By voluntarily blowing the whistle and quickly pleading guilty to Serious Fraud Office charges, foreign exchange trader Kelvin Clive Wood was entitled to a reduction of nine months imprisonment, the Court of Appeal ruled. Investors with Forex NZ Ltd, now in liquidation, await final payouts whilst Wood serves a term of imprisonment now reduced to five years six months.
Wood offered financial services from his Half Moon Bay business, in Auckland. Clients were offered both retail foreign exchange deals and financial investments. The court was told over $22 million passed through Wood’s business from 2008. Clients were told their capital was protected. Foreign exchange speculation on client accounts by Wood ran at a loss. By late 2008, there was a shortfall. Wood kept trading through to May 2017. The court was told fictitious trading reports were sent to clients, falsifying account balances. A ‘Ponzi scheme’ evolved; new investment money and rolled over investments were used to pay clients asking for repayment.
In 2017, Wood himself blew the whistle, telling authorities of the fraud. Client transactions were conducted through two companies. Investigations identified there are 28 creditors owed $9.7 million by one company; four owed just over three million by the other.
Wood v. R. – Court of Appeal (11.03.20)
20.055