2012-03-16
The Bank of Lithuania applied to the Prosecutor General’s Office concerning the activity of “MMM-2011” and warns people to safeguard their money
Under suspicions that the financial system “MMM-2011” may have criminal activity attributes, the Bank of Lithuania applied to the Prosecutor General’s Office with a request to initiate a pre-trial investigation and criminal prosecutionfor potentially illegal activity. The Bank of Lithuania also takes the initiative to concentrate the actions of public institutions to stop potential criminal activities and to protect the residents.
The Bank of Lithuania suspects that the system “MMM-2011”, which has clear signs of a financial pyramid, violates the laws of Lithuania by offering the residents to put deposits for especially high interest, as the laws state that only licensed credit institutions are entitled to accept deposits and other repayable funds from unprofessional market participants.
As the Bank of Lithuania has not issued neither credit institution licenses, nor other financial institution licenses to any companies that have an abbreviation “MMM” in their title or are related to Mavrodi Sergej Panteleevič, it applied to the Prosecutor General’s Office with a request to initiate a pre-trial investigation and criminal prosecution for engaging in illegal economic, commercial, financial or professional activity.
“We warn people one more time that the activity of this person, whose bad reputation is already known from the past , as well as the persons abetting him may pose a real threat to safety of the money of those people who believe their temptations. Financial pyramids do not create any value, therefore, the end of them all is the same – large losses for the people who got tempted by fabulous profits”, warned Mr. Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania.
According to him, everybody needs to handle their savings responsibly and cautiously. It is necessary to be vigilant and careful every time we decide to whom to entrust our money and which financial product to choose. First of all – entrust your savings only to legally operating market participants that have valid licenses. Second – invest your money responsibly instead of gambling, assess the earnings promised and the risk assumed.
In order to prevent the spread of the threatening and increasingly more active virus of a financial pyramid, a concentrated response of all public institutions is necessary. The Bank of Lithuania coordinates possible actions to protect the country's residents with the Prosecutor General’s Office, the Competition Service and the State Consumer Rights Protection Service.
The Bank of Lithuania also addressed the main associations of the country’s advertising agencies with a request to warn their members about the possibly illegal activity of the system “MMM-2011” in Lithuania and to ensure that the said activity is not advertised using the services provided by Lithuania’s advertising agencies.
After warnings provided slightly earlier, the aggressive advertising of the system “MMM-2011” on the ACM screen above the Opera and Ballet Theatre in Vilnius was removed. However, other forms of advertising were launched.
“We expect responsible attitude of public institutions, advertising market participants and the media towards a dangerous potentially criminal activity that may have severe consequences to a lot of people”, said Mr. Vasiliauskas.
The Bank of Lithuania had already sent warnings to take precautions to the International Organization of Securities Commissions (IOSCO) and the European Securities and Markets Authority (ESMA).