While we have continued to respond to individual investor inquiries, we know that it has been some time since we have provided an update to the website. We genuinely understand your frustration at the length of time it is taking to conduct our distribution. We, too, are anxious to wrap up this case. Moreover, we have good reason to believe that investors will receive a significant recovery in this case – unusual for a fraud of this nature – and would love to get there. The distribution is the ultimate goal and the fun part for us, and we understand that it is the critical part for investors.
The Receiver is still prepared to conduct a distribution of funds currently in his possession as planned. However, each distribution is expensive, which incentivizes us to wait for all funds to be in the same pot and conduct just one distribution. That is particularly the case here where (1) there are thousands of investors, many of whom are located overseas, and (2) we have a quasi-governmental agency that has agreed to conduct one (but likely not more than one) distribution at no cost to the Receivership Estate.
The CFTC recently facilitated the entry of a Consent Order of Permanent Injunction, Monetary Penalty and Other Equitable Relief against the IB Capital Defendants Emad Echadi and Michel Geurkink (available here). Pursuant to the Consent Order the IB Capital Defendants have agreed to payment of civil monetary penalties as well as restitution totaling $35 million dollars. It is likely that the restitution payments will be made in part with funds held in the Netherlands, and through their agreement with the terms of the Consent Order, the IB Capital Defendants would not oppose repatriation of the funds to the United States. The restitution judgment exceeds figures we have previously been quoted regarding the total amount of funds frozen, and we are uncertain what the final total of funds to be repatriated will be. However, we still believe it is very likely that a significant amount of the funds will be repatriated. We would like to ensure that those funds are distributed on a pro-rata basis (proportionally in connection to the amount of the investor’s loss) to all investors in the US and abroad, and have a duty as court-appointed Receiver to advocate for this. We would also like to distribute those funds at once with the funds we currently have for the reasons mentioned above. We are working with authorities overseas to accomplish this, but multiple layers of domestic and international governments, confidentiality, and criminal and civil investigations have unfortunately meant that things move slowly. The Receiver originally estimated that the Dutch proceedings would continue into 2017, and while the timeline seems long and the Receiver had hoped a significant distribution would occur earlier, it looks like the distribution will coincide closely with original estimates of the conclusion of the Dutch proceedings.
We understand that investors have been involved in a scam already, and are leery of the Receivership’s moving target. However, we can assure you that we are doing our best to sort through the fallout of a complex, international fraud, in order to get as much of the funds as we can back to investors as efficiently and quickly as possible.
Thank you as always for your patience,
The Receivership Team
The Receiver is happy to share that the Claims Process has been finalized. At this time, we have returned Claim Determinations to all investors who submitted a claim, and have discussed all objections with those few who had one.
PLEASE NOTE that all investors who submitted a claim should have received a Claim Determination at this time. IF YOU BELIEVE YOU HAVE A VALID CLAIM AND HAVE NOT YET SUBMITTED A CLAIM FORM AND/OR RECEIVED A CLAIM DETERMINATION, PLEASE CONTACT THE RECEIVER IMMEDIATELY AT email@example.com. If you believe you have not received a Claim Determination, please review your records carefully to be sure you have not overlooked it before contacting the Receiver.
Pursuant to the Receiver’s recent update, the Receiver hopes to conduct one, final distribution of funds in the next few months. The Receiver anticipates that he will have more information regarding the availability of additional funds soon, and will only delay his distribution as long as additional funds reliably appear to be available for distribution in the next few months. If you have moved since you submitted your claim to the Receiver during the Claims Process, please send the Receiver your most updated address. To avoid delay, PLEASE ONLY SEND YOUR ADDRESS IF IT HAS CHANGED since you submitted your claim.
Thank you again for your patience, and please continue to review the ProphetMax Receivership website for updates.
The ProphetMax Receivership Team
*Please see the Court Papers page for new filings.
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS, AUSTIN DIVISION
United States Commodity Futures Trading Commission v. Senen Pousa, Investment Intelligence Corporation d/b/a ProphetMax Managed FX, Joel Friant, Michael Dillard, and Elevation Group, Inc., Civil Action No. A-12-CV-0862-LY
COURT-APPROVED NOTICE OF CLAIMS BAR DATE
THIS NOTICE MAY AFFECT YOUR LEGAL RIGHTS. PLEASE READ IT CAREFULLY.
On September 18, 2012, the United States District Court for the Western District of Texas, Austin Division (the “Court’) entered a Statutory Restraining Order (“Order”) appointing Guy M. Hohmann to serve as the Receiver for the assets of Defendants Senen Pousa, Investment Intelligence Corporation d/b/a ProphetMax Managed FX, and Joel Friant (collectively, the “Receivership Defendants”), including the assets of Defendants’ respective affiliates and subsidiaries (the “ProphetMax Receivership Estate” or “Estate”). On August 11, 2015, the Court entered an ORDER that authorized the Claims Process, set the Bar Date and authorized certain notice procedures in regard to the Claims Process and the Bar Date.
You are receiving this Notice because our records indicate you may hold a claim against the Receivership Defendants. Receiving this Notice does not mean that you hold a claim.
Deadlines for Submitting Claims
NOTICE IS HEREBY GIVEN that all investor victims of the ProphetMax fraud with potential claims for recovery of membership fees and/or investment amounts (“Investors”) from the ProphetMax Receivership Estate should file their claim with the Receiver so that it is actually uploaded and submitted on the Receiver’s online claim system (http://www.prophetmaxreceivership.com/Claim_Form_2.html) by 11:59 p.m. (prevailing Central Time) on October 27, 2015 (the “Bar Date”). All claims should be filed electronically with the Receiver on the Receiver’s online claim system at http://www.prophetmaxreceivership.com/Claim_Form_2.html.
Individuals or entities that believe they have good cause to either extend the Bar Date or to submit their claim by means other than the Receiver’s online system should contact the Receiver at firstname.lastname@example.org, or by letter postmarked no later than 30 calendar days prior to the Bar Date to request this relief, which relief may be granted in the Receiver’s sole discretion. Investors wishing to file a claim who do not have internet access may contact the Receiver by sending a letter to ProphetMax Receivership, c/o Guy Hohmann, 210 Barton Springs Rd., Suite 250, Austin, Texas 78704.
The Receiver would like to update you on a few recent, positive developments related to the ProphetMax Fraud and provide an anticipated timeline moving forward.
On 6/25, the Receiver posted an application by the Liquidator to the Supreme Court of Queensland providing analysis as to why, in the Liquidator’s view, Australia’s proportionate liability scheme should be applied to investors. As discussed in Receiver’s 6/25 update, if proportionate liability was applied to investors it would have reduced investors’ recovery significantly. The Liquidator’s application can be viewed [here].
After the Liquidator’s application was filed, the Receiver, CFTC and SEC made multiple communications to the Liquidator and Supreme Court of Queensland in an attempt to prevent the court from holding investors proportionately liable for the ProphetMax Fraud and so protect their recovery. The SEC hired Australian counsel to further represent its views on these issues. The Australian Securities and Investments Commission also intervened in the proceedings, and took the position that proportionate liability should not apply to investors. On September 5, 2014, Justice Byrne ruled that investors would not be held proportionately liable for the ProphetMax Fraud, which will increase the investors’ recovery from the Australian liquidation. Justice Byrne’s order can be viewed [here].
Since Justice Byrne’s ruling, the Receiver has learned that the Liquidator currently plans to conduct a distribution to investors prior to the end of 2014. In connection with the Liquidator’s distribution, please see the Liquidator’s Report to Creditors dated October 31, 2014, available [here]. In the report, the Liquidator discusses Judge Byrne’s recent order, upcoming distribution plans, and instructions regarding proof of claims. It is the Receiver’s understanding that the Liquidator must receive all proofs of claim on or before November 20, 2014 in order for the claims to be considered. If you wish to enter a proof of claim with the Liquidator, please ensure that you have done so by that date. Please contact Jennifer Huynh with Hall Chadwick, rather than the Receiver, should you have any questions regarding the Liquidator’s distribution. Unfortunately, the Receiver has no detailed information regarding the Liquidator’s distribution or whether the Liquidator has received any individual investor’s proof of claim.
Finally, the Receiver is aware that technical issues caused intermittent inability to access this website in recent weeks. While the technical issues have been resolved, the Receiver sincerely apologizes if any investor recently attempted to visit the site while it was down. As always, please feel free to contact the Receiver via email at email@example.com with any questions.
Guy M. HohmannReceiver for the ProphetMax Receivership Estate
The Liquidator has asked the Receiver to post his most recent application to the Australian court (the “Application”), in which he requests the court’s input on issues related to an interim distribution of the funds in his possession, including: (1) whether investors are owed reimbursement for the entire amount of their membership fees; (2) to what extent Australia’s proportionate liability scheme should be applied to reduce IIC’s liability (and amounts to be repaid) to investors; and (3) the proper way to provide notice to investors regarding amounts to be paid to them. The Application can be found in our Court Papers page as well as here: link to the "Application".
Please feel free to reach out to the Receiver with general questions about the Application - however, as the Receiver was not involved in the drafting of the Application nor the Australian proceedings, the Liquidator will best be able to answer any questions you may have.------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
At the request of the Agencies, ASIC provided the following update on the status of related proceedings in Australia:
“ASIC has been investigating Investment Intelligence Corporation and Senen Pousa and on 26 July 2012, ASIC obtained interim orders, by consent, in the Queensland Supreme Court over $3,092,799 held by St George Bank and $313,136 held by American Express Australia in the accounts of Investment Intelligence. ASIC subsequently sought order from the Court to have Investment Intelligence wound up, but prior to the trial of the proceeding, on 31 May 2013, Mr. Pousa appointed Blair Pleash and Richard Albarran of Hall Chadwick as administrators of Investment Intelligence.On 7 June 2013 ASIC filed an application to have the administration terminated and PricewaterhouseCoopers appointed as provisional liquidators of Investment Intelligence. On 12 June 2013 the Court made orders that the administration be terminated and that Mr. Pleash of Hall Chadwick be appointed as a provisional liquidator of Investment Intelligence. Hall Chadwick were subsequently appointed as liquidators of Investment Intelligence on 19 June 2013 after a creditor had Investment Intelligence wound up on the grounds of insolvency. Investment Intelligence Corporation Pty Ltd Creditors of Investment Intelligence Corporation Pty Ltd should contact Hall Chadwick [http://www.hallchadwick.com.au/media-releases/investment- intelligence-corporation-pty-ltd]. ASIC's investigation is continuing.”
Though the Agencies cannot provide you with legal advice, all victims should consider submitting their claims for return of their misappropriated funds to the Australian liquidator. This will help ensure that your losses are properly recorded and considered in the Australian proceedings.
We would like to give you a brief update regarding the Receiver’s efforts throughout the past few months and his plans moving forward. As you may recall, the Receiver was beginning preparations for a distribution last summer. Around that time the Liquidator was appointed in Australia, which raised certain questions including how best to go about the Receiver’s and Liquidator’s claims processes and distributions. Since his appointment the Receiver has been working with the Liquidator to reduce duplication of efforts where possible, and it was our hope that the Liquidator and Receiver would be able to conduct a joint distribution, thereby reducing the costs associated with the claims approval process and distribution itself. However, it is our understanding at this point that the laws applicable to the Liquidator will prevent him from participating in our claims and distribution processes.
Nevertheless, the United States Commodity Futures Trading Commission (“CFTC”) has been working with the National Futures Association (“NFA”), which will most likely conduct the distribution(s) to investors at no charge. At this stage the Receiver is prepared to move the Court to approve a claims approval and distribution process, and sincerely hopes to be able to conduct a distribution in the near future. However, an important outstanding matter remains involving funds held by an entity overseas, which the Liquidator and Receiver both believe should be remitted to their respective estates. The Receiver most recently proposed the funds be split 50/50 with the Liquidator, and received a counteroffer of a 90/10 split in favor of the Liquidator. Not only does the Receiver view the Liquidator’s counteroffer to be unreasonable, he also has concerns that such a split would constitute a violation of his fiduciary duties given that the Liquidator represents a more broad group of constituents than the Receiver. The Receiver has been working diligently with the Liquidator and also the CFTC, Securities Exchange Commission, and directly with the entity holding the funds to resolve the matter, but may be required to institute litigation against the entity to recover the funds. The Receiver and Hohmann, Taube & Summers have opened a separate matter dedicated to recovery of the funds, and the Receiver and his counsel have discounted their rates by 50% for fees incurred pursuing that litigation. It is the Receiver’s goal to obtain resolution regarding the funds prior to conducting a distribution in the event the Receiver obtains additional funds for the Receivership Estate, as he hopes to conduct only one distribution.
As a related matter, the Receiver would like to clarify that the Liquidator and Receiver are in fact engaging in separate claims approval and distribution processes. Therefore, investors should anticipate providing the Receiver with information in addition to and separately from any information sent to the Liquidator. The Receiver will let investors know when, where, and what to send his team as the time for a distribution nears, but nothing is needed at this time.
Thank you for your patience, and as always, please feel free to contact us if you have any questions. We will continue to update our website and Facebook page with any significant updates, and ask that you monitor the website regularly in the coming months as the Receiver begins to prepare for a distribution.-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Please see the links below to documents recently received from the IIC Liquidator in Australia. The links consist of: (1) a notice of the Liquidator’s meeting of creditors, to be webcast from Brisbane, Australia next Thursday, December 19 at 10:00 am (various local date and time conversions are listed in the notice); (2) an appointment of proxy form for voting purposes; (3) a formal proof of debt or claim form; and (4) a committee of inspection nomination form.
It is our understanding that investors must submit the Formal Proof of Debt or Claim form to IIC@hallchadwick.com.au at least 24 hours before the creditors’ meeting to be eligible to vote on any resolutions raised in the meeting. It is also our understanding that investors will be given additional time to submit the form for determination of individual losses and claim amounts in the Australian proceedings, but we continue to suggest that investors submit their proof of claim form to the Liquidator as soon as possible, and list all losses (including ProphetMax membership fees and investment amounts that have not been returned). To the extent you have specific questions regarding the voting process, appointment of proxy form, committee of inspection nomination form, or proof of debt or claim form, we recommend you direct those questions to the Liquidator. The Liquidator has suggested that all questions, either related to the forms or general questions to be addressed during the creditors’ meeting, should be sent to firstname.lastname@example.org at least 24 hours before the creditor's meeting. All forms other than the Formal Proof of Debt of Claim form should also be sent to email@example.com.
It is our understanding that investors must register at the following link to participate in or view the webcast: http://events.knowledgevision.com/staging/MELB_HALL_CHADWICK.html. Also, it is our understanding that in addition to submitting proofs of claim, investors must register at the following link to be eligible to vote: https://www.polleverywhere.com/register?p=2m5rx-1jtd&pg=ED8pHGy. The Liquidator has posted both links on the left-hand side of his website: http://www.hallchadwick.com.au/iic.
We have received a number of messages from investors that they have not received a response from the Liquidator to questions related to proving claims and/or filling out the proof of debt or claim form; the Receiver will request that the Liquidator address this issue in the creditors’ meeting, and again suggests that any specific questions are sent to the Liquidator prior to the creditors’ meeting.
Guy Hohmann,Receiver for the ProphetMax Receivership Estate