The permanent ban on Validus by the FMA comes after an interim ban in February. Photo: 123RF
The Financial Markets Authority (FMA) has issued a permanent ban on multi-level marketing firm Validus, after the High Court dismissed the company's appeal.
The permanent stop order prohibited US-registered Validus and associated people from repeating "unlawful behaviour that may cause financial harm", the FMA said.
Validus was banned from carrying out a number of activities, including making offers of its financial products, and accepting further applications, contributions, investments or deposits.
The permanent ban was first issued in May, but Validus requested it not be published while the court considered its appeal.
The FMA agreed not to publish the order, and the appeal was heard at the High Court in Auckland last month.
The appeal was dismissed by Justice Pheroze Jagose.
FMA executive director of response and enforcement Paul Gregory said the permanent stop order was a response to Validus holding seminars following an earlier interim ban in February.
"We'll be watching Validus activity in New Zealand and we'll take action where we believe it's necessary to protect the public and enforce the order," Gregory said.
"The order is about offering Validus financial products. It is enforceable, which is why it was appealed and we're also continuing to cooperate with the Commerce Commission on matters relating to Validus."
Failing to comply with the stop order could result in a maximum fine of $300,000.
The FMA said people that attended seminars by Validus were told to buy educational packages that contained false or misleading information.
"Seminar attendees were induced to purchase, purchased or intend to purchase, educational packages in reliance on false or misleading representations. They will not receive the promoted 2-3 percent return on their money, or be able to withdraw that money," Gregory said.
"Validus has made false or misleading representations to the public that had every appearance of an unregulated offer of financial products."
Gregory said the stop order was the most appropriate and effective response.
"We urge the public, and the communities that Validus has been targeting, to stay away from this company and these offers."