The Financial Markets Authority (FMA) has issued a stop order against Syndicated Trusts Ltd, ordering the company to stop advertising or accepting money for financial products.
The FMA warned New Zealanders to be wary of dealing with the company.
The authority’s general counsel, Nick Kynoch, said it could use a stop order – a statutory power – to stop particular behaviour or force a market participant to take steps to prevent further harm. It can be applied without the need to go to court.
The FMA said it sought clarification on several occasions from Syndicated Trust directors John Lehmann (who resigned on 16 July) & Xinghua Fan about various newspaper advertisements relating to an offer, or planned offer, of financial products.
The stop order prohibits Syndicated Trusts from distributing communications & advertisements about itself or the offer of financial products, accepting applications or money for financial products.
Mr Kynoch said the authority issued the stop order because Syndicated Trusts contravened several aspects of the Financial Markets Conduct Act. The advertisements either failed to make it clear that the company was only seeking preliminary interest for the offer or it failed to prepare & lodge a product disclosure statement with the Registrar of Companies before making the advertisements.
The FMA also considered that Syndicated Trusts’ advertisements were likely to confuse or mislead people and might have been making unsubstantiated statements, including that the company was a co-operative when it was not, and that investors would receive a return of “6.5% to 10.5% + dividend”.
Mr Kynoch said: “Stop orders are used by the FMA when a business consistently fails to comply with the law, or respond to our concerns. It is an offence to fail to comply with a stop order and we are warning the public to exercise extreme caution when dealing with Syndicated Trusts.”
John Lehmann presented his resignation as director on 16 July, giving his address for that & other notifications as 6 Downsview Rd, Pakuranga Heights.
That was the address for many years of John Russell, the bane of the Inland Revenue Department from the time Securitibank, of which he was managing director, collapsed in 1966 until his death in May last year, aged 83.
The ultimate holding company of both Syndicated Investments Ltd & Syndicated Investments NZ Ltd is LFT Holdings Ltd (director Ross Lehmann).
Xinghua Fan is now sole director of both Syndicated Investments companies.
ACT Party legal advisor Styan Barron was a director of Syndicated Investments Ltd from 26 March last year until 25 January, and of Syndicated Investments NZ Ltd from its incorporation on 7 December last year until 1 April.
Attribution: FMA release, Companies Register.