Resolution no. 21019

Prohibition, pursuant to art. 99, paragraph 1, letter d) of Legislative Decree no. 58/1998, of the offer to the public resident in Italy of 'investment plans', performed by Tessline Limited, including through the website www.tessline.com

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 June 7, 1974, and subsequent amendments and additions;

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

HAVING FOUND that, following supervision by CONSOB, evidence was acquired of the performance of activity, performed via the website www.tessline.com, available in Italian, consisting of offering the public, including Italian residents, the opportunity to invest money in the purchase of short- and long-term ‘investment plans’, with the promise of high returns;

HAVING FOUND that the website www.tessline.com presents the company Tessline Limited, with alleged registered address in Ireland, as ‘undisputed leader in global markets of online investments and asset management’, which offers its customers investment opportunities with the prospect of profit commensurate with the paid-up capital;

HAVING FOUND that the ‘Investors’ section of the aforementioned website offered various investment plans called ‘Loyal’, ‘Increase’, ‘Professional’, ‘Prosperity’ ‘Luxury’, ‘Growing’ and ‘VIP’;

HAVING FOUND that, for example, with reference to the ‘Loyal’ investment plan, which requires client investment of between 50 and 2,500 dollars, the website stated that ‘This plan is aimed at daily profit and is suitable for new company clients.’ Clients who choose this plan will earn 1.6% every day of the week. This investment plan works for 30 working days. The total profitability at maturity is 48%’;

HAVING FOUND, furthermore, that, with reference to the ‘Luxury’ investment plan, which required client investment of between 15,000 and 150,000 dollars, the website indicated that ‘Clients who choose this plan will earn 2.4% per day. This investment plan works for 55 working days. The total profitability at maturity is 132%’;

HAVING FOUND, furthermore, that the website offered additional investment plans that bear a name similar to those shown above (with the addition of the symbol ‘+’), with variable connected rates of return and presented as particularly profitable.

HAVING FOUND that the website indicates various so-called ‘referral’ programmes, that enable the generation of additional bonuses. In fact, there were seven foreseen levels of additional remuneration, depending on the number of new subscribers recruited directly and indirectly;

HAVING FOUND that the company employed Italian nationals to promote the scheme amongst the Italian public through public presentations aimed in part to offer support to Italian clients who wished to subscribe to the scheme;

HAVING CONSIDERED that no response was provided to CONSOB’s request for information - including warning that the activity in question could potentially be classified as the public offering of financial services;

HAVING FOUND that he structure of the operation is presented as an investment opportunity;

HAVING REGARD TO the fact that, according to the provisions of art. 1, par. 1, letter t) of Legislative Decree no. 58/ 1998, the ‘public offer of financial products" shall be understood to mean ‘any communication addressed to persons, in any form and with any means whatsoever, that provides sufficient information on the terms of the offer and the financial products offered so as to render investors capable of deciding whether to purchase or subscribe to such financial products, including placement through authorised entities’;

HAVING CONSIDERED that the elements constituting the offering to the public can be summed up as follows:

a) the fact that the activity concerns ‘financial products’, a category that includes - pursuant to art. 1, par. 1, letter u) of Leg. Decree no. 58/1998 - both the ‘typified’ figures of ‘financial instruments’ and ‘any other form of investment of a financial nature’;

b) the existence of communication intended to persuade investors to purchase or subscribe to these financial products and, consequently, including at the very least a description of their main characteristics;

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) the investment of capital; (ii) the expectation of a return of a financial nature; (iii) the assumption of risk directly connected to or related to the investment of capital;

HAVING CONSIDERED that the structure of the transaction in questionrequires that (a) subscribers use their own capital to purchase ‘investment plans’ (b) in order to obtain a predefined return expressed in percentage terms and calculated on the basis of the capital contributed by the investor (c) with the consequent assumption of risk related to the investment of the entrusted capital;

HAVING FOUND, therefore, that the above-mentioned return is paid by Tessline Limited against the investment of the investor’s capital;

HAVING CONSIDERED, therefore, that the reason for the trading proposal can be attributed to the production of a financial return consisting of consideration of the investment of capital entrusted by the recipients of this return, who, therefore, invest their own money with the expectation of profit, namely an increase in the liquidity invested;

HAVING FOUND, 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 offered by Tessline Limited, based on the foregoing, appears to qualify as ‘an investment of a financial nature’;

HAVING FOUND, furthermore, that the website displays information describing the characteristics of the investment scheme in such a way as to render the investor capable of deciding whether or not to subscribe to it;

HAVING ESTABLISHED that the website www.tessline.com promotes the scheme using standardised and uniform terms, with no possibility for the individual investor to play any part in defining the contract;

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

HAVING FOUND, furthermore, that the offer in question is directed towards the Italian public, insofar as the website www.tessline.com is also available in Italian;

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

HAVING FOUND, furthermore, that there is also a so-called. ‘referral’ programme with guarantees of additional bonuses for affiliates who recruit new subscribers to the distribution chain at a lower level;

HAVING ESTABLISHED, therefore, that the activity implemented by Tessline Limited, aimed at promoting the ‘investment plans’ described on the aforementioned website, has the characteristics of the public offering of financial products as defined above;

HAVING CONSIDERED art. 94, par. 1 of Legislative Decree no. 58/1998, pursuant to which ‘Anyone intending to make an offer to the public must publish a prospectus in advance. To this end, for offers concerning Community financial instruments for which Italy is the Member State of origin and for offers of financial products other than Community 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 FOUND that, in relation to the activity implemented by Tessline Limited, neither prior notification nor the information prospectus intended for publication were sent to CONSOB;

HAVING FOUND 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. 58/1998 and art. 34-ter of CONSOB Regulation no. 11971/1998 - from enforcement of the rules on ‘solicitation of public savings’;

HAVING REGARD TO Resolution no. 20948 of May 29, 2018, with which CONSOB, pursuant to art. 99, paragraph 1, letter 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 www.tessline.com website;

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 confirmed;

HAVING ESTABLISHED, 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 offering of investments of a financial nature to the public resident in Italy promoted by Tessline Limited, including through the www.tessline.com website.

This Resolution shall be brought to the attention of those concerned 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.

July 31, 2019

THE CHAIRMAN
Paolo Savona