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You are on your own, CMA tells Cytonn investors

Capital Markets Authority confirmed Wyckliffe Shamiah as CEO on November 19, 2020.

The Capital Markets Regulator (CMA) on Thursday distanced itself from a product being offered by cash-strapped firm Cytonn.

The CMA, in response to an investor’s video clip that went viral on social media, said it was cautioning investors against investing in unlicensed and unapproved entities.

The investor had gone online to lay bare her frustrations, and cautioned others against investing in unlicensed and unapproved investment products.

Ms Lynn Ngugi, who is an Advocate of the High Court of Kenya, alleged that the company was frustrating her after making an initial investment in 2019 and asking for her money back in 2020.

“Cytonn has been frustrating myself and my friends. We invested with them a while back,” she said.

The CMA chief executive, Mr Wycliffe Shamiah, is now advising investors to only put their money in licensed and approved entities that offer regulated products, to enable them get protection offered by the Authority through the capital market’s legal and regulatory framework.

CMA says it has licensed Cytonn Asset Management Limited, which is licensed as a Fund Manager with regulated funds including the Cytonn Money Market Fund, Cytonn Balanced Fund, Cytonn Equity Fund, Cytonn Africa Financial Services Fund, Cytonn Money Market Fund (USD), and Cytonn High Yield Fund.

“The Authority confirms that Cytonn Investments is not a licensed and approved entity,” Mr Shamiah said.

“Investors who are affected by investing in unregulated products should report to the Capital Markets Fraud Investigation Unit (CMFIU), which is the Police Unit attached to the Capital Markets Authority. CMFIU is currently investigating the issue for criminal violations for investors in the Cytonn High Yield Solutions (CHYS),” he added.

Created confusion

Confusion for investors came about after the investment company set up two products with similar names to dupe investors who may not have been able to differentiate the products. For instance, the Cytonn High Yield Fund (CHYF) is regulated by CMA, while another known as the Cytonn High Yield Solutions (CHYS), was not, meaning that there was no recourse for action in case anything went wrong.

The CMA, in its statement, noted that complaints regarding Cytonn mostly touched on the unregulated products.

“So far CMA has not received any complaints on these regulated products,” it said. – nation.co.ke