SEC warns public against same scam in different name

• Names Evolute for allegedly accepting public funds to invest in foreign stock markets 
• Evolute operates by same parties behind two entities previously flagged, Copreus and Gladius

The Securities and Exchange Commission of Sri Lanka (SEC) has issued a public warning against Evolute, alleging that the entity is linked to illegal operators previously associated with investment schemes promoted under the names Copreus and Gladius, and cautioning investors against handing over funds for purported investments in foreign stock markets.

In a social media awareness campaign, the regulator claimed that Evolute represents the latest rebranding of a group that has changed names and locations over time while continuing to solicit investments from the public.

“First it was Copreus, then it became Gladius, and now it has reappeared as Evolute — a new name, a new location, but the same people behind it, simply changing identities over time,” the SEC said.

The Commission warned investors to be cautious of unsolicited telephone calls and promotions offering access to overseas stock market investments, noting that legitimate investment opportunities do not typically rely on cold-calling prospective clients.

The regulator also highlighted Sri Lanka’s financial literacy gap, observing that while the country’s literacy rate exceeds 93%, financial literacy remains around 55%.

“Many can read the offer, but not always the risks hidden within it,” the SEC said.

The warning forms part of the SEC’s broader investor protection initiative aimed at raising awareness of unregulated investment operators and schemes that claim to invest public funds in foreign markets.

The Commission urged the public to verify the regulatory status of any investment provider before committing funds and to exercise caution when confronted with promises of attractive returns or exclusive overseas investment opportunities.

“Stay alert, question everything, and don’t let smooth talkers turn your savings into their profits,” the SEC said, adding that it continues to monitor such activities as part of its public awareness mandate.

The SEC’s mandate is to regulate domestic capital market participants including licenced stock brokers. 

Companies accepting public funds to invest in foreign stock markets ought to be licenced in the jurisdictions they are investing in. However, accepting public funds for investing overseas falls under the jurisdiction of the Central Bank of Sri Lanka (CBSL).

The CID is investigating and CBSL has also been instructed by the Attorney General to look into the matter.

Last December, SEC warned the investing public that “Gladius South Asia” is not licenced by the SEC to operate as a Market Participant within or outside Sri Lanka. 

“The SEC does not regulate, nor does it grant licences for entities to operate in foreign jurisdictions,” a statement issued then by capital markets regulator said. It said that Gladius South Asia, in some instances, informs clients that it is licensed by the Financial Conduct Authority (FCA) in the United Kingdom. However, the FCA has officially confirmed to the SEC that Gladius South Asia is not a registered entity with the FCA. “Please note that in the United Kingdom, all financial services activities must be authorised or registered by the Financial Conduct Authority (FCA),” the SEC added.

Now, the SEC says Gladius is operating under a different name, Evolute, allegedly out of the World Trade Centre.