HK Court orders Maxim Capital, Maxim Trader to pay investors
The Hong Kong Court of First Instance has ordered Maxim Capital Limited and Maxim Trader to pay investors in connection with investment schemes they operated following legal proceedings brought by the Securities and Futures Commission (SFC) under section 213 of the Securities and Futures Ordinance (SFO).
The SFC’s investigation found that Maxim Capital and Maxim Trader had solicited over 260 investors to invest more than $170 million in investment schemes since 2013 that claimed to pay monthly returns from 3% to 8%. Investors were initially able to receive monthly returns on their investments, but they had not received further monthly returns since July 2015 and were informed by Maxim Capital/Maxim Trader that their investments had been converted into shares of a company which appear to the SFC to be worthless.
In November 2015, the SFC obtained interim injunction orders to freeze monies totalling approximately $23.5 million held by Maxim Capital with a licensed money service operator in Hong Kong. The Court has appointed administrators to receive, administer and distribute the frozen monies to the affected investors on a pro rata basis.
The Court also ordered Maxim Capital and Maxim Trader not to hold themselves out as carrying on a business in regulated activities whilst unlicensed and to suspend their websites, pursuant to sections 213(2)(a), 213(2)(f) and 213(2)(g) of the SFO
In November and December 2015, the SFC obtained interim orders in similar terms against Maxim Capital and Maxim Trader. The Court then found that Maxim Capital and Maxim Trader, whilst unlicensed, held themselves out as carrying on a business in regulated activities, in contravention of section 114(1)(b) of the SFO, and contravened section 109(1) of the SFO by knowingly issued advertisement in which they held themselves out as being prepared to carry on regulated activities.