The Capital Markets Authority (CMA) has cautioned potential investors against investing through unlicensed and unapproved entities. The regulator issued the cautionary statement at a time when investors in Cytonn, a local investment firm, have raised complaints of not accessing their funds from a high yield return fund within the stipulated time period.

Cytonn Investments created the High Yield Solution (CHYS) in December 2019, with an aim of raising up to Ksh. 30 billion from high net worth investors (HNI).

In a statement, CMA chief executive Wyckliffe Shamiah warned that people who invest in products promoted by unlicensed and unapproved entities risk the losing their investments. “Investors who are affected by investing in unregulated products should report to the Capital Markets Fraud Investigation Unit (CMFIU), which is the Police Unit attached to the Capital Markets Authority,” Shamiah said.

In April, 13 investors filed complaints with CMA against Cytonn for allegedly failing to pay Ksh. 122.8 million upon maturity of funds in one of its pools. The investors claimed that Cytonn had delayed payments of between Ksh. 500,000 and Ksh. 25 million, prompting the regulator to petition the courts to bar Cytonn from putting more money in real estate projects.

“We confirm that Cytonn Investments is not a licensed and approved entity,” the regulator said in a statement.

While Cytonn Asset Managers Limited had appointed Co-operative Bank as the Trustee, the bank resigned in August last year, in undisclosed circumstances.

This is not the first time CMA is warning investors against the product by Cytonn. Last year, the wrangle between the firm and the regulator spilled to court, with the latter obtaining a stay order on September 21.