NovaTech FX has received a securities fraud cease and desist from Wisconsin’s Department of Financial Institutions.
DFI’s notice details allegations of fraud, and includes proposed restitution and civil penalty orders.
DFI’s April 4th order lists Cynthia Petion, Eddie Petion, Nova Tech Ltd and Paul J. DeRenzo as respondents.
- Cynthia and Eddy Petion own and operate NovaTech FX
- Nova Tech Ltd is a shell company incorporated in St. Vincent and Grenadines
- Paul J. DeRenzo is a NovaTech promoter from Pittsburgh, Pennsylvania
As a matter of due-diligence, the order opens by citing the Petions financial history.
In or about 2011, Cynthia and Eddie Petion filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the Eastern District of New York.
In or about August 2019, a debt buyer sued Cynthia Petion in the Circuit Court of the Fifteenth Judicial Circuit in 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.
In or about July 2018, a mortgage lender sued Eddie 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 Eddie Petion and Cynthia Petion.
In or about 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, for account stated and unjust enrichment.
A judgment was entered against Cynthia Petion in the amount of $11,776.
In or about October 2017, a credit card issuer sued Eddie Petion in the County Court in and for Palm Beach County Florida, for account stated.
A judgment was entered against Eddie Petion in the amount of $4,740.56.
Illegal conduct detailed in DFI’s order begins with promotion of NovaTech FX by Paul DeRenzo (right).
DeRenzo promoted NovaTech on Craigslist;
We Trade For You-Get Paid Every Week
Let the professionals trade for you. They have a remarkable track record.
You make steady profits that you can withdraw or let them compound. You have access to your funds the entire time. Completely passive income.
It’s free to join and you can get started with very low amounts. Get paid each week. Returns have averaged over 3% per week.
Completely passive income, just takes a few minutes per week and you don’t need any special knowledge.
It’s a very simple program. Email for more information.
A Wisconsin resident, aliased “ME” in the order, responded to DeRenzo’s ad on November 16th, 2022.
DeRenzo contacted ME via phone and directed him to a Zoom presentation, held later that same day.
On the Zoom presentation DeRenzo pitched NovaTech FX as an “almost 3% a week” passive investment opportunity.
Nova Tech’s average weekly return for investors was almost 3% a week, and a chart displaying no losses whatsoever.
DeRenzo told ME that even during in the weeks when cryptocurrency lost value, Nova Tech investors still got paid because Nova Tech’s traders “make money when the market is going up, down or sideways”.
Nova Tech had purportedly managed funds for investors which had purportedly earned 131 percent so far in 2022.
DeRenzo said crypto went up in January, but is now down, but the Nova Tech traders always made money for investors.
On December 1st ME queried DeRenzo on California’s NovaTech FX securities fraud cease and desist.
DeRenzo told ME has was aware of the order and the fraud allegations but did not elaborate further or provide any additional information.
DFI additionally notes that neither NovaTech FX or any of its promoters informed ME of the Petions legal history, NovaTech FX’s regulatory problems, and that none of the Respondents were registered to offer or sell securities in Wisconsin.
Nova Tech posted numerous videos to YouTube featuring Cynthia and Eddie Petion representing to viewers that Nova Tech was registered as a hedge fund, broker-dealer, and investment adviser between 2020 and 2022.
Nova Tech published posts to its Telegram account representing that it was a registered hedge fund on or about May 4, 2022.
As part of their investigation, DFI has established NovaTech FX investors in Wisconsin number “at least 270”.
Pursuant to (Wisconsin state law), an investment contract security includes an investment in a common enterprise with the expectation of profits to be derived through the essential efforts of someone other than the investor.
It is unlawful for a person, in connection with the offer, sale, or purchase of a security, directly or indirectly, to make an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.
The investment packages offered by (NovaTech FX) are investment contract securities pursuant to (Wisconsin state law), because Nova Tech investors’ funds were to be managed by third party traders to generate profits trading cryptocurrency and forex for the investors without any active involvement by the investors.
Nova Tech, Eddie Petion, and Cynthia Petion, violated (Wisconsin state law) when they offered securities in Wisconsin and omitted to state material facts necessary to make the statements made.
Nova Tech, Eddie Petion, and Cynthia Petion, violated (Wisconsin state law) when they offered securities in Wisconsin and made misrepresentations of material fact, including but not limited to the representations that NovaTech was registered as a hedge fund, broker-dealer, and investment advisor when it had never been registered in any of those capacities.
None of the above Respondents have ever been registered to offer or sell securities with the Division, Securities and Exchange Commission (SEC), or the Financial Regulatory Authority (FINRA).
As a result of the alleged securities fraud violations, DFI has ordered NovaTech FX and the Petions to
cease and desist from making or causing to be made to any person or entity in Wisconsin any further offers or sales of securities … until such securities qualify as covered securities or are registered.
Restitution has been ordered for all NovaTech FX Wisconsin investors. The Petions are also required to pay a $50,000 civil penalty.
Nova Tech Ltd, Cynthia Petion and Eddie Petion shall pay restitution within 30 calendar days of the issuance of this order and provide the Division with proof of the restitution to the Wisconsin investors by no later than 30 days after restitution has been paid.
It is further proposed that an order be issued imposing a civil penalty against Nova Tech Ltd, Cynthia Petion, and Eddie Petion, in the form of an administrative assessment totaling $50,000 for the violations committed pursuant to (Wisconsin state law).
The civil penalty is contingent on NovaTech FX paying restitution to Wisconsin based residents.
Finally, NovaTech FX will be required to pay DFI for costs related to its investigation. That amount is to be determined at a later date.
NovaTech FX and the Petions have 30 days to request a hearing to challenge DFI’s allegations. If they fail to do so, the proposed orders become permanent.
Failure to adhere to DFI’s order is a criminal offense under Wisconsin state law.
To the best of my knowledge, NovaTech FX has not informed investors of DFI’s cease and desist order.
Since then limited withdrawals are being paid under increasingly restrictive conditions. NovaTech FX’s weekly returns have dropped from “almost 3% a week” to a fraction of a percent.
As of March 2023, SimilarWeb estimated 72% of NovaTech FX’s website traffic originated out of the US. Whether the Petions are still in the US has been unclear since late 2022.
Securities law in the US is materially the same at the state and federal level. BehindMLM anticipates federal securities and wire fraud charges will be filed against NovaTech FX at some point.