The California Department of Financial Protection and Innovation has issued a securities fraud cease and desist order against NovaTech FX (DFPI).
The letter is the first regulatory action taken by a US authority against NovaTech FX.
The cease and desist order issued by DFPI on November 22nd pertains to:
NovaTech LTD (St. Vincent and Grenadines shell business); NovaTech Advisors LLC (Florida company); NovaPay LLC (Florida company); NovaTrading OU (Estonian shell company); Cynthia Petion (US-based NovaTech FX co-founder and CEO); and Eddy Petion (US-based NovaTech FX co-founder and CEO) (US-based NovaTech FX co-founder)
Following an internal inquiry, DFPI determined that NovaTech FX is engaging in securities fraud.
The Packages given by NovaTech, Cynthia Petion, and Eddy Petion were neither qualified nor excluded from the CSL qualifying criterion.
The Department has not given NovaTech, Cynthia Petion, or Eddy Petion with a permit or other form of qualification to sell these securities in California.
NovaTech, Cynthia Petion, and Eddy Petion made or caused to be made misleading statements of material fact and substantial omissions to investors and potential investors in connection with the offer or sale of these securities, including but not limited to the following:
a. fraudulently claiming to be a registered hedge fund in the United States;
b. claiming falsely that NovaTech is a certified investment advisor;
c. misrepresenting NovaTech as a registered broker;
d. neglecting to disclose that the offer or sale of NovaTech’s securities in California was not qualified;
a. neglecting to give qualifications to back up claims that investors’ funds are managed and traded by skilled traders;
f. neglecting to disclose that Cynthia Petion and Eddy Petion filed for Chapter 7 bankruptcy in the US Bankruptcy Court for the Eastern District of New York in March 2011;
g. failing to disclose that in August 2019, a debt buyer filed a breach of contract and unjust enrichment lawsuit against Cynthia Petion in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, Civil Division, alleging that Cynthia Petion had failed and/or refused to repay a loan;
h. failing to disclose that in July 2018, a mortgage lender filed a foreclosure action against Eddy Petion and Cynthia Petion in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, Civil Division, to foreclose on a defaulted mortgage on residential real property owned by Eddy Petion and Cynthia Petion;
i. neglecting to disclose that in April 2018, Cynthia Petion was sued for account stated and unjust enrichment in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, Civil Division.
Cynthia Petion was found guilty and sentenced to $11,776.55 in damages.
j. neglecting to disclose that in October 2017, a credit card company sued Eddy Petion in Palm Beach County, Florida, for the account indicated. A $4,740.56 judgment has been entered against Eddy Petion.
DFPI investigates and confirms that neither the NovaTech FX entities nor the Petions are registered to provide securities in California.
Nova Tech Ltd. a/k/a NovaTech, Ltd., NovaTech Advisors, LLC, NovaPay, LLC, NovaTrading OÜ, Cynthia Petion, and Eddy Petion are hereby ordered to cease and desist from further offering or sale of securities in California, including but not limited to investment contracts known as Packages, unless and until the qualification requirements of the CSL have been met.
According to Corporations Code section 25403, anybody who controls or causes another person to violate a provision of the Corporate Securities Law of 1968, or who offers considerable assistance to another person who violates the Corporate Securities Law of 1968, is accountable for the offenses.
NovaTech FX’s business concept is classified as a High Yield Investment Program by DFPI (HYIP).
NovaTech was recruiting investors into a High Yield Investment Program (HYIP).
HYIPs are unregistered investments that are often managed by unlicensed persons and are frequently fraudulent. The promise of high returns on an annual (or even monthly, weekly, or daily) basis with little or no risk to the investor is the hallmark of an HYIP scam.
HYIPs are MLM jargon for “Ponzi scheme.” In 2019, BehindMLM investigated NovaTech FX and concluded it was a Ponzi scam.
The DFPI’s cease and desist order very certainly reveals that NovaTech FX is under federal investigation.
Securities in the United States are regulated by the Securities and Exchange Commission (SEC), with which NovaTech FX is not registered.
In October 2022, SimilarWeb recorded over 2.5 million visits to NovaTech FX’s website. The United States accounts for 66% of NovaTech FX’s website traffic.
Cynthia Petion confirmed last month that NovaTech FX had been audited and approved by the FBI.
It will be interesting to see if the DOJ files parallel wire fraud and money laundering charges when the inevitable NovaTech FX SEC fraud lawsuit is filed.
NovaTech FX has received securities fraud notices from Russia and British Columbia, Canada, in addition to California.