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.
