FRANKFORT, Ky. — Abroad firm GS Companions World and board chairman Josip Heit had been ordered to stop and desist through an administrative grievance filed by the Division of Monetary Establishments (DFI) on November 16, 2023. The events allegedly marketed an unregistered multilevel advertising and marketing (MLM) funding program to Kentucky traders, inflicting an elevated threat of economic hurt.
The grievance states:
- GS Companions carried out an funding program that promotes unregistered digital asset certificates on the blockchain referred to as MetaCertificates.
- MetaCertificates qualify as securities pursuant to Kentucky statute (see KRS 292.310(19)), most intently resembling certificates of deposit or funding contracts.
- GS Companions guarantees MLM-stylized commissions for recruiting new traders and promoting investments. This system purportedly pays 18 p.c direct commissions on all product gross sales and as much as 24 p.c on direct packages. Further commissions can be found for members who meet recruitment circumstances.
- Potential Kentucky traders had been predominately reached through web sites, cellphone purposes, and social media.
- The respondents acted as unregistered issuer brokers of unregistered securities.
- The respondents have by no means been registered as an issuer or funding adviser in Kentucky, nor are they exempt from registration.
“It’s illegal for any particular person to solicit or promote securities in Kentucky with out first being registered with our division to take action,” stated Chad Harlan, securities division assistant director. “In our investigation, we discovered MetaCertificates to qualify as securities. By working with out the correct registration, DFI alleges this exercise was illegal and put Kentuckians at elevated threat of economic hurt.”
GS Companions and Heit have been ordered to stop and desist from soliciting or promoting any unregistered safety in Kentucky, together with MetaCertificates. They’re additional ordered to stop and desist from all different exercise that violates the Securities Act of Kentucky.
This motion outcomes from a collaborative group of securities regulators in the USA and Canada. Respondents have twenty days from the service of DFI’s grievance to file a written reply to the allegations. A full copy of the executive grievance will be discovered at KFI.ky.gov by clicking “Authorized” and “Securities Enforcement Actions.”
