Resolution no. 21003

Prohibition, pursuant to article 99, paragraph 1, letter b) of Legislative Decree no. 58/1998, of the public offering involving the 'FutureAdPro' scheme

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 and subsequent amendments and additions;

HAVING REGARD TO Legislative Decree no. 58 of February 24, 1998 and subsequent amendments and additions (‘Consolidated Law on Finance’);

HAVING FOUND that, following supervision by CONSOB, evidence was acquired of the performance of activity consisting of offering the public, including Italian residents, the opportunity to invest money in the purchase of advertising packages called ‘Adpacks’, with the promise of rather high returns;

HAVING FOUND that the website www.futurenet.club, attributable to B C U Trading LLC with alleged registered address in Dubai, indicates that ‘FutureNet’ offers the best solutions for developing your business. In particular, the homepage of the website reads ‘That's why we have created the first social media platform which connects people engaged in multi-level marketing. FutureNet tools and products offer people globally the possibility to use their online potential optimally’;

HAVING FOUND that, by registering on the website from an Italian IP address, Italian users are able to access certain subsections, including a reserved back-office area, written in Italian, dedicated to the ‘FutureAdPro’ scheme. By means of this reserved area, users can purchase the above mentioned 'advertising packages’ offered by FutureNet. The aforementioned ‘advertising packages’ can be purchased using different payment methods, including bank transfer, upon selection of which the IBAN code of a Polish company called ‘Jax Pay Spzoo’ is shown to users;

HAVING FOUND that this scheme can also be accessed via a specific web page entitled https://www.futurenet-club.com/italiano/futurenet-futurenetadpro/, available in Italian, which sponsors the aforementioned ‘FutureAdPro’ scheme and provides certain details on how it works. In particular, with regard to the return, it reads that in order to ‘start earning’, users must ‘buy at least one advertising package (AdPack) at a cost of $50’ and that ‘by buying advertising packages (AdPack) at a cost of $50 and watching 10 adverts every day,’ users would obtain ‘a % share of total profits generated by the company,’ which can reach up to 0.5% per day;

HAVING FOUND that, in addition to these investments through purchasing AdPacks, users can also receive extra bonuses linked to an affiliation programme;

HAVING FOUND that, upon our request for information - including warning that the activity in question could potentially be classified as the public offering of financial products - no response was provided;

HAVING ESTABLISHED that the structure of the operation is presented as an investment opportunity, as the scheme promoted by FutureNet offers users the possibility to purchase advertising packs to receive periodic returns, related to the company’s profits, conditional upon views on 10 websites but above all proportional to the quantity of Adpacks purchased;

HAVING REGARD to the fact that, according to the definition under art. 1, para. 1, letter t) of the Consolidated Law on Finance, ‘offer of financial products to the public’ must be understood to mean ‘any communication made to people, in any form and by any means, that presents sufficient information about the conditions of the offer and the financial products offered as to render an investor capable of deciding to buy or underwrite such financial products, including placement by means of licensed bodies’;

HAVING CONSIDERED that 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 Art. 1, para. 1, letter u), of the Consolidated Law on Finance, both the typified characteristics 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 one or several specific financial products and, consequently, including at the very least a description of their main characteristics and essential terms and conditions;

c) the representation of the offer in uniform and standardised terms and the consequent impossibility for the individual investor to intervene in the formation of the contractual agreement and on the subsequent use of the money paid;

d) the fact that the offer in question is directed towards Italian residents;

HAVING CONSIDERED that the notion of ‘investment of a financial nature’ implies the coexistence of the following three elements: (i) investment of capital; (ii) the expectation of a financial return; (iii) the assumption of risk connected to the investment of capital;

HAVING CONSIDERED that the structure of the operation in question envisages that (a) subscribers use their own capital to purchase the advertising packages (b) a pre-determined return is promised by virtue of this purchase (c) with the consequent assumption of the risk related to the use of the invested capital;

HAVING FOUND, therefore, that the aforementioned return is paid against the use of investor capital and that the return is correlated to the amount paid to purchase the Adpacks, rather than to the number of views;

HAVING CONSIDERED, therefore, that the reason of the contract in question is attributable to the production of a financial return as consideration for the use of capital entrusted by the recipient of this return, who, therefore, provides his/her own money with the expectation of earning a profit, namely the growth of the cash invested;

HAVING CONSIDERED therefore, that, with regard to the existence of the requirement referred to in letter a), i.e., the fact that the content of the offering can be classified as a ‘financial product’, the investment under examination, based on that explained above, appears to have the characteristics of ‘an investment of a financial nature’;

HAVING FOUND that the ‘FutureAdPro’ scheme was promoted in standardised and uniform terms, through a presentation that illustrates the characteristics of the investment schemes in such a way as to render investors capable of deciding whether or not to subscribe to it;

HAVING FOUND therefore, that the requirements set out in letters b) and c) are met;

HAVING ESTABLISHED, moreover, that there are clear elements about the fact that the offer in question was directed at the Italian public since the content published on the website www.futurenet.club are partially available also in Italian and defined on the web page entitled https://www.futurenet-club.com/italiano/futurenet-futurenetadpro/ also drawn up in Italian;

HAVING ESTABLISHED, furthermore, that there is also a multi-level marketing system that guarantees affiliates who recruit new subjects, to be entered into the distribution chain at a lower level, commissions on sales made by these new recruits;

HAVING CONSIDERED, therefore, the existence of the requirement set out in letter d), given that the offer in question is also directed towards the Italian public;

HAVING CONSIDERED, therefore, that the scheme "FutureAdPro" put in place through the website www.futurenet.club and the web page https://www.futurenet - club.com/italiano/futurenet- futurenetadpro/ aimed at promoting the purchase of advertising packs has the characteristics of a public offer of financial products as defined above;

HAVING REGARD to the fact that Art. 94, section 1, of the Consolidated Law on Finance establishes as follows: 'Anyone intending to make an offer to the public must publish a prospectus in advance. To this end, for offers concerning EU financial instruments for which Italy is the Member State of origin and for offers of financial products other than EU financial instruments, prior notification must be sent to CONSOB including the prospectus intended for publication. The prospectus cannot be published until it is approved by CONSOB’.

HAVING ESTABLISHED that, in relation to the activity described, neither prior notification nor the information prospectus intended for publication were sent to CONSOB;

HAVING ESTABLISHED that the offer in question, on the basis of current evidence, does not qualify for any of the exemptions - contemplated by the combined provisions of Art. 100 of Legislative Decree no. 58/98 and Art. 34-ter of CONSOB Regulation no. 11971/98 - from enforcement of the rules on ‘solicitation of public savings’;

HAVING REGARD TO Resolution no. 20901 of November 14, 2018, with which CONSOB, pursuant to Art. 99, paragraph 1(b) of Legislative Decree 58/98 adopted measures for a ninety day precautionary suspension of the offer to the Italian public of investments of a financial nature performed via the website www.futurenet.club and the web page https://www.futurenet-club.com/italiano/futurenet-futurenetadpro/;

HAVING CONSIDERED, therefore, that, 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;

HAVING FOUND, therefore, that the public offering of investments of a financial nature in infringement of the regulations cited above has been established, according to the methods described above;

HAVING REGARD TO art. 99, para. 1, letter d) of Legislative Decree no. 58/98, on the basis of which CONSOB may ‘prohibit the public offering if violation of the provisions or regulations referred to under paragraphs a) or b) are confirmed’;

HAVING CONSIDERED that, given the above-mentioned circumstances, the provision identified above must be adopted with urgency;

HEREBY RESOLVES:

To prohibit the public offer to Italian residents called ‘FutureAdPro’ involving the purchase of advertising packages, implemented by B C U Trading LLC through the website www.futurenet.club and the specific page https://www.futurenet-club.com/italiano/futurenet-futurenetadpro/.

This Resolution shall be brought to the attention of those whom it concerns and will be 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.

July 17, 2019

THE CHAIRMAN
Paolo Savona