Financial watchdog orders David McEwen to permanently stop selling financial products

The financial watchdog has made a permanent stop order against David McEwen and entities associated with him.

New Zealand’s financial watchdog has made a permanent stop order against financial adviser David McEwen and entities associated with him.

It comes after the Financial Markets Authority (FMA) first issued an interim stop order in November over concerns of a risk of investor harm.

The FMA has an ongoing investigation into McEwen and entities associated with him, but today said it was satisfied that restricted 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;
• Did not comply with the Financial Markets Conduct Act 2013 with respect to unsubstantiated claims made as to the value of the McEwen and Associates financial products offered.

The stop order prevents McEwen and Associates from making offers of financial products, distributing any restricted communication that relates to an offer, and from accepting any further deposits or investments.

During its investigation, the FMA said it discovered that shareholder agreements made inaccurate statements about the company’s holding of shares on behalf of investors at that time.

It found 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.

It also found Sale and Purchase Agreements (S&PAs) relating to offers of financial products included a representation that could confuse investors.

FMA executive director of response and enforcement Paul Gregory said: “We believe the stop order is necessary to prevent any unlawful behaviour that may cause material financial harm to Mr McEwen’s clients.”

The entities associated with 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.

McEwen describes himself on LinkedIn as having more than 30 years’ experience watching the markets and now specialises in “timely commentary on shares that I classify through nine key assessment criteria”.

McEwen was the business editor of the National Business Review between 1992 and 1996 and is director of McEwen & Associates, which publishes the fortnightly McEwen Investment Report.

The stop order will remain in place until the FMA varies, suspends or revokes it.