BGP Litigation attorney Georgy Baganov speaks with about the legality of the actions of LuxStone Invest

"The website refers to deposit accounts – in other words, banking operations that require a license. But the money is received from the 'depositor' under a loan agreement rather than a bank deposit agreement. While technically the execution of a loan agreement does not require a license, such a financial product does raise questions", says Georgy Baganov, an attorney at BGP Litigation.  

The expert also emphasizes that a special permit must be obtained from the regulator to engage in banking operations. The list of such licenses is publicly available. If an entity that calls itself an investment company cannot provide a license for types of activities which require one, then it is probably operating outside the law, which would constitute grounds for contacting law enforcement bodies.

"According to the SPARK database, LuxStone's core business is retail sale of audio and video equipment in specialized shops. As of the date of the company's incorporation (30 September 2010) its charter capital was 10,000 roubles. Everyone makes their own decision as to whether it's advisable to invest under such circumstances or not", says Georgy Baganov".

The full article (in Russian) is available here: "Куда инвест?".