TRENTON – New Jersey investors are being strongly advised to redeem their assets invested with Gs Partners and related entities. This urgent recommendation follows an agreement reached to resolve a multistate investigation into alleged securities violations by the company, as announced by Attorney General Matthew J. Platkin, the Division of Consumer Affairs, and its Bureau of Securities.
The preliminary settlement mandates GSB Gold Standard Corporation AG, a company based in Germany claiming operations in fintech and banking, along with GSB Gold Standard Bank LTD, also known as GS Partners, its owner and Chairman Josip Heit, and other affiliated entities (collectively referred to as “GSB”), to return investor funds. These funds were used to purchase investment products linked to digital assets and metaverse technologies.
“The evolution of technology in the securities market and the creation of innovative investment products from it does not exempt them from the established securities laws,” stated Attorney General Platkin. “This settlement in principle underscores New Jersey’s unwavering dedication to safeguarding its investors and upholding the integrity of the state’s securities market. We are committed to investigating and halting entities that attempt to bypass our laws through the illegal sale of investment products tied to emerging technologies.”
The multistate investigation, now resolved by this agreement, focused on GSB’s alleged breaches of securities laws across multiple jurisdictions, including New Jersey. The allegations stem from the offer and sale of various crypto-related investments that promised substantial returns. These investments included virtual land plots and a staking pool within a metaverse environment called Lydian World, a crypto token staking reward purportedly convertible into physical gold, and vouchers supposedly representing tokenized shares of a skyscraper. The investigation also scrutinized GSB’s sales of certificates that used gamification techniques to encourage purchasers to continuously increase their principal investments. This was allegedly to unlock passive income features, such as the distribution of weekly or monthly passive income.
Cari Fais, Director of the Division of Consumer Affairs, highlighted the vulnerability of investors drawn to novel investment opportunities: “Investors who are eager to capitalize on the latest investment product trends can unfortunately become easy targets for scammers looking to exploit this enthusiasm. Agreements like this one are crucial for raising public awareness about the inherent risks associated with investment opportunities that leverage cutting-edge technology and promise high returns to lure investors.”
As part of the agreement with the Bureau, GS Partners has committed to cease offering, selling, or renewing any security in New Jersey without first adhering to registration or exemption requirements. Furthermore, GS Partners is obligated to return the full amount of all monies and cryptocurrencies invested or deposited by New Jersey residents.
Elizabeth M. Harris, Bureau Chief, emphasized the investor-centric aim of the agreement: “This agreement is fundamentally structured to ensure that New Jersey investors are made whole. We strongly encourage anyone who has purchased products or services from GS Partners to seize this opportunity to recover their invested funds.”
New Jersey residents are entitled to receive the value of their investments or deposits, net of any withdrawals already made. This settlement encompasses all products and services sold by GS Partners, provided that the investments purchased from these entities or transactions made on behalf of investors can be properly verified.
The claim process is anticipated to commence in early November and is being managed by AlixPartners, LLP. Importantly, the refunds distributed to investors will not be reduced to cover the fees and expenses incurred by AlixPartners. Further details about the settlement are available on AlixPartners’ website: https://gsbsettlement.com.
The settlement in principle also requires GS Partners to notify investors about withdrawing or liquidating assets from its platforms and to provide them with the necessary instructions. Upon completion of all asset withdrawals and claims by New Jersey clients under the established claims process, and the fulfillment of all other settlement terms, GS Partners will enter into a consent order with the Bureau. This order will mandate that they cease and desist from offering or selling unregistered securities to New Jersey residents, thereby ensuring compliance with securities laws.
The Bureau’s investigation was conducted by a team including Deputy Bureau Chief Amy Kopleton, Supervising Investigator Jude Tanella, Investigator Tom Andreopoulos, and Investigator Richard Pearsall, all from the Enforcement Unit of the Bureau of Securities, within the Division of Consumer Affairs.
The Bureau of Securities is tasked with the critical responsibility of protecting investors from investment fraud and regulating the securities industry within New Jersey. Investors are strongly urged to “Check Before You Invest.” To verify the registration status and disciplinary history of any financial professional operating in or from New Jersey, investors can contact the Bureau toll-free within New Jersey at 1-866-I-INVEST (1-866-446-8378) or from outside New Jersey at (973) 504-3600. Additional information is also available on the Bureau’s website: www.NJSecurities.gov. Investors can also reach out to the Bureau for assistance, to raise concerns, or to file complaints regarding New Jersey-based financial professionals or investments.
