Permanent stop order made against financial adviser

A permanent stop order against David Elgar McEwen and entities associated with him has been made by the FMA

Monday, December 11th 2023, 9:32AM

This replaces the interim stop order issued to McEwen and Associates last month and will remain in force until the FMA varies, suspends, or revokes the order. 

The FMA says it is satisfied 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 and did not comply with the Financial Markets Conduct Act with respect to unsubstantiated claims made as to the value of the financial products offered.

McEwan is prohibited from making offers, issues, sales or other disposals financial products, distributing any restricted communication that relates to an offer of McEwen and Associates’ financial products and accepting further contributions, investments, or deposits in respect of McEwen and Associates’ Financial Products.

During its investigations, the FMA says it found shareholder agreements made inaccurate statements about the company’s holding of shares on behalf of investors at that time, while 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.

The FMA says 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.

FMA executive director of response and enforcement Paul Gregory says the stop order is necessary to prevent any unlawful behaviour that may cause material financial harm to McEwen’s clients.

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.

“As The FMA has an ongoing investigation into McEwen and entities associated with him, we are unable to comment further.”

Tags: FMA