The FMA has filed civil proceedings against InvestNow in the High Court. Photo: RNZ / Rebekah Parsons-King
The Financial Markets Authority is headed to court again with another case for alleged breaches of the anti-money laundering rules, even as the government has signalled it will move to ease the restrictions.
The FMA has filed civil proceedings in the High Court against on-line platform InvestNow for breaches of the Anti-Money Laundering and Countering of Terrorism Act (AML/CFT) between 2018 and 2022.
It alleged the company had failed to set up and maintain an adequate anti-money laundering programme; did not do sufficient due diligence on customers; did not monitor conduct; or end business links when required.
The FMA warned InvestNow about the supposed shortcomings and breaches in 2022.
"After issuing the warning, the FMA opened an investigation into InvestNow's compliance with the Act and concluded that the extent of InvestNow's non-compliance warrants the commencement of civil proceedings," the FMA said in a statement.
"The FMA considers InvestNow's failures to be significant and, in some respects, systemic."
It said it was seeking a court declaration that the law had been breached, and was also looking for a financial penalty.
InvestNow called the legal action disappointing, especially since it had complied with all the actions the FMA required.
"Since the onset of the FMA investigation in 2021, InvestNow has fully co-operated with the FMA. The investigation did not identify any evidence of consumer harm or money laundering," the company said.
The government has announced plans to take AML/CFT enforcement away from the FMA and the Reserve Bank and give full responsibility to the Department of Internal Affairs, and to "streamline" procedures and rules to remove "unnecessary red tape".
