The Financial Markets Authority is cracking down on the Longhorn fund, which is forecasting a 50 percent return
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Mar 28, 2022 2:02 am
Plans for The One in Longhorn near Flat Bush. photo / delivered
Financial Markets Authority Te Mana Tātai Hokohoko has issued a temporary freeze on a venture aimed at raising $20 million for a housing project in Flat Bush, forecasting a record 50 percent return.
The lawsuit is against The One Management GP and James Law Realty for The One in Longhorn Partnership Fund, the Herald reported last week.
This program was open to large investors, including eligible investors and advertised record yields of 50 percent.
A stop order is a regulatory tool that allows the agency to prohibit or prevent advertising or disclosure that is false, misleading, or that may confuse consumers or investors about matters affecting their investment decisions.
The authority can issue an interim order, which usually takes 15 working days while they consider whether an enforcement order is warranted.
It said today it was concerned by statements made by The One Management GP regarding the fund’s returns payable to investors and the risk level of the investment.
The injunction prohibits The One Management GP from:
• Carrying out any offering, issue, sale or other purchase or sale of Shares in the Fund;
• Receiving applications for Shares in the Fund;
• Circulation of any restricted communications related to the offering of Shares in the Fund (ie removal of relevant internet advertising/websites, social media posts, sponsored advertising content and billboards);
On the subject of matching items
• Accepting further contributions, investments or deposits in respect of Shares in the Fund.
In addition, James Law Realty, which is also involved in promoting the Fund, is prohibited from issuing restricted communications relating to the offering of Shares in the Fund.
The temporary stop order was issued pursuant to Section 465 of the Financial Markets Conduct Act 2013.
James Law told the Herald today in response to the action: “We need to stop distributing materials. It’s a good thing for the FMA to assess.”
When asked how much of the $20 million originally proposed for the townhouse project was raised, Law said he could not disclose. But he would seek advice if he could.
“Yes, it’s a surprise. I didn’t think I would get the stop order from the FMA,” Law told the Herald.
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