The Financial Supervisory Authority of Norway has published a thematic inspection report on Folkeinvest AS, concluding that the firm did not carry out satisfactory quality assurance of issuer budgets for certain investment offers and that risk descriptions in selected offers and on its website were not sufficiently balanced, clear or prominent to meet investor protection requirements under the Securities Trading Act. The report also reviews Folkeinvest’s handling of valuation processes for certain offers and notes that the firm has followed up the supervisory remarks. The inspection covered Folkeinvest’s checks of issuer information on financial forecasts, valuations and risk in a sample of placement mandates on its platform for equity issues in small, unlisted early-stage companies. On budgets, the supervisor highlighted two placements where projected revenues rose sharply from one year to the next, including from NOK 5 million to NOK 49.7 million and from NOK 0.4 million to NOK 9.3 million, and concluded that the firm should have challenged optimistic assumptions more and required further adjustments before presenting the figures to investors, noting that actual operating revenues later proved materially lower. On valuations, it questioned whether the documentation demonstrated sufficiently robust and well-documented bases for subscription prices in two placements, while acknowledging that Folkeinvest’s staged process with minimum pre-subscription thresholds in a validation phase and further thresholds before opening offers to all platform investors can, to a large extent, help validate the issue price, and still expecting clear documentation of valuation assumptions for potential investors. The report builds on a preliminary report from May 2025 and the company’s board response from June 2025, and records that measures have been implemented or decided to strengthen budget quality assurance, valuation controls and the accessibility and prominence of risk information, including on the firm’s homepage.
Norwegian Finanstilsynet 2025-08-20
Financial Supervisory Authority of Norway finds Folkeinvest fell short on issuer budget checks and investor risk disclosures
The Financial Supervisory Authority of Norway's report on Folkeinvest AS highlighted deficiencies in quality assurance of issuer budgets and risk descriptions, failing investor protection standards under the Securities Trading Act. It criticized overly optimistic revenue projections and insufficiently documented subscription price bases. Folkeinvest has since improved budget quality assurance, valuation controls, and risk information accessibility.