I wonder if they left off the "PARADIGM"
Warning about dubious off-shore investments
We have issued a strong warning about investing in foreign investments recommended by unlicensed people from overseas.
Stephen Howell, ASIC's WA Director of Enforcement, says representatives claiming to be from the Philippines office of Switzerland-based securities house, Knowle Sachs & Company Inc, have been telephoning Australian residents offering unsolicited investment recommendations.
"This unsolicited investment advice should be ignored," Mr Howell advises. "If the deal is so good why are they calling to offer it to Australian residents with whom they have no pre-existing relationship?"
The offers usually relate to overseas companies, unknown to Australian residents, and typically suggest the adviser has inside knowledge of a matter that will guarantee the share price will rise, and that the gain will be tax free.
The telephone callers have been offering Australians residents investments either Advanced Technologies Inc or CRA-Z Products and claim that both companies are listed in the United States.
In some cases residents have agreed to purchase shares over the telephone due to persistence of the representative, while others have agreed to have brochures sent them and have received an investment package.
The package comprises a brochure relating to the company, other documents and confirmation of order and an invoice billing the resident thousands of dollars for shares purchased on their behalf by a Knowle Sachs & Co representative.
The package does not comply with the prospectus provisions of the Corporations Law which are designed to ensure that investors receive all relevant information about a prospective investment.
The Law also requires advisers to be licensed and that their recommendations be tailored to suit the specific need of individuals. If the advice is of a general nature, advisers must warn investors that this is the case as the advice may not be suitable for their particular investment needs. Advisers are also required to disclose any potential conflicts of interest, like commission-based incentives.
Potential investors should be extremely cautious about investment offers in companies they know little about and cannot get any further information on.
In particular, unlisted shares traded over the counter (not on a recognised stock exchange), do not allow investors to objectively verify share price or market depth.
"This means you have no idea about the relative value of shares. Australians considering investing in securities should invest through suitably licensed advisers who comply with the Corporations Law.
"These rules are designed to protect the investors and ensure a fair market," Mr Howell says.
Other ASIC alerts about investing overseas
Updated: 22/09/2000 |
