FMA Cracks Down on These Two Companies amid Fraud Concerns in New Zealand

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.