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Thursday, November 21, 2024

NJ urges redemption after GS Partners multistate securities settlement

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Raymond Royster Deputy Director of Community Engagement | New Jersey Department of Law and Public Safety

Raymond Royster Deputy Director of Community Engagement | New Jersey Department of Law and Public Safety

Attorney General Matthew J. Platkin, alongside the Division of Consumer Affairs and its Bureau of Securities, has called on New Jersey investors to reclaim funds invested with GS Partners following a resolution to a multistate securities investigation.

The agreement requires GSB Gold Standard Corporation AG, based in Germany and claiming operations in fintech and banking, along with its owner Josip Heit and related entities, to return investor money from investment products tied to digital assets and metaverse technologies.

Platkin stated that "the creators of innovative investment products derived from evolving technologies in the securities market are not exempt from the laws that pertain to traditional securities." He emphasized New Jersey's dedication to safeguarding investors by addressing unlawful sales of new technology-related investments.

The investigation addressed alleged violations by GSB in various jurisdictions, including New Jersey. The company's offerings included crypto-related investments such as virtual land plots and a staking pool in Lydian World, crypto token staking rewards exchangeable for gold, and vouchers for tokenized skyscraper shares. The inquiry also highlighted gamified certificates incentivizing further investments for passive income features.

Cari Fais, Director of the Division of Consumer Affairs, warned about scammers exploiting excitement over cutting-edge investments: “Through agreements like this one, we’re raising public awareness of the risks associated with investment opportunities that use the latest technology and promises of high returns to entice investors.”

Under the agreement with the Bureau, GSB is required to stop offering or renewing securities in New Jersey without registration or exemption compliance. They must also refund all funds invested by New Jersey residents.

Bureau Chief Elizabeth M. Harris encouraged affected individuals: “Anyone who purchased products or services from the GSB is strongly encouraged to take advantage of this opportunity to reclaim their investment funds.”

New Jersey residents can recover their investments' value minus any withdrawals. The settlement covers all GSB-sold products if purchases or transactions can be verified.

Claims will be processed starting early November by AlixPartners LLP without deductions for processing costs. Details are available on AlixPartners' website.

GSB must inform investors about asset withdrawal procedures as part of settlement fulfillment. Upon completion, they will enter into a consent order ceasing unregistered security sales in violation of state laws.

Deputy Bureau Chief Amy Kopleton led the investigation alongside Supervising Investigator Jude Tanella and Investigators Tom Andreopoulos and Richard Pearsall within the Division's Enforcement Unit.

The Bureau advises investors always to verify before investing through its resources available online or via phone at 1-866-I-INVEST (1-866-446-8378).

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