns that investor funds may be at risk. Related media release: FMA secures Asset Preservation Orders over Arena Capital Limited / Blackfort.