CHIEF EXECUTIVE of JP Markets Justin Paulsen has welcomed the Supreme Court of Appeal’s judgment that declared the liquidation of his trading company unjust.
The judgement comes a year after the company was liquidated following an application by the Financial Services and Conduct Authority (FSCA) over the fact that they were operating without a license for over-the-counter (OCT) transactions. There were also accusations that some clients struggled with making withdrawals.
In a statement on his social media account Paulsen said: “All five judges agreed in our favour and stated that the FSCA was wrong to shut down JP Markets and (the decision was) not just (or) equitable.”
“We are busy consulting our legal team regarding the process going forward.”
According to the judgement JP Markets was a solvent company which employed 70 permanent staff at a monthly cost of more than R1 million.
“It paid in excess of R1bn to thousands of clients during the period of three months preceding the liquidation application. It was not disputed that its own cash equity amounted to approximately R220m,” read the judgement.
“The Authority declined to make the complaints levelled against it available to JP Markets. JP Markets nevertheless pointed out that around 100 dissatisfied clients did not represent a large percentage of its approximately 300 000 clients. It said that it did its utmost to retain clients in a very competitive environment,” said the judgement.
The Court said JP Markets explained that denying withdrawal requests would be counter productive.
Last year Weekend Argus reported on complaints from clients such as Liesl Petersen, 36, from Parow who had approached the FSCA to investigate “interrupted access to trading” on the JP Markets website. Petersen at the time said she had been actively trading on the company’s site when there was a server interruption and she lost all her money.
“I have set out the interactions between JP Markets and the Authority in some detail to show that, contrary to what the court a quo found, JP Markets had not been guilty of obfuscation. The evidence, therefore, did not establish that the business of JP Markets constituted a systemic risk to its clients or to financial markets generally,” read the judgement.
“The result, the winding-up of JP Markets was neither just nor equitable. For these reasons I conclude that the court a quo erred in finding that it was just and equitable to liquidate JP Markets and that the appeal must succeed,” said the judgement.