The Financial Markets Authority (FMA) of New Zealand said it recorded an increase in the number investment scams discovered during its recent fiscal year that ended in June2022. Across all categories, the regulator highlighted 111 cases during the period, which represents a 17% increase from 95 cases in 2021.
Giving a breakdown, FMA said the scam cases include 105suspected fraudulent schemes, 48 unregistered businesses and one fake regulator (that impersonated the FMA). In2021, the numbers came in at 89, 24 and two cases, respectively.
FMA disclosed these numbers in its 2022 Annual Report released on Tuesday. According to details in the report, the regulator’s scam warnings havebeen increasing year-over-year from 83 cases highlighted in 2020.
“Since the start of COVID-19, we have seen a spike in investment scam complaints,particularly related to social media contact scams, romance-investmenthybrid scams, and imposter websites,” FMA said in the report.
Watch the recent FMLS22 session on what will shape fintech regulation this year.
However, FMA in its 2022 Ease of Doing Business Survey reports that of the162 industry stakeholders it surveyed, 78% agreed that it maintains a strong enforcement function that discourages misconduct. In 2021 and 2020, the stakeholders’sentiment in this regard came in at 71% and 78% agreement levels, respectively.
“This result has returned to its 2020 level after a dip last year. Whileour approach to enforcement did not substantially change over the period,stakeholder perceptions for a particular year may be influenced by individual cases or outcomes. We will continue to look for opportunities topromote our enforcement activity and work to help deter misconduct,” FMAwrote in the report.
New Zealand’s FMA Enforcement Actions in Recent Months
The FMA has executed a number of enforcement actions in recent months. In late December, the regulator filed a civil lawsuit against the localsubsidiary of online brokerage firm, Tiger Brokers, for alleged breaches of its rules on anti-money laundering (AML ) and counter-terrorism financing (CTF). The regulator sought a pecuniary penalty of NZ$900,000 from thecourt with regards to the case.
In the same month, the financial markets supervisor warned against a fraudster who was parading himself asone of its clerks by cold-calling consumers to solicit personalinformation in order to scam unsuspecting investors.
Furthermore, the Kiwi regulator in December last year issued two crypto scam warnings against Bay Exchangeand Krypto Security. The financial markets watchdog noted that while BayExchange is not licensed to provide financial services to New Zealanders, Krypto Security impersonated its officials in order to extort consumers.
The Financial Markets Authority (FMA) of New Zealand said it recorded an increase in the number investment scams discovered during its recent fiscal year that ended in June2022. Across all categories, the regulator highlighted 111 cases during the period, which represents a 17% increase from 95 cases in 2021.
Giving a breakdown, FMA said the scam cases include 105suspected fraudulent schemes, 48 unregistered businesses and one fake regulator (that impersonated the FMA). In2021, the numbers came in at 89, 24 and two cases, respectively.
FMA disclosed these numbers in its 2022 Annual Report released on Tuesday. According to details in the report, the regulator’s scam warnings havebeen increasing year-over-year from 83 cases highlighted in 2020.
“Since the start of COVID-19, we have seen a spike in investment scam complaints,particularly related to social media contact scams, romance-investmenthybrid scams, and imposter websites,” FMA said in the report.
Watch the recent FMLS22 session on what will shape fintech regulation this year.
However, FMA in its 2022 Ease of Doing Business Survey reports that of the162 industry stakeholders it surveyed, 78% agreed that it maintains a strong enforcement function that discourages misconduct. In 2021 and 2020, the stakeholders’sentiment in this regard came in at 71% and 78% agreement levels, respectively.
“This result has returned to its 2020 level after a dip last year. Whileour approach to enforcement did not substantially change over the period,stakeholder perceptions for a particular year may be influenced by individual cases or outcomes. We will continue to look for opportunities topromote our enforcement activity and work to help deter misconduct,” FMAwrote in the report.
New Zealand’s FMA Enforcement Actions in Recent Months
The FMA has executed a number of enforcement actions in recent months. In late December, the regulator filed a civil lawsuit against the localsubsidiary of online brokerage firm, Tiger Brokers, for alleged breaches of its rules on anti-money laundering (AML ) and counter-terrorism financing (CTF). The regulator sought a pecuniary penalty of NZ$900,000 from thecourt with regards to the case.
In the same month, the financial markets supervisor warned against a fraudster who was parading himself asone of its clerks by cold-calling consumers to solicit personalinformation in order to scam unsuspecting investors.
Furthermore, the Kiwi regulator in December last year issued two crypto scam warnings against Bay Exchangeand Krypto Security. The financial markets watchdog noted that while BayExchange is not licensed to provide financial services to New Zealanders, Krypto Security impersonated its officials in order to extort consumers.
