Resolution no. 23222

Prohibition, pursuant to Article 99, paragraph 1, letter c) of Legislative Decree no. 58/1998, of the offer to the public of financial products concerning the "Investment Plans" called "Standard", "Premio (Premium)" and "Platino (Platinum)" carried out by the so-called "Shellinvestments" also via the website https://shellinvestment.net

LA COMMISSIONE NAZIONALE PER LE SOCIETÀ E LA BORSA
[The National Commission for Companies and the Stock Exchange]

HAVING REGARD to Law no. 216 of 7 June 1974, as subsequently amended and supplemented;

HAVING REGARD to Legislative Decree no. 58 of 24 February 1998 ("Consolidated Law on Finance"), as subsequently amended and supplemented;

HAVING ESTABLISHED that Consob's supervisory activity ascertained the presence of the website https://shellinvestment.net, which was active and registered anonymously, with the relative content available in Italian through a machine translation mechanism incorporated into the website https://shellinvestment.net;

HAVING NOTED that three "Investment Plans" called "Standard", "Premium" and "Platinum" were promoted via the website https://shellinvestment.net;

HAVING ESTABLISHED that, based on the information on the website https://shellinvestment.net, the "Investment Plans" were distinguished from each other by the minimum and maximum deposit allowed as well as by the percentages of "gain" that subscribers could have been ensured of on a daily basis, as follows:

- "Standard, minimum $50, maximum $4,999, daily interest of 2.3% for 6 days";

- "Premium, minimum $5,000, maximum $9,999, daily interest of 4.5% for 6 days";

- "Platinum, minimum $10,000, unlimited maximum, 6% daily interest for 6 days"

HAVING ESTABLISHED that, the series of elements on the website https://shellinvestment.net, made it possible to ascertain the steps that each user would be required to perform to subscribe to one or more of the "investment plans". Specifically: the user would need to register on the site and make an initial deposit; the funds thus conferred would then have been "managed" by "Shellinvestments" (the site read: "we do all the hard work so that you can earn") in activities not actually detailed on the sitehttps://shellinvestment.net; finally, the "earnings" from the activities generating the profits would have been credited to each user's account and could have been withdrawn by customers;

HAVING NOTED that on the home page of the https://shellinvestment.netwebsite, the "minimum" and "maximum" amounts that users could have paid to subscribe to one or more "investment plans" was expressed in dollars and that in the section of the same website https://shellinvestment.net dedicated to "FAQs", it was possible for users to have purchased one or more "investment plans" also using cryptocurrencies (in particular, "Shellinvestments"would have accepted "Bitcoin, Ethereum, Litecoin, Bitcoin Cash and other cryptocurrencies (the list will be updated)");

HAVING ESTABLISHED that, after registering with the website https://shellinvestment.net through a procedure freely available also to Italian users, it was possible to access the personal area which contained features for purchasing the "investment plans";

HAVING ESTABLISHED that the so-called "Shellinvestment", mentioned on the website https://shellinvestment.net, has not answered the requests for information made by Consob and sent to the email address indicated on the same website https://shellinvestment.net;

HAVING ESTABLISHED that the transaction was presented as an investment opportunity;

HAVING REGARD TO the fact that, according to the definition under Art. 1, para. 1, letter t) of Consolidated Law on Finance a "public offering [of financial products]" must be understood to mean "any invitation to offer or promotional message, in whatsoever form addressed to the public, whose objective is the sale or subscription of financial products including the allocation through authorised people";

WHEREAS the elements of the public offer relevant for the purposes of this provision can be summarised as follows:

a) the fact that the activity involves a specific or several specific "financial products", a category that includes - pursuant to Article 1, paragraph 1, letter u), of the Consolidated Law on Finance, both the typified features of "financial instruments" and "every other form of investment of a financial nature";

b) the existence of a communication intended to persuade investors to purchase or subscribe to these financial products and a description in uniform and standardised terms of the main details thereof;

c) the fact that the offering in question is directed towards Italian residents;

HAVING ESTABLISHED that the contract proposal regarding such "Investment Plans" conveyed through the website https://shellinvestment.net is described in such a way as to categorise the plans as financial products, i.e. a "form of investment of a financial nature";

WHEREAS, in this specific case, according to Consob's consolidated approach, the elements that qualify the notion of "investment of a financial nature" - other than the financial instrument - are present, given the coexistence: (i) of an investment of capital; (ii) of a promise/expectation of return of a financial nature; (iii) of the assumption of a risk connected to the investment of capital;

WHEREAS the structure of the transaction in question requires that a) the participant uses their capital to subscribe to one or more "Investment Plans" among those indicated on the website https://shellinvestment.net; b) by virtue of the aforesaid subscription, investors were offered a variable return in relation to an "Investment Plan" subscribed to by each user without the users themselves required to carry out any further activity (on the site https://shellinvestment.net, it read "we do all the hard work so that you can earn"); c) the consequent assumption of a risk associated with the use of the capital paid in;

HAVING ESTABLISHED, therefore, that the aforementioned return is allegedly paid for the use of the investor's capital;

WHEREAS, consequently, the legal reason for the contracts offered via the website https://shellinvestment.net can be deemed to be the production of a financial return as consideration for the use of capital paid-in by the recipient of such return (who, therefore, contributes their own money with an expectation of profit, namely, an increase in the cash invested, the contract thus having an "investment purpose");

CONSIDERING, therefore, that, with regard to the existence of the requirement referred to under letter a), namely, that the offer in question may be classified as a "financial product", the contract proposals made, including through the website https://shellinvestment.net qualify as an "investment of a financial nature";

HAVING ESTABLISHED that the above informative content on the website https://shellinvestment.net provides a consistent representation of the features of the investment proposals, such as to place retail investors in a position to assess whether or not to join the initiative;

HAVING ESTABLISHED, therefore, that the requirement set out under letter b) is also met;

HAVING ESTABLISHED, moreover, that there are unequivocal elements which suggest that the offer under examination is also aimed at the public resident in Italy, since the contents of the website https://shellinvestment.net were available in Italian through a machine translation mechanism incorporated into the same website https://shellinvestment.netand on the same website https://shellinvestment.net, no mechanisms were found aimed at limiting or excluding registration by users connected to the web from Italy/through Italian IP addresses. In addition, financial losses have been reported related to the initiatives promoted through the website https://shellinvestment.net and a copy of the conversations that took place in Italian was acquired, through an instant messaging application, between Italian investors and parties connected to operations on the website https://shellinvestment.net, where said operators solicit the use of money via the website https://shellinvestment.net;

HAVING ESTABLISHED, therefore, that the requirement set out in letter c) is also met, since the offer in question is aimed at the public resident in Italy;

HAVING ESTABLISHED, therefore, that the activity carried out by the so-called "Shellinvestments" has the features of an offer of financial products to the public, as defined above;

HAVING REGARD TO Article 94-bis of the Consolidated Law on Finance, paragraph 1, which establishes that "parties who intend to make an offer to the public of financial products other than securities and shares or units of open UCITS must publish a prospectus in advance. To this end, an application must be submitted to Consob for approval, with the draft attached. The prospectus cannot be published until it has been approved by Consob pursuant to Article 95, paragraph 1, letter b). [...]".

HAVING ESTABLISHED that, in relation to the described activity, the prospectus intended for publication has not been sent to Consob;

HAVING ESTABLISHED likewise the non-existence of any of the exemptions - provided by the combined provisions of Article 100 of the Consolidated Law on Finance and Article 34-ter of Consob Regulation no. 11971/1999 ("Issuers' Regulation") - from enforcement of the rules on solicitation of public savings set forth by Articles 93 bis et seq. of the Consolidated Law on Finance;

HAVING REGARD to resolution no. 23096 of 2 May 2024, whereby, pursuant to article 99, paragraph 1, letter b), of the Consolidated Law on Finance, Consob implemented the precautionary suspension measure, for a period of ninety days, of the offer to citizens residing in Italy involving an investment of a financial nature made also through the website https://shellinvestment.net;

WHEREAS, the so called "Shellinvestments" has sent no objections in response to the facts on which the suspension measure is based;

WHEREAS, therefore, in the light of the investigation outlined above and in the absence of any evidence to suggest a situation other than that outlined in the aforementioned suspension measure, the circumstances de facto and de jure established in the suspension measure are considered to have been ascertained;

CONSIDERING, therefore, that it has been ascertained that - according to the methods described above, noted at the time of adoption of the said suspension measure - an offer to the public has been made of products, sub-category "investment of a financial nature" in breach of the above law;

HAVING REGARD to Art. 99, paragraph 1, letter c) of the Consolidated Law on Finance, pursuant to which Consob may "prohibit the public offering if a violation is confirmed of the provisions of this Chapter or of the related implementation measures or if there are well-founded suspicions that such provisions or measures might be breached...";

RESOLVES:

To prohibit the offer to the public resident in Italy regarding the "Investment Plans" known as "Standard", "Premio (Premium)" and "Platino (Platinum)" carried out by the so-called "Shellinvestments" including via the website https://shellinvestment.net.

This Resolution shall be brought to the attention of the concerned parties and published in the Consob Bulletin.

This measure may be appealed before the Regional Administrative Court of Lazio within 60 days of the date of service.

25 July 2024

THE CHAIRMAN
Paolo Savona