Pegasus Markets Found Guilty of Charges Brought by New Zealand’s FMA

Pegasus Markets Ltd, a stockbroking company, and its New Zealand-based director, Michael Reps have been found guilty of all criminal charges brought by the country’s financial regulator the Financial Markets Authority (FMA).

In a statement published by the regulator today, the FMA outlined that Pegasus Markets and Reps were found guilty for breaches to the Financial Service Providers (Registration and Dispute Resolution) Act (FSP Act).

The New Zealand regulator charged Pegasus Markets and Reps after the company claimed on two different websites that it was registered on the Financial Service Providers Register (FSPR). These claims were made despite the fact that it was deregistered.

FMA: Pegasus Markets Ignored Warnings

According to the FMA, the stockbroking company was then warned by Companies Office about the misleading statements. However, the company did not remove them.

Judge Jelas of the North Shore District Court found that the company was guilty of two charges of breaching section 12 of the FSP Act. This section states that no one can state they are registered on the FSPR unless they actually are.

Reps, on the other hand, was found guilty of breaching section 40 of the Act, for knowingly failing to prevent the company from committing an offence under the law.

Whilst registration on the FSPR does not necessarily mean that a company is regulated by the FMA, companies do use the registration as a way to prove legitimacy. This is a tactic often used by scammers to solicit clients in New Zealand and abroad.

“Each charge for breaching section 12 of the FSP Act carries a maximum fine of $300,000 for a company and a maximum penalty of either a $100,000 fine and/or 12 months’ imprisonment for an individual,” the FMA said in its statement.

Whilst Pegasus Markets and Reps have both been found guilty, they will not be sentenced until 6th November 2020. The Kiwi watchdog outlined that it would comment further on the case after sentencing.