SFSC issues cease trade on Belize firm
Regulator warns about investment schemes
Tuesday, May 8, 2007
By James Langton
The Saskatchewan Financial Services Commission today issued a temporary cease trade order against a Belize-based firm, Gordon Equity Management Ltd., and its representatives Paul Thomas and Vince Gold, warning investors about investment schemes.
The SFSC says that Gordon Equity Management, based in Belize City, Belize, holds itself out as a company that specializes in assisting small and medium size companies to raise capital and market their securities to the investment community. And, it alleges that Thomas and Gold, acting on behalf of the firm, have contacted residents of Saskatchewan and offered to exchange shares of large companies that trade on stock exchanges inside and outside of Canada for shares of unlisted companies that the Saskatchewan residents already own.
"Thomas and Gold have requested that, as part of the exchange, the investors transfer thousands of dollars to bank accounts outside Canada, including Cyprus and Malaysia, to make up the difference in value of the exchanged shares," it says.
"Neither Gordon Equity Management Ltd. nor these two men have been or are currently registered to trade in securities or act as advisors in Saskatchewan, and have contravened provincial registration requirements," the commission claims. These allegations have not been proven.
"Investors in Euston Capital Corp and Limelight Entertainment Inc. appear to be the target of the latest reported incidents in Saskatchewan. Other securities commissions across Canada report similar incidents related to these two companies as well as others," it says.
The SFSC reports that it has also been made aware that other unregistered companies and their representatives are contacting individuals that were previously victimized by illegal investment opportunities. "They appear to be using or have access to lists that are frequently sold and shared amongst investment fraud and scam artists," it notes. "The suspect companies offer to purchase worthless or low value shares from investors, at what appears to be a substantial profit. As part of the deal, however, investors must also purchase shares in a new investment opportunity. The new investment costs exceed the profit from the sale of the worthless shares. The investor is then directed to send the difference to a bank account outside of Canada."
"The suspect companies are based in foreign countries and funds are forwarded to offshore accounts. In all likelihood, when the money is sent to these foreign jurisdictions, it will disappear," the commission warns. "This type of scheme appears to be a new version of an offshore investment scam combined with a Nigerian Fraud scam, which has victims send upfront money to obtain a reward, which usually does not exist."