Between 2013 and 2015, Maxim Capital Limited (“Maxim Capital”), a New Zealand incorporated entity, offered a fund management scheme to investors in Singapore. Maxim Capital promised investors monthly returns of about 6 to 8%, purportedly derived from the company’s trades in leveraged foreign exchange. Investors in the scheme could also receive commissions both from recruiting new investors to the scheme, and from the recruitment efforts of the new investors they brought in through a referral scheme known as the ‘Maxim Trader Compensation Plan’.
The Commercial Affairs Department investigated Maxim Capital after a police report was lodged against the company. On 9 January 2018, three persons associated with the Maxim Trader Compensation Plan were charged in court.
Two of the persons, being promoters of the Maxim Trader Compensation Plan, were sentenced a few months ago. Chin Ming Kam, a 45-year-old man, and Goh Seow Mooi, a 60-year-old woman, each pleaded guilty to one count of promoting a prohibited pyramid selling scheme under Section 3(1) of the Multi-Level Marketing (MLM) Act each. Both of them were also charged with carrying on a business of leveraged foreign exchange trading without the requisite capital markets services licence under Section 82(1) of the SFA taken into consideration for sentencing purposes. They were sentenced to a fine of S$120,000 each.
On 26 March 2020, the Chief Executive Officer of Maxim Capital, Andrew Lim Ann Hoe, a 63-year-old man, pleaded guilty to one count of consenting Maxim Capital to promote a prohibited pyramid selling scheme under Section 3(1) read with Section 6(1) of the MLM Act. Another charge of carrying on a business of fund management without the requisite capital markets services licence under Section 82(1) read with Section 331(1) of the Securities and Futures Act was taken into consideration. He was sentenced to eight months’ imprisonment on 5 June 2020.
Members of the public are advised that it is unlawful to:
- Promote or participate in a multi-level marketing scheme or arrangement or a pyramid selling scheme or arrangement.
- Carry on business in any regulated activity without a Capital Markets Services Licence issued by MAS, unless otherwise exempted or excluded.
Operators and members of public should acquaint themselves with the releva
nt laws, and seek legal advice from lawyers, where necessary.
Source: Singapore Police Force