Cape Town - Cape Town businessman JP Paulsen threw a party this weekend as his lawyers prepared to appeal the South Gauteng High Court in Joburg’s decision to liquidate his JP Markets forex trading company.
Paulsen posted videos on his Instagram account even though the court froze R2.58 billion in his company’s bank accounts this week.
The National Prosecuting Authority (NPA) is considering investigating Paulsen, the chief executive of online forex brokerage JP Markets, which is expected to be liquidated.
The court this week approved the Financial Service Conduct Authority (FSCA) application to have JP Markets liquidated, its assets to remain frozen and to work with the NPA if needs be to hold Paulsen personally liable for any wrongdoing. Paulsen is optimistic that justice will be served. His attorney, Darren Hanekom, said: “Our client would like to tell all JP Markets clients that the fight is far from over.
“We are advised that our client has sufficient funds to pay out all withdrawals, however, this process is now in the hands of the FSCA’s appointed liquidators. The company had been subject to a drastic remedy where many alternatives existed.”
In June, the company’s trading licence was suspended and while an investigation into their operations were under way, more than R2.58bn was frozen in JP Markets’ bank accounts.
Following the liquidation judgment, the FSCA said “the investigation against JP Markets and its CEO, Justin Paulsen, has been completed…
“The FSCA is also preparing to hand over the matter to the NPA for further investigation and possible criminal prosecution.” For its part, the NPA said it has not begun an investigation yet.
Hanekom, said: “Our client has not been privy to any so-called ‘evidence’ gathered during the application for liquidation. Our client is resolute on setting the record straight and will co-operate with any investigations.”
Hanekom also confirmed that Paulsen would appeal the liquidation of his company. “We hold instructions to approach the Gauteng Local Division for leave to appeal the 82-page judgment handed down by Acting Judge Barry Gilbert.”
He said it was in the interest of all online forex traders that the judgment be appealed. “This is a novel case and the first of its kind. “The FSCA has stumbled to a victory which has far-reaching consequences for the industry at large.
“As it stands, a precedent has been set; that any solvent forex brokerage can now be liquidated at the election of the FSCA and before the requisite investigation or inspection has been concluded.”
Former clients were hopeful of getting their money back. Liesl Petersen from Cape Town was one of several complainants who approached the FSCA to investigate “interrupted access to trading” on the JP Markets.
Petersen claimed that last year, she was actively trading on the company’s site when there was a server interruption and she lost R1.1 million.
A Joburg trader and former JP Markets client, who wanted to remain anonymous, said he had a claim of R215 000 against the company as well as R140 000 on his profile when the bank accounts were frozen.