Dozens of people have fallen victim in two fraud cases linked to Freedom Holding Corp., owned by Russian-born businessman Timur Turlov.
“I represent the interests and consult the victims on investment deals concluded with the firm ’Freedom Broker Service’ (FFIN Brokerage Services Inc. – KazTAG), who have suffered and lost almost all their money. As of today, two criminal cases have been opened in the Department of Economic Investigations (KazTAG) of Astana. Initially, they were opened by the police, and then we succeeded in transferring them to the Economic Investigations Department, and the second case was opened—there are about 30 victims—in the North Kazakhstan region.
What’s the situation? People were invited to the offices of ’Freedom Finance.’ Employees of ’Freedom Finance’ worked with them, but the contracts were made in the name of ’Freedom Broker Service,’ which is registered in the state of Belize. Naturally, elderly people were not informed about this. Neither ’Freedom Finance’ nor FFIN Brokerage Services, according to the information we received, have a license to access the US stock exchange. Therefore, they had no right to conduct any transactions for acquiring stocks for these people,” said Svetlana Oralbayeva, a lawyer of the North Kazakhstan Bar Association, to KazTAG’s editorial team on Thursday.
The victims provided KazTAG with a copy of the response from the US Securities and Exchange Commission (SEC) to their inquiry, which stated that ’Freedom Finance’ is not registered with either the SEC or the US Financial Industry Regulatory Authority (FINRA).
“None of the investors with whom ’Freedom Finance’ brokers signed contracts made a profit. On the contrary, every single one of them lost their money,” explained the lawyer.
She also commented on KazTAG’s publication regarding the investigation into ’Freedom Finance’ due to possible fraud by Executive Director Vitaly Svetov, as well as the opened criminal case. In particular, the KazTAG article cited insider information, which suggested that ’Freedom Finance’ itself allegedly initiated an investigation and the subsequent dismissal of Svetov in August 2024.
“AFM confirmed the registration of one criminal case against Svetov, while at the same time remaining silent about the fact that a similar case was opened in Astana. The information that an internal investigation was initiated against Svetov, who held the position of executive director, and the results of the investigation established that Svetov abused his position and trust of the clients. Firstly, this information is unreliable. Why? Because the criminal cases were not initiated based on the internal investigation of ’Freedom Finance.’ ’Freedom Finance’ in every way provides information that they are not responsible for the actions of these brokers, do not answer for the actions of ’Freedom Broker Service,’ and the fact itself is that allegedly Svetov acted beyond the obligations assigned to him. Allegedly, they didn’t know, and allegedly they themselves forwarded the materials to law enforcement. This is absolutely not true because following this investigation, statements signed by Mr. Sergey Nikolaevich Lukyanov, Chairman of the Board, were sent to the police to bring these people, all our injured clients, to criminal responsibility, allegedly for extortion. And questionnaires with answers were already distributed to the police,” reported the lawyer of the SKO Bar Association.
She revealed how this situation was uncovered.
“When Zhanna Kaparova, one of the victims, a representative of the victims, was invited to the police, she was given a questionnaire with answers, which, naturally, we refused to sign, and there was the name of Svetov. I know Svetov because I am in SKO, I am from SKO myself, and she had a broker Bekov (Temirlan – KazTAG). Therefore, these questions and answers were developed by the employees of ’Freedom Finance.’ After this, we ourselves filed statements about fraudulent actions,” said Oralbayeva.
The victims stated that they had previously filed complaints with the presidential administration, the Prosecutor General’s Office, the Agency for Regulation and Development of the Financial Market, the Financial Monitoring Agency, and the Ministry of Internal Affairs. KazTAG sent appropriate inquiries to all these structures.
According to the information available to KazTAG in mid-March, in August 2024, an internal investigation was initiated in JSC ’Freedom Finance’ regarding Svetov V., who held the position of executive director. According to the information, the investigation established that Svetov abused his position and trust of the clients, engaged in personal property relationships with the clients of the organization, and suggested transferring money not to the company’s accounts, but personally to him, allegedly for more effective investment. According to the information, the funds thus obtained were used not for investing but for Svetov’s personal needs, including paying off his debts. The received information noted that these actions were committed by him independently, without the knowledge of the management.
As noted in the information, based on the investigation in August 2024, Svetov was dismissed for discrediting circumstances. According to the information available to KazTAG, the investigation materials were transferred to law enforcement for potential criminal prosecution. As became known on April 3, the information indicated in this paragraph, which was in KazTAG’s possession, was more likely to originate from ’Freedom Finance’ itself, which might thus create the appearance of investigating the specified facts for accountability to regulatory authorities.
