But FSCA says its investigations into the company continue. From Moneyweb.
Controversial multi-level marketing group GSB, also known as Gold Standard Corporation, has settled multiple civil claims from securities regulators in 21 states in the US as well as the province of British Columbia in Canada.
The company has a number of affiliates going under similar names, such as GS Partners and GSB Money. Although SA is not part of the settlement agreement, locals who invested in the scheme can also apply for a refund (see below).
Read: GS Partners not licensed to solicit investments in SA – FSCA [Nov 2023]
Despite the settlement in North America, South Africa’s Financial Sector Conduct Authority (FSCA) says it is continuing to investigate the group.
“The time to complete the investigation has been extended because of challenges raised by the investigated parties relating to the scope of the FSCA investigation,” says Gerhard van Deventer, head of enforcement at the FSCA.
The FSCA issued a warning in November 2023 urging the public to be careful when dealing with GS Partners, as it was not licensed to provide financial products or services in SA and was offering unrealistic returns.
It used sport stars such as Victor Matfield to market its products.
In terms of the settlement with regulators in North America, GSB and its chair, Josip Heit, agreed not to offer or sell unregistered securities in the settling jurisdictions, which in turn agreed not to allege fraud or dishonest practices by Heit or GSB entities.
Customers in these jurisdictions will be refunded their initial capital, without any promised returns.
Too good to be true …
The company came to the attention of regulators around the world after offering what seemed implausible returns on various investments.
As part of the settlement, the Texas State Securities Board and other regulators have agreed to withdraw any allegations of fraud on the part of GSB, its affiliates, or Heit.
Read:
FSCA warns against dubious brokers, platforms offering easy money
FSCA cracks the enforcement whip … 1 668 times
Regulators started investigating investments offered by the group in various digital assets and metaverses, including:
- The G999 token, a digital asset deployed on the blockchain, linked to gold;
- XLT Vouchers, a digital asset purportedly representing ownership interests in a skyscraper; and
- Investments in a so-called ‘staking pool’ (earning returns) in a metaverse known as Lydian World.
‘Most feared law firm in the world’ …
“Any settling jurisdiction that previously alleged fraud or dishonest practices will withdraw, redact, or amend their prior filings to remove those allegations,” according to a statement by Avi Perry and Alex Spiro, partners at Quinn Emanuel Urquhart & Sullivan, who served as counsel for Heit and GSB Germany – named three times as the “most feared” law firm in the world.
“No monetary penalties will be imposed. Instead, Mr. Heit and the GSB companies have agreed to refund all eligible customers in the settling jurisdictions,” says the lawyers.
The attorneys said they have also issued a cease-and-desist notice to the website BehindMLM.com, for what they claim are false and defamatory statements about Heit and his companies.
BehindMLM, which operates anonymously despite legal attempts to unearth the site owner’s real identity, hit back and defended its reporting on Heit and GSB, and refused to take any action in response to the cease-and-desist notice.
The website says its claims are well documented and in the public domain.
SA promoters sue detractors
As Moneyweb previously reported, GSB and some of its South Africans promoters – Tony De Gouveia, Bruce Hughes, Andrew Eaton and Brendon Earp-Jones – are suing three commentators appearing on the YouTube channel G-Crypt for defamation and loss of income to the tune of R476 million after they criticised the company’s investment offering.
Read: Crypto marketer arrested for fraud is released on bail [Jun 2024]
The G-Crypt activists – Louis Nel, Francois Harris and Gareth Grobler have rebuffed an offer by GSB to settle, which required each party to pay their own costs and sign a non-disclosure agreement.
Nel, Harris and Grobler are counter-suing GSP, seeking to have it declared an illegal scheme. That case is still ongoing.
What to do for a refund
Representatives for the company in SA inform Moneyweb that while the settlement applies only to the US and Canada, anyone outside those regions can seek a refund by sending an email to compliance@gspro.network.
If anyone is unsure how to go about applying for a refund, they can write directly to Jacques van Rensburg at Jaques@vanrensburg.co.za.
