Karatbars International warning issued in Canada
March is Fraud Prevention month in Canada and, having already issued a warning on Phil Ming Xu’s WCM777 Ponzi scheme earlier this month, the Autorité des marchés financiers (AMF) have now set their sights on Karatbars International.
The AMF’s latest warning, issued on March the 20th, warns Quebec investors ‘to be cautious about an investment program linked to the German company Karatbars International GmbH‘.
(Karatbars International’s) investment products are primarily promoted through conferences, the Internet and social media.
With the company’s “Affiliates” program, investors can make Internet-based purchases through Karatbars plans and they are encouraged to recruit two other Affiliates. These Affiliates are in turn encouraged to recruit two other Affiliates each, and so on.
Affiliates are lured by the possibility of earning large payouts, in particular through a percentage of amounts collected from the Karatbars plans and gold products purchased by referrals.
The AMF reminds investors of the risks involved when investing in companies such as Karatbars that are not reporting issuers and do not hold AMF registration or authorization. Quebeckers should therefore be cautious with product offerings from Karatbars since they might incur losses that are not covered by the financial services compensation fund or deposit insurance.
The AMF is closely monitoring this matter and will take any measures deemed necessary in the event of violations under the laws it administers.
Update 22nd December 2016 – On November 4th, 2016, a ruling on the case was made in favor of the AMF.
The ruling bans promotion of Karatbars International in Canada. Karatbars and three local promoters of the scheme were also fined.