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FMA Cracks Down on These Two Companies amid Fraud Concerns in New Zealand
TheFinancial Markets Authority (FMA) of New Zealand has been actively combatingfraudulent activity and scams in the country's financial markets. In a seriesof recent actions, the regulator has taken steps to protect consumers andmaintain market integrity by cancelling one crowdfunding services license andissuing a warning against a cryptocurrency company.
FMA Cracks Down onFraudulent Activity and Scams
Accordingto the update on Wednesday, the FMA cancelled the crowdfunding services license ofEquitise Pty Ltd, an equity crowdfunding service provider licensed since 2014.The cancellation followed Equitise's significant breach of certain marketservices licensee obligations and its failure to meet statutory requirements.
The companyfailed to provide its financial reporting and agreed upon procedures reporting,and was deregistered from the Financial Service Providers Register (FSPR) forfailing to file its annual confirmation within the required timeframe.
"Cancellinga provider's licence is one of the strongest regulatory actions we can take andis not a decision the FMA takes lightly, Peter Taylor, the FMA Director ofSpecialist Supervision and Response, stated, emphasizing the severity ofthe action. Financial service providers must make sure they are able to meetthe legislative requirements and act lawfully. The rules are there to protectconsumers and to ensure market integrity."
In anotherwarning, the FMA cautioned investors about AxonExchange, a suspectedcryptocurrency exchange scam. The platform claims to be based in New Zealandbut is not an incorporated company in the country and is not authorized orregistered on the FSPR to provide financial services.
The FMA isconcerned that AxonExchange is operating a scam, prompted by an investor's complaint of difficulty withdrawing funds from the platform.
Rising Number of Impostorsin New Zealand
Theregulatory authority in New Zealand has raised concerns about an increase inimpostor-related scams, particularly highlighting the rise in fake productdisclosure statement frauds. In 2023, there were 82 warnings issued regardingsuspected investment scams and impostor websites, as well as 22 warningsconcerning unregistered businesses. This marks a significant uptick in effortsto alert the public about these deceptive practices.
Additionally,the FMA has reported an emerging trend where scammers impersonate anotherregulatory body, specifically the UKs Financial Conduct Authority. Thesescammers send emails to New Zealand residents claiming they can assist inrecovering funds lost in previous scams.
Accordingto a report published by the FMA at the end of last year, while the totalnumber of crime warnings decreased to 89 in 2023 from 111 the previous year,there was a noteworthy increase in the number of impostors and imposterwebsites. The report noted 29 such cases in 2023, a significant rise fromprevious years when similar cases were isolated and not statistically relevant.
This article was written by Damian Chmiel at www.financemagnates.com.
