New Zealand regulator brings forex fraud case

Christian MacLeod
New Zealand flag on background

A major regulator in New Zealand has brought allegations of foreign exchange fraud against a man who they claim scammed millions of dollars out of traders.

The New Zealand Serious Fraud Office, or SFO, claims that Kelvin Clive Wood ran a forex trading firm which ended up causing losses of over $1 million New Zealand dollars each in the case of its largest investors.

In total, over $7 million NZ dollars are believed to have been lost as a result of Wood’s alleged crimes. That figure is equivalent to around $4.5 million US dollars or around £3.5 million British pounds at the time of writing.

Wood, aged 69 years old and from the country’s largest city of Auckland, faces two separate charges – one of  “theft by person in a special relationship” and one of “obtaining by deception”.

He entered no plea when faced with these charges at Auckland District Court on Tuesday, October 23rd.

Wood is believed to have built up a Ponzi scheme over time. A scheme like this sees cash deposits from new investors being paid to existing traders in order to create the illusion of profits.

It only usually unravels once the supply of new investors runs out, and the fake gains can no longer be sustained.

In total, 18 people are believed to have lost out as a result of the scheme.

He is alleged to have commenced the crimes around January 2010 and managed to avoid being caught until May 2017.

It was around this time that the New Zealand Financial Markets Authority involved the SFO in the case.

In a press statement, the SFO gave more details as to what Wood is alleged to have done.

“Kelvin Clive Wood (69) of Auckland facilitated foreign exchange and trading services through two companies – Forex (NZ) Limited and Forex NZ 2000 Limited”, it said.

“Mr Wood’s clients placed money with him through his companies for the purpose of fixed interest term deposits, the purchase of foreign currency, general investment and foreign exchange trading purposes. Clients invested on the basis that their principal was not at risk.”

The New Zealand SFO was set up in 1990, and it implements the Serious Fraud Office Act.

According to its website, it exists to help defend “New Zealand’s reputation for transparency, integrity, fair-mindedness and low levels of corruption.”

New Zealand does indeed have a reputation for these things, although this is not the first time it has experienced cases of alleged financial fraud.

Last year, for example, it was revealed that a woman in the country had lost around $7,000 New Zealand dollars – £3,500 or so British pounds, or $4,500 or so US dollars – as a result of financial fraud.

“The FMA regularly receives complaints from consumers who have been caught out by slick websites and promises of high returns from off-shore. These complaints centre on products like binary options and foreign exchange trading”, a Financial Markets Authority spokesperson said at the time.

“Where an unlicensed, unregulated company based off-shore withholds money from an investor, it is very hard for the FMA to help.”


Christian MacLeod

Latest news

Yellen’s Curveball Comment Hammers Tech-Stocks. Is There More of That to Come?
This week was always going to be a busy one in terms of planned announcements but unscheduled comments from Janet Yellen have just turned volatility up a notch. Read more
This Week’s Announcements Will Update on the Big Question Hanging Over the Markets
Inflation is supposed to be bad for stocks, but despite signs that price rises could be on the way, equity indices keep rallying. Read more

Safest Forest Brokers 2020

Broker Info Best In Customer Satisfaction Score
#1 ForexTime LogoYour capital is at risk Founded: 2011 Global CFD & FX Broker
Number One Broker
BEST FOREX BROKER Visit broker
5
#2 Your capital is at risk Founded: 2015 Global Forex & CFD Broker
Number One Broker
LOWEST FEES Visit broker
4.9
#3 tickmill_logo-1Your capital is at risk Founded: 2014 Global Forex & CFD Broker
Number One Broker
Best Trading Conditions Visit broker
4.9
#4 BlackBull MarketsYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
4.8
#5 Forex Broker Pepperstone LogoCFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Founded: 2010 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
4.9

    Forex Fraud Certified Brokers

    LegacyFX Small Logo
    IC Markets Logo
    HYCM Logo
    IQ Option Logo
    Forex.com Logo
    skilling logo
    ATFX Logo
    BlackBull Markets Small Logo
    City Index Logo
    XM Logo
    OctaFX Logo
    Pepperstone
    Exness Small Logo
    Plus500 Small Logo