News releases 12.3.2010 – 8/2010 

New WinCapita tells it intends to engage in foreign exchange trading 

A new company calling itself Worldwide Investment Solutions Wincapita Oy, (the so-called new WinCapita) has stepped into the public eye. The Board of the new company has declared that they intend to engage in foreign exchange trading (Forex trading). In Finland, companies engaged only in foreign exchange trading do not come under the supervision of the Financial Supervisory Authority (FIN-FSA).

Forex trading is a non-restricted business activity, not requiring operating authorisaiton from either the Financial Supervisory Authority or any other equivalent competent authority. However, where foreign currency trading is linked to the transfer or execution of foreign currency derivatives (ie currency options, currency forwards) their activities fall under the auspices of  FIN-FSA. From the authorisation point of view, their operations would then be considered to be the provision of investment services and financial instruments. Should the company offer its shares to the public, the company is obliged to publish a prospectus approved by the Financial Supervisory Authority.

The operations of the company appearing publically under the same name (WinCapita) have been under investigation since 25 March 2008*. In earlier police investigations, it was revealed that the company's funds were made up of direct contributions paid by the members of Wincapita's investment club and not the FX trading it had marketed itself as operating. This type of activity is known as pyramid trading or Ponzi scheme, whose main features typically include the promise of massive returns, commission for those recruiting new members and significant deficiency in any background information on the investments. Money collection of this type is contrary to the provisions of the Finnish Money Collection Act and punishment is laid out in the Finnish Criminal Code. Compliance with the Money Collection Act is monitored by the Minster of the Interior and by the Police force. 

Link to the National Bureau of Investigations regarding their investigation into the operations of WinCapita, (website information in Finnish) http://www.poliisi.fi/poliisi/krp/home.nsf/pages/3C9C912CB0C6B3D0C22574280036EA45

For further information, please contact
Harri Hirvi, Legal Counsel, tel. +358 10 831 5284. 

* ERRATUM: The date mentioned earlier was incorrect. On 17 March the date 25 August 2005 was corrected to 25 March 2008.