By Richard Smith
Let us consider Phoenix Forex Limited, a New Zealand company which, on 29th August 2013, was the subject of a warning from the New Zealand Financial Markets Authority:
FMA believes that Phoenix Forex’s claims about the level of returns made by its trading system are untrue, and that Phoenix Forex is misrepresenting the profitability of, and risks associated with, its trading system. Investments promising unusually high returns are often not legitimate offers. FMA urges caution by anyone considering dealing with Phoenix Forex.
Phoenix Forex is providing access to a foreign exchange trading system. Under this system, the investor opens an account with a third party broker and the investor’s account is traded for the investor using algorithmic trading software. Phoenix Forex undertakes extensive advertising, as well as making unsolicited cold-calls to potential investors. FMA understands Phoenix Forex requires investors to pay a substantial up-front fee of up to $25,700 to subscribe for the system.
Phoenix Forex has previously advertised returns of between 50% to 65% per annum, and continues to promote the trading system as providing high returns. In FMA’s experience, it is highly unlikely that this kind of investment can deliver such high returns. Phoenix Forex has not been able to provide any evidence to support its claims of having achieved these returns. Further, investments of this nature carry a high risk of loss of some or all of an investor’s capital, and losses can exceed the amount of the original investment.
On the day the warning was issued, the NZ Herald gave a bit more color, and a name:
Phoenix offers investors access to the OakFX trading platform, whose website said the company is “dedicated to the passive and semi-passive lifestyle income generation of its clients.”
“Phoenix Forex is ideally placed for growth, working with an aging population that seek an opportunity to make money working from their home computers,” OakFX’s website said.
The Herald called Phoenix Forex’s offices for comment but were told its director – listed on the Companies Office as Kendall Twigden – was out of the country.
By Sep 3rd, the NZ Herald has had more of a dig, and found “sales legend” Mark Brewer:
Mark Raymond Brewer, who had a brief time in the national spotlight when his brother-in-law was an Iraqi hostage, has pleaded guilty to one charge of breaching the Insolvency Act after an investigation by the Ministry of Economic Development.
The 39-year-old was bankrupted for a second time in March 2010 for a debt of $114,000 and one of the Official Assignee bankruptcy conditions is to not be involved in the direct management of a company.
He admitted breaching those conditions by taking part in the control or management of a computer software company, Intervest Global (NZ), which sold horse race betting software.
The company was placed in liquidation in September 2011 and Brewer is due to be sentenced in the Auckland District Court in October. His second bankruptcy was annulled in June.
The Herald can also reveal that Brewer is a self-described “sales legend” for Phoenix Forex Ltd, a foreign exchange trading system which the FMA issued a public warning about last week.
By the 6th of September, an NBR journo has interviewed Kendall Twigden, director of Phoenix Forex Ltd; she is just back from a European trip with Brewer. Brewer was not present at the interview. The journo’s car was keyed during the interview.
By the 7th September the NZ Herald has noticed that Phoenix Forex/OakFX have been making false claims about Phoenix’s charitable donations and then hiding them:
Most references to Phoenix Forex have now been removed from the OakFX website.
Before it was changed, the website said Phoenix Forex believed in “supporting local communities and deserving organisations throughout New Zealand”.
One of the charities claimed to be supported was the Starship hospital, which told the Herald it had no record of receiving donations from either Phoenix Forex or OakFX.
By the 8th, Matt Nippert, who’s been on a deeper dive, has the muck-raking in top gear:
Sunday Star-Times has obtained an audio recording of a Phoenix Forex sales meeting where Brewer – while he was an undischarged bankrupt – castigates his team for not selling enough of the OakFX packages and urged unusual approaches.
“You can go and give them a f…ing reacharound, mate, I don’t care. Be creative. Get the deal done, now. Take the money, now,” Brewer said.
Since NC readers are not necessarily a worldly lot, I should explain that this is a reach around:
That’s an unfortunate choice of imagery by Brewer. It won’t necessarily appeal all that much to Phoenix customers, and it implies a certain continuity with another part of his life. On Sep 15th the Sunday Star Times (print only) runs another Nippert story about Brewer:
Searches of liquidators’ reports and court records and interviews with former business partners and employees of Brewer have uncovered a trail of jail time, failed businesses, basd debits and lavish spending.
According to court records, Brewer was convicted of sexual violation in 1993 and sentenced to 18 months in prison. Brewer, then employed selling insurance, was found to have exploited his position to extract sexual favours from a 16-year old girl applying for a job.
Brewer unsuccessfully appealed the conviction in 1994 and the Court of Appeal ruling describes Brewer as sexually aggressive.
Rounding out the New Zealand leg of this story, we have a swanky restaurant funded by Phoenix Forex and directed by Kendall Twigden and David McEwen (and others) going into liquidation, reported 2nd October. On the 24th, Phoenix Forex itself, also directed by Twigden and (formerly) David McEwen, also goes into liquidation.
Before we head off to Ireland, there’s another chin-dropper of a statement in Nippert’s article of the 8th:
“A spokesman for the Official Assignee, who prosecuted Brewer for his activities with Intervest Global, said the Official Assignee was aware of his involvement in Phoenix Forex. “We are aware that he may have been involved in the management of that company. However, as he was already found guilty of management of a company while bankrupt, he can’t be prosecuted again for the same thing.” “
That’s not all: the Commerce Commission is fine with Brewer too: no investigation.
That’s not all, either: on 22nd October, Brewer is sentenced to nothing at all for his breach of the Insolvency Act, on the understanding that an associate of Brewer’s, David McEwen, is to hand over NZD190,000 to liquidators of Intervest Global by way of reparation:
The judge said he did not see the reparation as Brewer “buying his way out of home detention”.
“Mr Brewer, don’t do anything silly again in the future,” the judge said at the hearing’s close.
Even that’s not all: it appears that Brewer was a director of Regal Retreats Limited 2008-now. Since he was bankrupt from some time in 2010 to June 2013, we have another apparent irregularity: you aren’t allowed to direct a New Zealand Company while bankrupt.
So does it follow that in New Zealand, once you’ve been prosecuted for running one company whilst bankrupt, you can run as many more, while bankrupt, as you like? Does it work like that for theft in New Zealand too? Once you’ve been prosecuted for stealing a few bucks, you can steal as many more bucks as you like?
Whatever, here’s the first Irish connection, 29th October 2013:
The Sunday Star-Times understands staff of Phoenix Forex were told last week by Twigden – recently back from a trip through Europe – that part of the business was to expand to Ireland.
According to the Irish companies office, on August 23 Phoenix Forex Europe – described as being in the business of selling software – was incorporated.
On August 29…the company changed its name to Epoch Capital Partners.
That’s the very day that FMA issued its warning about Phoenix Forex. The Irish company formation agents duly purvey the usual pious waffle:
The directors said they would soon resign to allow the controlling directors and shareholders to take over.
And Twigden has this to say:
Twigden confirmed she had recently been in Ireland, but denied any link with Epoch.
“Phoenix NZ has nothing to do with this company,” she said.
An investigation into Phoenix Forex discovered the firm’s “sales legend” Mark Brewer, who pleaded guilty to running a business while bankrupt in July, has been romantically linked to Twigden since 2011.
An extract from the Irish company register states that Epoch Capital Partners Limited was set up on the 29th of Aug 2013 in Dublin 7. The company’s current directors, Kendall Twigden and Mark Brewer, were appointed, backdated to the 29th August, via a submission on the 24th of October. That’s five days before Twigden was in print denying any connection between Epoch and Phoenix. For what it’s worth, I don’t believe Twigden always tells the whole truth…
The same article gives a second Irish connection that brings in David McEwen, another name that orbits Brewer’s:
Further investigations by Fairfax Media have revealed the offshore venture Brewer and McEwen are preparing to embark on is Paymark Autotrade, another foreign exchange software scheme.
The Irish company is directed and co-owned by McEwen and former OakFX salesman Rupert Hogan. Brewer is listed as having registered the company’s internet domain name in September.
The company claims its software would allow “a small investment yielding high returns with protection of Capital Investment”.
McEwen told Fairfax Media Paymark and its product were “unrelated” to OakFx.
Meanwhile, as of 16th November, Paymark Autotrader is recruiting in Ireland:
“Paymark Autotrader wants you!
If you are a Sales Professional and have the hunger to be the best, the opportunities for you at Paymark are endless. We are offering a “BASE” salary of €20k plus commission incentive up to €40k.
We are an international company setting up in Dublin to distribute our award winning trading software product into Ireland and Europe. Paymark Autotrader is designed to trade the worlds largest financial markets, fully automatically, and deliver a passive income to our customers of 800 -1200 Euro a month.”
So, Paymark Autotrader’s software product does pretty much the same thing, purportedly, as OakFX. Possibly, when McEwen told Fairfax Media that Paymark and its product were “unrelated” to OakFX, he wasn’t being all that much more truthful than Twigden; or maybe it’s an entirely new product that does the same thing as OakFX, of course. Time will tell, I expect.
Also on the 16th November: Paymark briefly claim to have made a 40k donation to a UK Forces charity called “Army House.” Neither the charity nor its executive director exist. That echoes the NZ Herald’s observation of false claims about Phoenix’s charitable donations that later disappear.
With that back story, wariness of Paymark Autotrader is well warranted.