The Cyprus Securities and Exchange Commission (CySEC) has imposed a fine of €400,000 on the Cyprus investment firm Goldenburg Group.
In a statement on 25 July, CySEC said it reached this decision due to the Company's infringement of multiple provisions of the Investment Services and Activities and Regulated Markets Law of 2017 and the Regulation (EU) 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs).
Goldenburg Group had failed to establish and implement effective organizational and administrative arrangements to ensure that the interests of its clients were not adversely affected by a conflict of interest, the regulator said.
CySEC found that Goldenburg Group did not take all appropriate measures to identify and avoid and/or manage a conflict of interest between the employees of the company acting as its marketing agent in the territory of Slovenia and its customers, residents of Slovenia.
It also found that "Goldenburg Group Ltd did not act fairly, honestly and professionally, when providing investment services, in accordance with the best interests of its clients, in regards to the actions/practices of the Company's employees and/or the employees of the company that was acting as the Company's marketing agent in the territory of Slovenia.
"Further, information addressed to its customers in Slovenia was misleading and the company did not ensure that its employees who were providing investment advice had the required knowledge and competence to fulfil their obligations.
CySEC found that Goldenburg Group failed to notify in advance the Supervisory Authority of Slovenia that it was posting key information documents (KIDs) on its website, according to its obligation under the Slovenian national law. Goldenburg Group also failed to include necessary regulation information in key information documents.
The Chairman of CySEC, Dr George Theocharides, said: "CySEC takes any misconduct by supervised entities seriously and is determined to bring noncompliant operations to a halt in order to enhance investor protection and the responsible growth of the investment sector."
"The imposition of administrative fines is a key tool we use to reduce non-compliance, and we will continue to take action against CIFs that fail to comply with the obligations placed upon them. CIFs are urged to ensure that they fully comply with their regulatory obligations, with an emphasis on strengthening their compliance function to safeguard investor protection."
