Software came with risk, says distributor

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People who bought controversial foreign exchange trading software were told the product carried some financial risk, says its local distributor.

Phoenix Forex was the local seller of the OakFX trading system, which customers paid up to $25,000 to access.

However, the system is no longer being sold in New Zealand after the Financial Markets Authority issued a warning about both Phoenix Forex and the software package.

"The 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," the FMA said in its warning last month.

Phoenix Forex said yesterday it had been in "constructive dialogue" with the FMA over a long period.

"We want to be clear that Phoenix Forex fully supports the regulation of financial markets and the FMA's role in protecting investors," it said.

However, it was standing by its position that it was "simply distributing automated software, developed offshore" and that it was not envisaged the company would need to be licensed.

The FMA said that Phoenix Forex was not registered with the authority and that any company which is in the business of dealing in futures contracts, including margin foreign exchange products, must be authorised by the regulator.

Phoenix Forex said that all clients who bought OakFX signed documents that "clearly stated the product came with a degree of financial risk" and that past returns were not indicative of future returns.

"Although Phoenix is under no legal obligations to assist clients who have not enjoyed the returns they were anticipating, we have been working with a small number." Phoenix felt it and OakFX's developer had "acted honourably and generously" in helping customers.