Business ProfileforNovatech Advisors, LLC

As of November 22, 2022:

The California Department of Financial Protection and Innovation has issued a Desist and Refrain Order against Novatech LTD alleging:

Beginning at least as early as 2022, NovaTech offered and sold securities in the form of investment contracts in California through general solicitations on its website. NovaTech referred to these investment contracts as “Packages.”

NovaTech held itself out as a crypto asset and forex trading platform. The purported purpose of the securities offerings was for NovaTech to use investor funds to engage in crypto asset and forex trading, which in turn would generate returns for investors who purchased Packages.

NovaTech claimed to execute this trading activity using its percentage allocation management module (PAMM) accounts. According to NovaTech, investors could invest their funds in NovaTech’s master trading accounts, which NovaTech would then pool with other investors’ funds to be managed and traded by NovaTech’s “experienced traders and bots.”

NovaTech specifically targeted investors with little to no experience in trading crypto assets and forex, telling investors and prospective investors that NovaTech’s “fully automated” investment products allow investors to “earn without having to trade” and that “no experience is needed.”

The Packages were publicly available to investors in California via NovaTech’s website: www.novatechfx.com.

In addition to its purported trading activities, NovaTech claimed to generate additional revenue through the operation of Bitcoin ATMs by an affiliated entity, Smart Bit, Inc. NovaTech told investors that the profits from its Bitcoin ATM business would be included in the distributions it made to investors who had purchased Packages.

After investors created their accounts on the NovaTech website, investors could log into their account using their username and password to monitor their purported balance and returns, deposit funds, and request withdrawals.

NovaTech facilitated deposits and withdrawals using crypto assets, including Tether (USDT), Bitcoin (BTC), Ether (ETH), and Litecoin (LTC).

NovaTech did not provide financial statements to investors or potential investors. Instead, NovaTech provided a simple line chart showing NovaTech’s purported weekly profits and losses over time and a bar graph showing NovaTech’s purported monthly profits over time. According to the charts, NovaTech averaged nearly 3% returns for investors per week and had never incurred a weekly loss.

As part of its solicitation efforts, NovaTech used a multi-level marketing scheme that would reward investors for inducing others to send money to NovaTech. According to this program, investors would be paid a referral bonus based on the amount of funds deposited by the investors that they recruited. Investors would also be paid additional referral bonuses when the investors that they recruited, in turn, recruited new investors.

Investors seeking to take advantage of NovaTech’s referral program created and posted videos to YouTube and posted content on other social media websites to recruit others to invest in NovaTech.

In fact, NovaTech was luring investors into what is known as a High Yield Investment Program (HYIP). HYIPs are unregistered investments typically run by unlicensed individuals – and are often frauds. The hallmark of an HYIP scam is the promise of high returns on an annual (or even monthly, weekly, or daily) basis at little or no risk to the investor. Another key element of most HYIPs is a referral program, in which the HYIP offers referral commissions or bonuses to investors
to recruit new investors. This usually leads to investors sharing information about the HYIP with their friends and family and promoting HYIPs on social media.

The Packages offered by NovaTech, Cynthia Petion, and Eddy Petion were securities that were neither qualified nor exempt from the qualification requirement under the CSL. The Department has not issued a permit or other form of qualification authorizing NovaTech, Cynthia Petion, or Eddy Petion to sell these securities in California.

In connection with the offer or sale of these securities, NovaTech, Cynthia Petion, and Eddy Petion made, or caused to be made, untrue statements of material fact and material omissions to investors and potential investors, including but not limited to the following:
a. falsely representing that NovaTech is a registered hedge fund in the United States;
b. falsely representing that NovaTech is a registered investment adviser;
c. falsely representing that NovaTech is a registered broker;
d. failing to disclose that the offer or sale of NovaTech’s securities was not qualified in California;
e. failing to provide any qualifications to substantiate claims that investors’ funds are managed and traded by experienced traders;
f. failing to disclose that in March 2011, Cynthia Petion and Eddy Petion filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the Eastern    District of New York;
g. failing to disclose that in August 2019, a debt buyer sued Cynthia Petion in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, Civil Division, for breach of contract and unjust enrichment, alleging that Cynthia Petion had failed and/or refused to repay a loan;
h. failing to disclose that in July 2018, a mortgage lender sued Eddy Petion and Cynthia Petion in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, Civil Division, in an action to foreclose a defaulted mortgage on residential real property held by Eddy Petion and Cynthia Petion;
i. failing to disclose that in April 2018, a credit card issuer sued Cynthia Petion in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida, Civil Division, for account stated and unjust enrichment. A judgment was entered against Cynthia Petion in the amount of $11,776.55; and
j. failing to disclose that in October 2017, a credit card issuer sued Eddy Petion in the County Court in and for Palm Beach County, Florida, for account stated. A judgment was entered against Eddy Petion in the amount of $4,740.56.

Based on the foregoing findings, the Commissioner is of the opinion that the securities offered or sold by Nova Tech Ltd. a/k/a NovaTech, Ltd., NovaTech Advisors, LLC, NovaPay, LLC, NovaTrading OÜ, Cynthia Petion, and Eddy Petion were subject to qualification under the CSL and have been or are being offered or sold without first being qualified in violation of Corporations Code section 25110

NovaTrading OÜ, Cynthia Petion, and Eddy Petion were subject to qualification under the Corporate Securities Law and have been or are being offered or sold without first being qualified in violation of Corporations Code Section 25110.

Pursuant to Corporations Code section 25532, Nova Tech Ltd. a/k/a NovaTech, Ltd., NovaTech Advisors, LLC, NovaPay, LLC, NovaTrading OÜ, Cynthia Petion, and Eddy Petion are hereby ordered to desist and refrain from the further offer or sale of securities in California, including but not limited to investment contracts known as Packages, unless and until the qualification requirements of the CSL have been met.

Link: https://dfpi.ca.gov/wp-content/uploads/sites/337/2022/11/D-R-Nova-Tech-Ltd..pdf?emrc=c4fa5e

As of January 5, 2024

On January 5, the Securities Division entered a Final Order against NovaTech Ltd., Cynthia Petion, and Eddie Petion (“Respondents.”) The Securities Division alleged that, beginning no later than September of 2019, and continuing through the present, Respondents offered and sold unregistered securities in the form of percentage allocation management module accounts (PAMM Accounts). During this time, at least three Washington state residents purchased these securities and were unable to withdraw their investments from Respondents. The Securities Division alleged that the Respondents sold unregistered securities and violated the anti-fraud provision of the Securities Act of Washington. The Securities Division ordered the Respondents to cease and desist from violating the Securities Act of Washington. The Final Order orders Respondents to cease and desist from violating the Securities Act of Washington. The Respondents have a right to petition for judicial review of this matter.

LINK: https://dfi.wa.gov/documents/securities-orders/S-23-3539-23-FO01.pdf