Securities regulator alleges that purported Chicago-based investment firm committed fraud

VANCOUVER, Aug. 13, 2013 /CNW/ - The Executive Director of the British Columbia Securities Commission has issued a notice of hearing alleging that a purported Chicago-based investment firm committed fraud and traded securities without being registered.

The notice alleges that during the summer of 2012, representatives from Strategic Global Investments (SGI) cold-called three B.C. residents and convinced them to invest in gold options. SGI claims to be in the business of foreign exchange and commodities trading. The company has never been registered to trade securities in B.C.

BCSC staff contends that three B.C. residents lost a total of $80,000 as a result of their investments with SGI. SGI sent investors instructions on how to wire cash to the company's bank account in Costa Rica. Investors followed the instructions and sent SGI their money. Representatives tried to persuade investors to send additional funds by telling them that their initial purchases had earned huge returns.  One investor was convinced to send a further $58,000 to SGI.

Through its website, SGI made the following claims:

  • That it trades commodities and foreign exchange
  • That it has been doing business since 1998 with clients in over 70 countries
  • That it has a head office in Chicago
  • That investors are in control of their money at all times

In reality:

  • SGI's website was not created until June, 2012
  • SGI was not registered with the National Futures Association, the Commodities Futures Trading Association, or the British Columbia Securities Commission
  • SGI's claimed head office belongs to a Virtual Office Company that never leased it to SGI

All three investors tried to get their money back from SGI. When they did call back, the representatives supplied various excuses for not delivering the proceeds, including that the investor owed U.S. taxes or that SGI was merging with another company.  SGI's website is no longer in service.

To date, not a single investor has recovered any money from SGI.

BCSC staff contends that by making false claims on its website and making false statements to investors, SGI perpetrated a fraud. Additionally, by soliciting trades without being registered, SGI breached securities laws regarding registration requirements.

These allegations have not been proven. Counsel for the Executive Director will apply to set dates for a hearing into the allegations before a panel of commissioners on September 3, 2013 at 9:00am.

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. You may view the notice of hearing on our website www.bcsc.bc.ca by typing Strategic Global Investments, SGI Traders SA, or 2013 BCSECCOM 266 in the search box. Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website. Please visit the Canadian Securities Administrators' Disciplined Persons List for information relating to persons disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA). For media inquiries, please contact Richard Gilhooley, media relations, 604-899-6713. For public inquiries, please call 604 899 6854 or 1 800 373 6393 (toll free). Learn how to protect yourself and become a more informed investor at www.investright.org

SOURCE British Columbia Securities Commission



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