The
Financial Markets Authority (FMA) of New Zealand has been actively combating
fraudulent activity and scams in the country’s financial markets. In a series
of recent actions, the regulator has taken steps to protect consumers and
maintain market integrity by cancelling one crowdfunding services license and
issuing a warning against a cryptocurrency company.
FMA Cracks Down on
Fraudulent Activity and Scams
According
to the update on Wednesday, the FMA cancelled the crowdfunding services license of
Equitise Pty Ltd, an equity crowdfunding service provider licensed since 2014.
The cancellation followed Equitise’s significant breach of certain market
services licensee obligations and its failure to meet statutory requirements.
The company
failed to provide its financial reporting and agreed upon procedures reporting,
and was deregistered from the Financial Service Providers Register (FSPR) for
failing to file its annual confirmation within the required timeframe.
“Cancelling
a provider’s licence is one of the strongest regulatory actions we can take and
is not a decision the FMA takes lightly,” Peter Taylor, the FMA Director of
Specialist Supervision and Response, stated, emphasizing the severity of
the action. “Financial service providers must make sure they are able to meet
the legislative requirements and act lawfully. The rules are there to protect
consumers and to ensure market integrity.”
In another
warning, the FMA cautioned investors about AxonExchange, a suspected
cryptocurrency exchange scam. The platform claims to be based in New Zealand
but is not an incorporated company in the country and is not authorized or
registered on the FSPR to provide financial services.
The FMA is
concerned that AxonExchange is operating a scam, prompted by an investor’s complaint of difficulty withdrawing funds from the platform.
Rising Number of Impostors
in New Zealand
The
regulatory authority in New Zealand has raised concerns about an increase in
impostor-related scams, particularly highlighting the rise in fake product
disclosure statement frauds. In 2023, there were 82 warnings issued regarding
suspected investment scams and impostor websites, as well as 22 warnings
concerning unregistered businesses. This marks a significant uptick in efforts
to alert the public about these deceptive practices.
Additionally,
the FMA has reported an emerging trend where scammers impersonate another
regulatory body, specifically the UK’s Financial Conduct Authority. These
scammers send emails to New Zealand residents claiming they can assist in
recovering funds lost in previous scams.
According
to a report published by the FMA at the end of last year, while the total
number of crime warnings decreased to 89 in 2023 from 111 the previous year,
there was a noteworthy increase in the number of impostors and imposter
websites. The report noted 29 such cases in 2023, a significant rise from
previous years when similar cases were isolated and not statistically relevant.
This article was written by Damian Chmiel at www.financemagnates.com.