FMA Stops Firm Promising 350% Returns on FX and Crypto in 60 Weeks

<p>The
Financial Markets Authority (<a href="https://www.financemagnates.com/tag/fma/" target="_blank" rel="follow">FMA</a>), the New Zealand financial market regulator,
has issued <a href="https://www.fma.govt.nz/assets/Enforcement/Orders/Validus-Stop-Order.pdf" target="_blank" rel="nofollow">a permanent order</a> to cease further operations of Validus and all
associated companies and individuals. The decision was first made in February
2023 and upheld after the High Court rejected an appeal made by the company's
representatives.</p><p>According
to the FMA, Validus has offered clients extremely high return rates on
investments and loyalty rewards, reaching 350% over 60 weeks. The company
allegedly made investments in the <a href="https://www.financemagnates.com/terms/f/forex/">forex</a> (FX), crypto, and stock markets.</p><p>FMA Blocks Validus
Financial Products</p><p>The FMA
blocked Validus from further offering financial products, distributing related
materials, and accepting applications and funds from potential clients. The
entire case began in November 2022 with a seminar during which Validus promoted
its 'educational packages' named Validus Pool.</p><p>After
issuing a preliminary order to cease operations, Validus sent a letter to the
FMA stating that the offer of Validus Pool Products had been suspended. The
company admitted that private individuals should not invest in the offered
instruments, as a guaranteed profit is not achievable.</p><p>The FMA
used this position as confirmation that the information presented to seminar
participants was false and could mislead them.</p><p>"Seminar
attendees were induced to purchase, purchased or intend to purchase, educational
packages in reliance on false or misleading representations. They will not
receive the promoted 2-3% return on their money, or be able to withdraw that
money. They are likely to suffer material financial harm," Paul Gregory,
the Executive Director of Response and Enforcement at FMA, said.</p><p>During the
November event, Suai Tito, a key speaker, claimed that individuals who
purchased educational packages could expect a 2-3% return per week and even
350% after 60 weeks. He assured that the funds were invested by a team of
experts in the gaming market, cryptocurrencies, Forex, stocks, etc.</p><p>"Validus
has made false or misleading representations to the public that had every
appearance of an unregulated offer of financial products. The FMA considers a
stop order is the most appropriate and effective response in the
circumstances," Gregory added.</p><p>As
mentioned at the beginning, Validus has responded to the decision made earlier
in the year. The appeal to the High Court took place in June, but the court
issued an official decision this week and decided to reject the appeal.</p><p>Number of Investment Scams
Increases in New Zealand</p><p>Six months
ago, the FMA reported that the number of crimes and investment frauds had
increased last year <a href="https://www.financemagnates.com/forex/new-zealands-fma-reports-17-spike-in-investment-scams-in-2022/" target="_blank" rel="follow">by 17%</a>. The regulator identified 111 cases during this
period in all categories, representing a 17% increase compared to 95 cases in
2021.</p><p>The FMA stated
that fraud cases included 105 suspected dishonest programs, 48 unregistered
companies, and one fake regulator (posing as the FMA). In 2021, these figures
were, respectively 89, 24, and two cases.</p><p>The New
Zealand regulator actively operates in the market, identifying suspicious
investment entities. <a href="https://www.financemagnates.com/" target="_blank" rel="follow">Finance Magnates</a>reported Yesterday (Tuesday) that
<a href="https://www.financemagnates.com/forex/news-nuggets-4-july-xscom-appoints-mena-director-fma-issues-new-warnings/" target="_blank" rel="follow">FMA issued a warning</a> about Stake Funds and Capital Gold Investment activities.
Stake Funds is an investment company that operates without proper registration.
Capital Gold Investment is another company that came under scrutiny due to
false claims of being a registered New Zealand company.</p><p>At the end
of June, the regulator closed one of the more high-profile cases in recent
years concerning alleged violations of the Anti-<a href="https://www.financemagnates.com/terms/m/money-laundering/">Money Laundering</a> and Countering
Financing of Terrorism (AML/CFT) Act by <a href="https://www.financemagnates.com/forex/new-zealands-fma-orders-tiger-brokers-to-pay-900k-for-amlcft-breaches/" target="_blank" rel="follow">Tiger Brokers</a>. In connection with
violations from three-four years ago, the broker had to pay a $900,000 fine.</p>

This article was written by Damian Chmiel at www.financemagnates.com.