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03 March 2021

Pegasus Markets Limited and Director Michael Reps

These charges relate to a company and its New Zealand based director for breaches of the Financial Service Providers (Registration and Dispute Resolution) Act.

March 2021

Michael Reps, the New Zealand-based director of Pegasus Markets Limited, has been sentenced to two months’ community detention and 90 hours’ community work after criminal charges were brought by the Financial Markets Authority (FMA) for breaches to the Financial Service Providers (Registration and Dispute Resolution) Act (FSP Act).

Judge Jelas delivered the sentence today in the Waitakere District Court and reserved her reasons.

The FMA charged Pegasus and Mr Reps after the company stated on two different websites that it was registered on the Financial Service Providers Register (FSPR), despite it being deregistered. Pegasus was subsequently warned by the Companies Office about the misleading statements but continued the misrepresentation for two-and-a-half years.

December 2020

In the North Shore District Court, Judge Jelas sentenced Pegasus Markets to a fine of $200,000. The judge said, "New Zealand cannot be a country where breaches of its financial markets regulatory systems can be an acceptable commercial consequence. The Court’s response to breaches needs to be sufficient to ensure financial operators in the New Zealand market will incur real and meaningful consequences if they breach the regulatory framework."

Mr Reps is due to be sentenced in 2021.

September 2020

Pegasus Markets Ltd and its New Zealand-based director, Michael Reps, were found guilty of all criminal charges brought by the FMA for breaches to the Financial Service Providers (Registration and Dispute Resolution) Act (FSP Act).

In the North Shore District Court, Judge Jelas found Pegasus guilty of two charges of breaching section 12 of the FSP Act, which states that no one can purport to hold out as registered on the FSPR unless they are registered on the FSPR and a member of an approved dispute resolution scheme.

Mr Reps was also found guilty of breaching section 40, for knowingly failing to prevent Pegasus from committing an offence under the Act.

16 April 2019

The case remains before the North Shore District Court.

31 August 2018

Hearing to be held at the North Shore District Court.

27 February 2018

FMA has filed criminal charges against Pegasus Markets Ltd and Michael Reps for breaching the Financial Service Providers (Registration and Dispute Resolution) Act (FSP Act).

The company is charged with two counts of breaching section 12 of the FSP Act.

The New Zealand-based director is charged with two counts of breaching sections 12 and 40 of the FSP Act.

Section 12 of the FSP Act provides that no person, including a corporation, can hold out that it is in the business of providing a financial service unless it is registered on the FSPR and a member of an approved dispute resolution scheme. Section 40 of the FSP Act covers a director’s liability if he knowingly authorises or knowingly fails to prevent a corporation committing an offence under the Act.

Each charge for breaching section 12 of the FSP Act carries a maximum fine of $300,000 for a company and a maximum penalty of either $100,000 fine and/or 1 year imprisonment for an individual. These charges are the first of their kind under Section 12 of the FSP Act.

The FMA alleges the company continued to hold out on two different websites that it was registered on the Financial Service Providers Register (FSPR) after it had been deregistered and despite subsequent warnings from Companies Office regarding misleading statements on its website as to FSPR registration.