The California Department of Financial Protection and Innovation has told NovaTech FX to stop committing fraud (DFPI).
The notice is the first time a US regulator has done something against NovaTech FX.
The DFPI’s notice to stop on November 22 applies to:
NovaTech LTD (a shell company in St. Vincent and the Grenadines), NovaTech Advisors LLC (a company in Florida), NovaPay LLC (a company in Florida), NovaTrading OU (a shell company in Estonia), Cynthia Petion (the US-based co-founder and CEO of NovaTech FX), and Eddy Petion were all linked to the scheme (US-based NovaTech FX co-founder)
After doing an internal investigation, DFPI came to the conclusion that NovaTech FX is lying about its securities.
The Packages that NovaTech, Cynthia Petion, and Eddy Petion sold were securities that did not meet the CSL’s requirements for qualified or exempt securities.
The Department has not given NovaTech, Cynthia Petion, or Eddy Petion a permit or any other kind of qualification that would let them sell these securities in California.
In connection with the offer or sale of these securities, NovaTech, Cynthia Petion, and Eddy Petion made or caused to be made false statements of important facts and important omissions to investors and potential investors, including, but not limited to, the following:
a. saying falsely that NovaTech is a registered hedge fund in the U.S.;
b. saying NovaTech is a registered investment adviser when it is not;
c. saying that NovaTech is a registered broker when it is not;
d. not telling anyone that NovaTech’s securities could not be sold or offered for sale in California;
e. not giving any proof to back up claims that investors’ money is being managed and traded by experienced traders;
f. not telling anyone that Cynthia and Eddy Petion filed for Chapter 7 bankruptcy in March 2011 in the US Bankruptcy Court for the Eastern District of New York;
g. not telling anyone that in August 2019, a debt buyer sued Cynthia Petion in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, Civil Division for breach of contract and unjust enrichment, saying that Cynthia Petion had failed or refused to pay back a loan;
h. failing to say that in July 2018, a mortgage lender sued 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 that Eddy Petion and Cynthia Petion owned;
i. Not telling anyone that in April 2018, a credit card company sued Cynthia Petion in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, Civil Division for account stated and unjust enrichment.
A judgment in the amount of $11,776.55 was made against Cynthia Petion; and
j. Not telling anyone that in October 2017, Eddy Petion was sued for account stated by a credit card company in the County Court in and for Palm Beach County, Florida. A $4,740.56 judgment was made against Eddy Petion.
DFPI checks to make sure that neither the NovaTech FX companies nor the Petions are registered in California to sell securities.
Corporations Code section 25532 says that Nova Tech Ltd. a/k/a NovaTech, Ltd., NovaTech Advisors, LLC, NovaPay, LLC, NovaTrading OÜ, Cynthia Petion, and Eddy Petion must stop offering or selling securities in California, including but not limited to investment contracts called “Packages,” until the CSL’s requirements have been met.
Section 25403 of the Corporations Code says that a person is responsible for breaking the law if they control or persuade someone else to do something against the Corporate Securities Law of 1968, or if they help someone else break the law in a big way.
NovaTech FX’s business plan is called a High Yield Investment Program by DFPI (HYIP).
NovaTech was trying to get people to put money into something called a “High Yield Investment Program” (HYIP).
HYIPs are investments that aren’t registered and are usually run by people who don’t have licenses. They are often scams. An HYIP scam is easy to spot because it promises high returns on an annual, monthly, weekly, or even daily basis with little or no risk to the investor.
HYIPs are MLM underbelly code for “Ponzi scheme”. In 2019, BehindMLM looked at NovaTech FX and also came to the same conclusion: it was a Ponzi scheme.
The cease and desist letter from DFPI almost proves that NovaTech FX is probably being looked into by the federal government.
The SEC is in charge of securities in the US, but NovaTech FX is not registered with them either.
In October 2022, over 2.5 million people went to NovaTech FX’s website, which was tracked by SimilarWeb. 66% of the people who visit NovaTech FX’s website are from the US.
Last month, Cynthia Petion agreed with the claim that the FBI had checked NovaTech FX and given its approval.
When the inevitable NovaTech FX SEC fraud lawsuit comes out, it will be interesting to see if the DOJ also files wire fraud and money laundering charges.
NovaTech FX has been warned about securities fraud in California, Russia, and British Columbia, Canada.