The New Zealand Financial Markets Authority (FMA) has issued a permanent cease and desist order against David Elgar McEwen and entities associated with him (McEwen and Associates).
Entities related to Mr McEwen are Stockfox Limited, Cosmopolitan Holdings Limited, Strategy Services Limited, Fund Administration Services Limited, Digitech 1 Limited, M and A Holdings 1 Limited, M and A Holdings 2 Limited, Agtech 1 Limited, Agtech 2 Limited 3 Limited, Startight Holdings Limited, Innovative Capital Limited and McEwen’s Limited Partnership.
The cease and desist order prohibits McEwen and Associates from:
- By offering, issuing, selling or otherwise assigning financial products of McEwen and Partners;
- Distribution of any restricted communication relating to McEwen and Associates financial product offering;
- Accepting further contributions, investments or deposits in relation to McEwen and Partners Financial Products.
The FMA found that the limited communications made by McEwen and Associates regarding financial product offers:
- Were false or misleading, or likely to mislead or confuse;
- Contained a material misrepresentation or material error;
- Failed to comply with the Financial Markets Conduct Act 2013 in relation to unsubstantiated claims made about the value of financial products offered by McEwen and Associates.
The shareholder agreements made inaccurate statements about the holding of company shares on behalf of investors at the time.
Sale and Purchase Agreements (S&PAs) relating to financial product offerings included a statement that the investor would be entitled to receive a return on investment payable in the form of additional equity capital where it was unclear and confusing as to how it would be enforceable given that the equity issuer not a party to S&PA.
Limited communications were also sent to current and prospective investors that made unsupported statements as to the value of the shares and/or assets held by the relevant companies.
The stop order revokes and replaces the interim stop order issued to McEwen and Associates in November 2023. The permanent stop order will remain in effect until the FMA varies, suspends or revokes the order.