This page is for information purposes only and you should consult your professional adviser if you have any questions or are uncertain as to your rights or obligations.
Please see below for the full Criminal Docket for case # 2:09-cr-00348 in the United States District Court, Central District of California (Western Division - Los Angeles).
|Criminal Docket for Case #: 2:09-cr-00348-UA-1, as of July 20, 2010|
In February 2009 a Grand Jury in the US District Court for the Central District of California brought an indictment charging Arthur Allen Ferdig with two counts of Tax Evasion. The Indictment had been sealed but is now public information; it can be read below.
|Arthur Allen Ferdig Indictment on Charges of Tax Evasion, dated April 14, 2009|
The Liquidator has learned that in June or July of 2010, Mr. Ferdig was taken into custody in Southern Florida by US Marshalls and has waived a detention hearing in Florida and instead will be transported to California where the hearing will take place.
Should further information become available, it will be made available here.
|Payments to 271 investor accounts have been processed and are being placed in the mail today and tomorrow. The cheques are being sent from our Halifax, Canada - the time of delivery to your area will depend on the Canadian, US, and perhaps foreign postal services.
The final distribution percentage worked out to be 1.9984% of your admitted claim.
You may check to see if your account is included in this mailing by opening the PDF list below. As stated earlier, if your account is not on this list but your claim is still open, your payment has been calculated and is being held in reserve subject to further review or information requirements. We will be looking at resolving these outstanding claims in the new year.
|List of Accounts to which cheques were mailed, dated December 3, 2008.|
[Nov 25, 2008]The Liquidator is in the final stages of preparations to distribute approximately $750,000.00 of recovered funds to victims of the Tradex investment scheme. Cheques are currently being prepared payable to Tradex Investors whose Proofs of Debt ("POD") have been satisfactorily proven as of today.
Of the 357 claims received claiming a gross loss of approximately $48.9M (a potential of $37M net), 271 representing $21.3M in net claims, are currently eligible for a distribution payment. Please see below for a current status list of account numbers for claims received to date.
If you are currently a Decision Code 2 or 13, you ARE eligible for a payment of approximately 2% of your admitted claim and will receive your payment by regular mail in the coming weeks.
If you are currently a Decision Code 3 or 14, your account requires additional review or information is required. A payment has been calculated and RESERVED based on the gross amount of your claim and will be released pending satisfactory resolution of your claim. Please stand by for additional information.
If you are currently a Decision Code 4, your claim has been rejected as filed and a formal notice of disallowance will be issued. A payment has been calculated and RESERVED based on the gross amount of your claim and may be released upon successful appeal by the Investor in the High Court of Dominica.
[Oct 30, 2008]- Update on Processing of Proofs of Claim -
The Liquidator is making progress on the review of approximately 357 claims received to date. See below for a summary of the overall status of claims as well as a detailed listing from which investors may determine their individual status. We hope to be able to distribute dividend cheques by Christmas to claims which are currently admitted.
|Summary of Tradex Proofs of Claim, dated October 30, 2008.|
|Detail of Tradex Proofs of Claim, dated October 30, 2008.|
|As previously reported, the Liquidator plans to distribute approximately $750,000.00 amongst those creditors of Tradex Ltd. who have filed valid claims with the estate. The deadline for submission of claims has passed and if your claim has not been received, you will not be eligible to participate in this interim distribution.
Claims will, however, still be received and processed in due course. Those claims received and admitted after today will be eligible for payment in the event that a second interim distribution is paid. At this time it is impossible to predict how much, if any at all, might be payable in a second interim distribution.
To date we have received approximately 355 Proofs of Debt, representing claims of over $19 million. Approximately $9 million of these will be admitted as filed, however, many are still being assessed for validity and to determine the final value of the claim. This process has proven to be a significant challenge due to the lack of any consolidated financial information regarding Tradex and the significant passage of time since many investors made their investments.
Records from both sides are scarce, however, we are doing all that we can to recreate the necessary information to be able to assess each claim given that many investors are unable to provide first hand documentary support for the claimed value. The Liquidator's staff is having to research data recovered and consolidated from seized company computers and subpoenaed bank records in order provide investors with every opportunity to be included in the payment. This is a very tedious and time consuming process and requires that we extend the timeframe for issuance of the payment, most likely until late November 2008.
See below for the list of accounts for which a Proof of Debt has been received. Receipt of a claim does not guarantee eligibility for payment.
If your account is listed with a Decision Code #2, then your claim has been admitted as filed, i.e. for the net value of cash contributed to your Tradex account minus cash you may have received back over the years. If your Decision Code is #13, then your claim has been admitted pursuant to additional review. If your Decision Code is any other #, then your claim has either been processed and requires further investigation, or it has been received but not yet reviewed.
Most account numbers begin with the prefix 1000 followed by a four digit account number, however, some account numbers begin with the prefix 999 or 888 followed by a four digit account number. Please search for your account based on the four digit account number.
[Jun 30, 2008]See below for a Notice of Intention to Declare a Dividend from the estate of Tradex Ltd. The dividend process allows for the submission of new claims, a final assessment of claims, and time for the resolution of disputed claims. Therefore, we anticipate that a payment will be ready for distribution in approximately 60 to 90 days.
[May 15, 2008]The Liquidator is preparing to announce the details of an upcoming distribution payment to approved Tradex Investors. More information will be posted in the near future, however, in order to ensure that our records are up to date, we are asking all investors to send an email to email@example.com with the following information:
[Apr 18, 2007]The Liquidator has substantially completed the bulk of the investigative phase of this liquidation. The records of Tradex, when finally recovered, contained little of real value in accounting for the funds raised from investors and we have had to recover information from many jurisdictions, mostly requiring Court action, as a result. These investigations have been extensive and expensive, and limited by the funding available.
From this work we now have a reasonably clear picture of the movement of funds through Tradex and can account for the bulk of it. It is clear from this that only a small part of the funds raised were in fact used for foreign exchange trading. Notwithstanding the reports of profitable trading those limited transactions that took place did so at a cumulative loss. Mostly, the monies that were sent to Singapore where the trading was supposed occur, were re-directed elsewhere and not traded.
In summary investors funds were used for the following purposes:
Until such time as the recovery actions are all filed I cannot disclose more detail nor the specifics of the assets and properties under scrutiny. However the Creditor Committee formed at the Depositors meeting in California has been active in providing advice to the estate and balancing the use of the estates resources with the opportunity for a meaningful return to depositors. They are bound by confidentiality agreements and also cannot provide additional information at this point.
Questions have been raised as to the potential for Susan Lok's compliance with the restitution order made against her at the time of her conviction. Based on enquiries the estate made as to her financial substance it is unlikely that she will be able to make a contribution that would give a return to investors.
[Oct 12, 2006]In Los Angeles yesterday (October 11, 2006), Tradex's currency trader, Susan Lok, was sentenced to 120 months in prison and ordered to pay over $27 million in restitution for her part in the Tradex scheme. Additional details will be posted here if and when they become available, or you may contact the US Attorney Victim Specialist, Mr. Jeff Alabaso, whose details are listed below.
[Aug 14, 2006]The following summarizes the Liqudator's activities since the most recent update to this Web site. The Liquidation has advanced to a stage at which the Liquidator is in a position to release a more detailed report of certain facts and the overall state of affairs than has been previously possible. As there continue to be ongoing constraints concerning the wide release of specific material information, this update is accordingly still not all-inclusive. As the need for confidentiality declines, future updates will contain additional information.
This update considers only the events and activities of the civil liquidation and does not address any criminal investigation in any jurisdiction. Questions concerning criminal proceedings should be addressed to the appropriate law enforcement office.
Proofs of Debt
To date 284 Proofs of Debt have been filed with the estate. The collective amount claimed, net of interest, is approximately $33.8M. These claims have not yet been adjudicated and have, therefore, not yet been admitted in the estate.
The adjudication process is ongoing but has been slowed pending the completion of an analysis of over 60,000 internal accounting transactions and several thousand banking transactions which collectively record investor activity from Tradex's origins in 1996 through to 2003. Once this activity has been completed a notice will be issued on each claim indicating whether the claim has been admitted as filed, rejected as filed, or whether additional information is required in order for a determination to be made.
Examination of Susan Lok
On July 6th and 7th, the Liquidator, through his local counsel in Los Angeles, California, took a deposition from Susan Lok in relation to her knowledge of the affairs of Tradex.
The examination did not dislcose any assets or bank accounts that were previously unknown to the Liquidator.
Ms. Lok indicated that, while some level of trading activity took place, the number of actual trades were frequently and significantly over-stated to Tradex. The Liquidator continues to gather the information necessary to quantify the effect of the mis-reporting of trading activity.
Ms. Lok's deposition confirmed the Liquidator's understanding that many investors from the California area, numbering in the range of 70 individuals, were introduced to Tradex by a third party. The transactional records supporting the contributions and withdrawals, the trading gains and losses, and other miscellaneous account activity, appear not to have been accounted for in the Tradex books and records that are presently available, however, this information may potentially be compiled from other various sources. Investors who believe they may be included in this category and who have not filed a POD are encouraged to do so.
As previously stated, the Liquidator is actively obtaining information from numerous sources in several jusridictions, with the assistance and cooperation of the Courts.
Information that has been received to date has enabled the Liquidator to trace and freeze assets acquired with Tradex funds which include the following:
Having earlier recovered numerous boxes of Tradex records from Rita Laframboise in Montreal, Canada, the Liquidator continues to engage legal counsel in Montreal in an effort to recover approximately $110,000 of Tradex funds. These funds continue to be claimed by Ms. LaFramboise as the balance owing from a $350,000 retainer that was paid to her company, LMSI for "due diligence procedures" purportedly conducted by LMSI in 2003. This matter is still before the Court in Montreal.
At this point the Liquidator is still unable to fully report an accounting of investor funds as certain information is still incomplete or the release of which would jeopardize the recovery of certain assets.
It is clear that Tradex investors will ultimately suffer a significant shortfall on their investments. It is impractical to predict the quantum of the ultimate loss at this stage as there are a number of ongoing initiatives which remain to be concluded with a view to maximizing the recovery into the estate of Tradex Ltd. for the benefit of each proven creditor.
The Liquidator appreciates that there remain many unanswered questions in the minds of the investors. At the appropriate time, reports on the activities of Tradex will be filed with the Court in Dominica, which reports, if unsealed, will be released to the creditors via this Web site. Ultimately, any documents that were sealed with the Court for the purposes of operational security will be unsealed and available to the creditors at large.
Your continued patience is appreciated. As always, the Liquidator or his staff is available to answer questions that may arise, within the parameters of what will not compromise the integrity of the liquidation. Contact information is available on this Web site.
Further updates will be posted as information is available.
[Apr 11, 2006]As many of the investors in Tradex are likely aware, Susan Lok has pleaded guilty to four counts of wire fraud with respect to transactions in the Tradex matter. The Liquidator has been in contact with Victim-Witness Specialist, Jeff Alabaso, at the office of the US Attorney concerning the Susan Lok case. Mr. Alabaso advises that a sentencing hearing will take place on June 6th, 2006, at 11am before Judge King. Any one who is a victim of the Tradex scheme may make a written submission to the Judge stating how the crime has impacted them. Submissions should be written and sent as follows:
Address your letter to:Mr. Alabaso will assemble all the written submissions and present them to the Judge prior to the hearing.
You do not require documentation from the Liquidator in order to be recognized by the Court as a victim in the Tradex matter. Additional questions or concerns regarding the conviction of Ms. Lok or ongoing criminal cases in the Tradex matter should be directed to Mr. Jeff Alabaso, Victim-Witness Specialist, at the address noted above.
[Feb 10, 2006]The Liquidator continues to recover information from various and numerous sources which are helpful in accounting for how Tradex investor funds were used.
The volume of information that has been produced by third parties is substantial. Analyzing such documentation requires considerable time and resources and is an ongoing process.
On November 16, 2005, a meeting was held between the Liquidator and his legal counsel and the members of the creditor committee who were appointed by the creditors at the April 14, 2005 general creditor meeting in Los Angeles. At this time the committee was brought fully current on the status of the liquidation.
At the meeting, there was discussion and input from committee members on: the identification of assets for potential recovery; the status of receipts and disbursements to and from the estate; the relationship between Tradex and Banc Caribe and the level of funds that were available to the estate from Banc Caribe; the relationship between the Liquidator and the criminal authorities; strategies and approach with regard to specific leads, and various other matters.
While the discussion among the committee members was broad and very open, there currently still exists the requirement for discretion and operational security in terms of what information can and cannot be released to the general body of creditors.
The following message was issued by Mr. Doug Laird, a member of the creditor committee:
"On Thursday, November 16th, at the PriceWaterhouseCoopers offices in Miami, Florida, the Tradex Creditors Committee met with the PWC personnel who are handling the Tradex case. The Committee was unanimously impressed with their competency, their aggressive achievements and their dedication to the interests of the Tradex investors. Committee members attending the meeting were Dan Myers, Rich Puls and Doug Laird. Bob Judd and Tom Jarvis tried to attend but a highway accident and irresolvable conflict of schedule kept Mr. Judd from the meeting but both participated in the meeting by a telephone conference link to each one.
[Sep 13, 2005]The Liquidator understands that many investors have not received any official update on the status of the Tradex liquidation and, from this, may draw the conclusion that little or no progress has been made since the meeting in Los Angeles in April. On the contrary, significant gains have been made in terms of information-gathering from numerous sources and the Liquidator's staff is in the process of analyzing this information and following up on leads to potential assets.
The Liquidator's office is in regular contact with law enforcement in the US and Dominica and is working closely with these agencies, to the extent possible. The majority of what has been learned over the past several months cannot, as was previously cautioned, be made generally available at this time due to concerns of operational security. The time will come when all of the Liquidator's actions and knowledge of the affairs of Tradex will be publicly available.
A comprehensive, regularly scheduled report will be made to the court in the coming months and parts of the report which are not sensitive may be made public at that time. Until that time, the Liquidator appreciates your patience and encourages anyone who may have information which could lead to the recovery of assets or funds belonging to, or acquired with Tradex funds, to contact the Liquidator's agent, Mr. James Pomeroy, at the contact points listed on this Web site. Contact can be made on a confidential, but not anonymous, basis. As always, any investor who may have a general question or comment may contact Mr. Pomeroy.
The informal creditors' committee is now complete after suffering delays due to summer holidays and the duration of the background checking process. Five members have been confirmed and a posting will be made to this Web site as soon as all members have executed the required agreement document. Once the committee is in place, the members will serve a sounding board for both creditors and the Liquidator as the process moves forward.
Finally, while a synopsis of the informal meeting of creditors had been promised for some time, it was decided after reviewing the transcript that there were far fewer edits required than originally expected and that a synopsis was unnecessary. Therefore, in lieu of a summary, the full body of the transcript was posted to the Web site for all to see, save for a few very short sections. It was decided that creditors should be given the opportunity to read as much of what transpired at the meeting as possible to avoid any perception of censorship.
[Jun 17, 2005]A copy of the transcript of the April 14, 2005 informal meeting of creditors has been posted to the Meetings of Creditors section of this Web site. The transcript has been edited for public distribution, however, as agreed upon at the meeting, a complete un-edited version will be filed with the Court in Dominica and with the US Federal Bureau of Investigations. The accuracy of the un-edited version was, or will be, attested to by the three members of the Informal Creditors Committee who were in attendance.
A brief summary of the proceedings will follow soon.
[Apr 21, 2005]On April 14, 2005, an informal meeting of creditors took place in Los Angeles, California. Thirty-three investors attended the meeting, by general consent, the attendees requested that the Liquidator post a list of the attendees on this Web site. Please go the Meetings of Creditors section to download this list and other material that was available at the meeting.
[Mar 29, 2005]An informal meeting of creditors has been called for April 14, 2005 in Los Angeles, California. Please see below for the notice to creditors dated March 17, 2005. If you are a Tradex investor and have not received this, or any mail correspondence from the Liquidator, you may update your contact information by contacting us at firstname.lastname@example.org, or by phone at +1 (902) 491 7416.
[Feb 8, 2005]Please see below for an Investor Update , dated February 8, 2005.
[Jan 27, 2005]The Liquidator continues with proceedings aimed at having the Dominican Winding Up order formally recognized in jurisdictions outside of Dominica. This will enable the Liquidator to gain access to records and account information and formally examine various individuals who have knowledge of the affairs of the Company who reside in those jurisdictions.
A systematic review of records continues with the analysis of information obtained by the Liquidator to date from several sources. These records, while not complete, will potentially focus his review toward an explanation of what happened to investor funds from the point they were received into Tradex until the time when Tradex operations were halted.
The Liquidator's efforts continue to be hindered by parties who appear to be misguided in their efforts. These actions pose an undue, and significant, cost to the liquidation in terms of time and financial resources and by delaying more fruitful activities.
The Liquidator is advised that an independent lawsuit has been made or joined by a US law firm, representing investors of Tradex as a class (i.e. a class action suit). This suit has been brought in Los Angeles, against, among others, New York Life, Art Ferdig and Susan Lok. At this point, the suit is independent of, and does not conflict with, the Dominican liquidation.
Proofs of Debt continue to be received, although admission/rejection of these claims in whole or in part is being deferred until there is sufficient information available from the records to refute or substantiate them.
[Dec 20, 2004]The Liquidator has now completed compiling investor information from the records recovered from Montreal, Canada. In many cases these files contain the account opening documents and therefore updated address and contact information may be required. All investors who have not completed a Proof of Debt form (see below) are encouraged to do so. This will lodge your claim in the estate and serve to update your contact information.
Please see below for a more comprehensive Notice to Creditors dated December 20, 2004 which comments on a recent package of documents that has been circulated to a subset of investors and answers some questions concerning the liquidation process.
[Nov 23, 2004]The Proof of Debt process continues and forms are received daily in the Liquidator's office. Confirmation of receipt of Proofs of Debt are being issued on a weekly basis. As is described in the confirmation letter, the Liquidator is not yet in a position to adjudicate Proofs of Debt.
Once sufficient information has been compiled and a decision has been made on each claim, creditors will be notified. At that point, claims will be either accepted, rejected, or subject to additional supporting information.
Based on the information available to the Liquidator to date, there will likely be a significant shortfall to creditors. The estimated time until any dividend will be considered is at least one year from now, and perhaps longer, depending on the outcome of the Liquidator's inquiries and level of cooperation provided by the Principals of the Company.
Please see below for the First Report of the Liquidator, which was filed with the High Court of Justice of the Commonwealth of Dominica.
[Oct 22, 2004]Proofs of debt are now being received by the Liquidator. Please download a copy of the form below. If you encounter difficulties downloading the file, please contact James Pomeroy or Edna Chenier at the number provided on this Web site to arrange for alternate delivery.
Please print and complete the form IN FULL and send to the Liquidator as instructed on the form.
[Oct 18, 2004]Please see below for recent correspondence with the Office of the Superintendent of Bankruptcy (Canada).
Please see below for a General Bulletin regarding the liquidation process, dated October 12, 2004. A further status update will follow shortly.
Please see below for a Notice to Creditors, dated July 13, 2004.
[May 7, 2004]On April 29, 2004, the Superior Court of Quebec, Commercial Division, granted an order to recognize the Liquidator's appointment and Winding Up Order dated April 7, 2004. The effect of this order is that the Liquidator is free to carry out his mandate in Canada with equal power and authority as granted by the High Court of the Commonwealth of Dominica. This includes the power to, among other things; take possession of all assets, books and records in whatever form they may exist. The Quebec Order effectively gives the Liquidator the power to instruct or act on behalf of the Company, including the authority to terminate any contracts or relationships which may have been in effect prior to the Quebec Order. A copy of the Quebec Order is available below.
[Apr 22, 2004]On April 7, 2004, Marcus A. Wide, a partner with PricewaterhouseCoopers ("PwC"), was appointed by an order of the High Court of Justice of the Commonwealth of Dominica, pursuant to the Companies Act, No. 21 of 1994 (the "Order"), as Liquidator of Tradex Ltd. ("Tradex" or the "Company"). A copy of the order is available in PDF format below.
This Web site will be updated as information becomes available.
|Investor Update, dated February 8, 2005|
Liquidator's Reports to the Court
|First Report of the Liquidator, dated October 27, 2004|
|Proof of Debt Status Update, dated November 25, 2008.|
|Proofs of Debt Received, as of September 19, 2008.|
|General Form, dated April 7, 2004 - Please note that Section 5 is a mandatory section. References to "interest" include "trading" or other "gains" over and above the real dollar capital invested. This is generally the difference between your statement balance and the total funds that were wired to or otherwise deposited into your account.|
|Frequently Asked Questions|
|Notice of Intention to Declare a Dividend, dated June 30, 2008|
|List of Accounts for which Proofs of Debt have been received, date June 30, 2008|
|Notice to Creditors, dated December 20, 2004|
|General Bulletin - Liquidation Process, dated October 12, 2004|
|Notice to Creditors, dated July 13, 2004|
|Notice to Creditors, dated May 17, 2004|
|Quebec Superior Court Order, dated April 29, 2004|
|Appointment Order, dated April 7, 2004|
Creditors' and Liquidator's Correspondence:
|Letter: Liquidator's reply to Tierney to Registrar of the Superior Court of Quebec (District of Montreal), dated October 18, 2004.|
|Letter: Tierney to Registrar of the Superior Court of Quebec (District of Montreal), dated September 28, 2004 (including attachments).
Note: Annexes referred to in the Tierney letter and attachments are not posted due to the volume. Annexes are documents filed with the Courts and are available to interested parties.
|Letter: Liquidator's reply to OSB, dated October 18, 2004|
|Letter: Office of Superintendent of Bankruptcy (Canada) ("OSB"),
dated October 15, 2004
To download the PDF to your computer click and hold the 'right' mouse button on the link above and select 'save link as' or 'save target as'. To view in your browser, click the link with your 'left' mouse button.