In the financial sector various activities require a permit and conduct of business in order to avoid any disadvantages for clients and/or business partners and to ensure that transparency is maintained.
Once the financial authorities like BaFin (Federal Financial Supervisory Authority) / FMA (Financial Market Authority) / FINMA (Financial Market Supervision) are informed of any irregularities and/or lack of transparency resulting from unauthorized activities performed – consciously or unconsciously by providers they take appropriate action for clarification. In case the suspicion is confirmed the authorities can proceed with so-called enforcement action against unauthorized providers which can even lead to a liquidation of the company.
BaFin/FMA/FINMA maintain and publish alert lists. Companies who are featured on said list were investigated with regard to illegal activities but since they did not fulfill their disclosure obligation towards the authorities these suspicions could not be confirmed.
An entry on the warning list does not necessarily mean that the activities practiced by the listed companies are illegal but is rather pointing out that the companies were not granted authorization. Once the authorities could establish clarification and required adjustments the affected companies are removed from the list.
Particular caution should be applied with regard to providers who have already been issued a ruling or have severely violated the regulatory provisions, e.g.
Publications pursuant to the Financial Markets Supervision Act, Article 34
Federal Financial Supervisory Authority – Unlawful Acts
Financial Market Authority Warnings regarding Investions/investors
Financial Market Authority Alert List
The following companies stand due to their conduct under our observation:
An intelligently set up network marketing which is using a now common cash back system by preying on gullible customers and selling them various merchandising units and/or respectively selling overpriced cash register systems to retailers.
Many so-called Lyoness business partners are not even aware of their name being listed on Lyoness’ website or others have terminated cooperating with Lyoness due to economic inefficiency and are now stuck with said cash register systems.
Lyoness allegedly has a EUR 1.3 billion annual turnover without disclosing the details these numbers are based on.
How such revenue can be generated solely from the cash back system does not require the Nobel Prize in mathematics.
When considering the numbers of supposedly 4.7 million members worldwide and with slightly more than 50,000 points of acceptance in mind this is nothing especially since most dealers are small retailers.
LOPOCA (stands for LOttery, POker, CAsino) – competitors are for instance bwin, tipico
* Founded in May 2010 by three partners, represented by Marketing Director Reinhard Meusburger (he is Styrian and claims his income to be EUR 3,000 per hour!!)
* 30 employees , 80,000 signed in users (so-called “Lopocaners”)
* Based in Cyprus, licensed in Malta (Supervision Authority) – > in conflict with the EU gambling law since there is no compliance with the Austrian Game Law – >> Chamber of Labor in Graz states that LOPOCA is illegal since they do not have a license in Austria
* Online Gambling and Partner Program
* Nuggets Game = Trade with Nuggets (Nuggets share price develops through the interaction between Lopoca and the gambler), licensed in Malta since 2012- > Gambling vs. Investment??!!
*approx. 400 casino games
*Single bets, combined and system bets, sport bets
* Lottery, IQ-Game
* Live Poker
* According to Lopoca the games develop solely through recommendation (participants acquire gamblers and earn commissions through them i.e. cash back commission by partner registration) and Lopoca contradicts all allegations of a pyramid scheme and claims that commissions are solely based on product related multi-level-marketing (MLM).
* 5% trading fee for all buyers and sellers
* Gambling addiction prevention by restricting the yearly deposit limit to EUR 5,000 or a maximum of 10% of the annual income of each gambler
* 5% of the revenues are donated (Nepal, Ghana, …)
Lopoca operates solely on the recruitment of new members. If payouts are made at all they take place under difficult conditions. There is an unclear company structure with no transparency, etc. There are claims like “we did a sale trial run in the amount of EUR 300,00 with an initial promising share development but failed at our first attempt to distribute the profits”. The standard excuses used by these structures are always “due to the exchange of our existing computer system; … due to the transition to new software; … due to server/hardware failure …, etc.
In cooperation with our professional lawyers and business detective agencies we thoroughly researched and deliberated on Premium Safe including their subsidiaries and agents.
In legal terms claims for damages against the company and their general manager Uckermann should go through without any problems since the business model of Premium Safe represents a deposit business pursuant to the Banking Act (KWG) requiring the permission of the banking supervision (Bafin).
The operation of deposit transactions without the required authorization is a violation of § 32 German Banking Act (KWG) in conjunction with § 1 para. 1 no. 1 Banking Act (KWG), § 54 Banking Act and is a criminal offense but is also simultaneously a protective legislation in accordance with § 823 of the Civil Code (BGB) representing a legal basis for claims for damages.
Furthermore, German courts acknowledge the liability of responsible managing directors and CEOs since managing directors were obliged to verify whether permits according to the German Banking Act were required.
Furthermore, liability for fraud due to the operation of a snowball system/Ponzi scheme would apply according to § 263 of the Criminal Code in conjunction with §823 II of the Civil Code. The enforcement could however proof to be problematic due to the lack of funds of Premium Safe Ltd. & Co. Verwaltungs KG and Uckermann is nowhere to be found.
However, there still remains a claim against the investment advisors who recommend the investments after investigating whether the consulting duties/duties of disclosure were breached.
… Shortly we will provide more information