FMA order: McEwen told to stop offers

New Zealand’s financial watchdog has made a permanent stop order against financial adviser David McEwen and entities associated with him.

It comes after the Financial Markets Authority ( FMA) first issued an interim stop order in November over concerns of a risk of investor harm.

The FMA has an ongoing investigation into McEwen and entities associated with him, but yesterday said it was satisfied that restricted communications made by McEwen and Associates relating to offers of financial products were:

● False or misleading, or likely to mislead or confuse.

● Contained a material misdescription or material error.

● Did not comply with the Financial Markets Conduct Act 2013 with respect to unsubstantiated claims made as to the value of the McEwen and Associates financial products offered.

The stop order prevents McEwen and Associates from making offers of financial products, distributing any restricted communication that relates to an offer, and from accepting any further deposits or investments.

During its investigation, the FMA said it discovered that shareholder agreements made inaccurate statements about the company’s holding of shares on behalf of investors at that time.

It found restricted communications were also sent to current and prospective investors that made unsubstantiated representations as to the value of shares and/ or assets held in the relevant companies.

It also found sale and purchase agreements relating to offers of financial products included a representation that could confuse investors.

The stop order will remain in place until the FMA varies, suspends or revokes it.