If
something sounds too good to be true, it usually is. According to the New
Zealand financial markets regulator, the FMA, this tried and
true market saying may apply to Equity Budget, which promises “unrealistic
returns” of up to 7% per day. Moreover, it lacks proper regulations and
isn’t listed on the national Financial Service Providers Register required to
offer any financial products.
FMA Alerts on Potential
Get-Rich-Quick Scam
According
to the official website of Equity Budget, the company has been offering its
services for 11 years and operates out of New Zealand. However, the FMA
cautions retail investors, noting that “It is also not listed on the New
Zealand Companies Office registry.”
Furthermore,
according to the warning from the New Zealand regulator, Equity Budget
“does not appear to be a registered company in any other jurisdiction or
subject to regulation” by financial oversight commissions from other
countries.
Allegedly,
Equity Budget invests in agriculture, freight and logistics, and real estate projects, offering its clients a guaranteed daily return rate
depending on the level of “investment plan” they choose.
By
investing as little as $100, a trader can expect a daily return rate of 4.1%,
while a $100,000 investment would yield a 7% daily return. If this scheme were
true, investors could amass $840,000 in their accounts after 120 days (the
maximum investment period). Sounds too good to be true, right?
Equity
Budget offers “managed investment plans with unrealistic returns but is not
registered on the Financial Service Providers Register, which is required to
offer financial products in New Zealand,” warns the FMA.
The
operation of the potential fraudulent company bears the hallmarks of a
get-rich-quick scheme, referring to strategies that promise large amounts of
money with little to no investment, effort, or risk, often in a short period of
time.
Other FMA’s Warnings
The FMA has
been actively combating financial fraud and protecting investors from various
scams. Recently, the regulatory body took decisive action by canceling the crowdfunding service’s license of Equitise Pty Ltd, a licensed equity crowdfunding service provider since 2014, due to significant breaches of market services licensee obligations and failure to meet statutory requirements. Furthermore,
the FMA warned investors about AxonExchange, a suspected
cryptocurrency exchange scam.
The rise of
impostor-related scams, particularly fake product disclosure statement frauds,
has become a growing concern for the FMA. In 2023 alone, the regulatory
authority issued 82 warnings regarding suspected investment scams and impostor
websites and 22 warnings concerning unregistered businesses.
Moreover,
the FMA has identified an emerging trend where scammers impersonate other
regulatory bodies, such as the UK’s Financial Conduct Authority, to target New
Zealand residents.
This article was written by Damian Chmiel at www.financemagnates.com.
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