CMDA: Lacking enforcement powers regarding scams, collective responsibility to minimize losses

Capital Market Development Authority (CMDA) states while the authority has the legal responsibility to investigate scam cases, it lacks enforcement powers.

Speaking during state media, PSM’s ‘Raajje Miadhu’ program, CMDA’s CEO Mohamed Hussain Manik said the Authority’s mandate concerning scams is restricted to issues involving securities.

As such, he explained that, under current laws and regulations, if a scam is not related to securities, it does not fall within the CMDA’s purview.

Manik, citing existing laws and regulations contain loopholes, said scammers exploit these loopholes to carry out their schemes.

He acknowledged that such fraudulent activities often lead to significant financial losses for the public. In light of this, he emphasized that it is our collective responsibility to work towards minimizing these losses.

“Although CMDA has a legal responsibility [regarding scams], we have very little enforcement capabilities. We are forced to work alongside the police or another investigative body,” he said.

Manik urged against investing with unregistered companies.

Notably, a pyramid scheme that gained huge traction in the Maldives with over 41.500 investors crashed last Saturday.

Chief Inspector of Police, and head of the Anti-Scam Centre of the Maldives Police Service Adam Naveed told Sun that though the authority cannot accurately tell how many had invested on the Gemcue investment scheme (GMCE), heir investigation into the scam so far has revealed over a million dollars have been invested on it.

Naveed stressed that there is little hope of recovering the money invested since the funds were first converted to cryptocurrency before they were deposited into the GMCE application.

Amidst the case, Parliament’s Committee on Information Communication Technology has decided to launch an investigation into pyramid schemes, scams and poker platforms.