AMF warns of fraudulent crowdfunding site

The French regulator Autorité des Marchés Financiers (AMF) has warned of the activities of the website which encourages savers to invest in various fraudulent investment solutions and abusively uses the label “Plate-forme de financement participatif régulée par les autorités françaises” without the required authorization.

The website is abusively using the label “Plate-forme de financement participatif régulée par les autorités françaises” (crowdfunding platform regulated by the French authorities). The use of this collective mark is reserved for legal entities meeting various regulatory requirements.

This platform does not have a legal status as a CIA or ISP authorizing it to offer investors in France subscriptions to financial securities.

Moreover, offers individuals the opportunity to invest in precious metals and precious stones, highlighting the prospect of a financial return. As such, the site falls under the intermediation in miscellaneous property system whose legislation was recently amended by the Sapin II law. From now on, an intermediary in miscellaneous property can only market its offer on the condition that this offer has a registration number issued by the AMF.

Despite the fact that the AMF has alerted the company to the new obligations imposed on it, the latter, operating via the platform, continues to propose its offers without a registration number, and therefore illegally. The AMF recalls that a blacklist of intermediaries in miscellaneous property that do not comply with the regulations in force can be found on its website. The list of offers registered with the AMF can be also consulted on the AMF website.

Lastly, the AMF reminded investors to follow these safety guidelines before making any investment:

  • no advertising materials should make you overlook the fact that high returns always involve high risk;
  • learn as much as you can about the company or intermediary trying to sell you a product (authorization/certification, company history, location of head offices, etc.);
  • only invest in a product you understand;
  • ask yourself how, and by whom, the purchase price or selling price of the advertised product is set, and find out the precise terms and timeline for selling the product, especially in cases where the product invests in an asset class with low liquidity.

Read Also: