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Forex trader admits defrauding clients of $7 million

Media Release

20 March 2019

Forex trader admits defrauding clients of $7 million

A foreign exchange broker has pleaded guilty to running a Ponzi scheme to defraud his clients of more than $7 million.

Kelvin Clive Wood (69) pleaded guilty today at the Auckland District Court to representative charges of ‘Obtaining by deception’ and ‘Theft by person in a special relationship’ brought by the Serious Fraud Office.

The Auckland man created a Ponzi scheme after his foreign exchange brokerage began to suffer net trading losses. He used new investors’ funds to pay other investors their reported gains or to refund investment principal. None of Mr Wood’s clients were aware that their funds were being used to repay other investors.

More than $7 million of investment principal belonging to 18 investors was lost by the defendant over an eight-year period.

The defendant knowingly reported fictitious profits and false or inaccurate foreign currency trades to investors.

The Director of the Serious Fraud Office Julie Read said, “Mr Wood earned the trust of a group of investors through his personal and professional association with them. He misappropriated their funds and falsely reported trading profits so they would not seek to withdraw their funds. The SFO will prosecute all serious fraud matters brought to our attention to protect other investors and New Zealand's reputation as a corruption-free market."

The defendant has been remanded on bail to reappear for sentencing at the Auckland District Court on 24 July.

The Financial Markets Authority referred the case to the SFO to investigate in May 2017.

ENDS




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