New Zealand’s Financial Markets Authority (FMA) has made a permanent stop order against David Elgar McEwen and entities associated with him (McEwen and Associates).

The entities associated with 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, Agtech 3 Limited, Startight Holdings Limited, Innovative Capital Limited, and McEwen’s Limited Partnership.

The stop order prohibits McEwen and Associates from:

• Making offers, issues, sales or other disposals of McEwen and Associates’ financial products,
• Distributing any restricted communication that relates to an offer of McEwen and Associates’ financial products,
• Accepting further contributions, investments, or deposits in respect of McEwen and Associates’ Financial Products.

The FMA found 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.

Shareholder agreements made inaccurate statements about the company’s holding of shares on behalf of investors at that time.

Sale and Purchase Agreements (S&PAs) relating to offers of financial products included a representation that the investor would be entitled to receive a return on investment that would be paid out in the form of additional equity where it was unclear and confusing as to how this would be enforceable since the equity issuer is not a party to the S&PA.

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.

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 force until such time the FMA varies, suspends, or revokes the order.