Thursday 23 November 2006 LAWFUEL – Law News Network – The Australian Securities and Investments Commission (ASIC) has obtained orders in the Federal Court of Australia freezing bank accounts containing over $3.9 million of funds believed to have been fraudulently obtained from Australian investors. As a result of investigations during the past week, ASIC is concerned these funds are the result of an international boiler-room or cold calling scam with connections to the United States, Malaysia and Hong Kong.
Known as HPR Commodities, Capital Marketing Services and Vitol Capital Management, unsuspecting Australians are pressured into purchasing heating oil and other commodity options which are purported to be traded on the non-existent New York Petroleum Option Exchange (NYPOE) or the non-existent International Energy Exchange (INTENX). Last Friday, the Federal Court in Melbourne made interim freezing orders upon ASIC’s urgent application.
At Tuesday’s hearing, Justice Ray Finkelstein extended the orders to preserve those funds and enable ASIC to continue its investigations. Action against this cold-calling operation has prompted ASIC to reiterate warnings about scammers posing as overseas stockbrokers and investment managers. ASIC is warning Australians not to get caught up in the scam and warning those already involved, not to send any further money overseas. ‘These types of scams are particularly concerning as they target unsuspecting investors and provide an elaborate trap for siphoning money into allegedly legitimate investments. HPR Commodities, Capital Marketing Services and Vitol Capital Management are not registered with ASIC, and none are authorised to provide financial services in Australia,’ ASIC’s Executive Director of Enforcement, Ms Jan Redfern said.
‘Australians are able to purchase overseas financial products through many Australian-based financial service providers who are licensed by ASIC. This gives investors the protection of Australian laws if things go wrong’, Ms Redfern said. ASIC believes that the scam is a continuation of one identified by the US Commodity Futures Trading Commission (US CFTC) earlier this year involving fictitious entities, York Commodities and American Energy Exchange (AMENX). Significant features of the scam are: • the promoters are adopting the company names of legitimate companies who are licensed to provide financial services in the USA, but not in Australia; • the scam is supported by sophisticated internet technology including a website which purports to provide investors with real-time information in relation to their trading;
• victims are initially cold called by a person purporting to survey their interest in investing generally. A few days later victims are contacted by a person purporting to be calling on behalf of licensed New York broker in relation to heating oil or other commodity options trading on NYPOE or INTENX; • victims are lured with promises of up to 300 per cent returns in just 15 days and then subject to intense pressure in order to induce them to hand over their money; and • when a person falls victim a first time, they are often called back and encouraged to invest in a more sophisticated trading strategy which requires more money. ASIC’s enquiries in relation to HPR Commodities, Capital Marketing Services and Vitol Capital Management are continuing. Background Cold calling is a sales call or offer that is received out of the blue. These scams usually involve overseas organisations claiming to be large brokers or investment managers offering Australian investors shares in offshore companies or investment schemes that trade in foreign markets. The best protection against these scams is to hang up immediately.
A register of licensed financial service providers is available from ASIC’s consumer website www.fido.gov.au, or by calling ASIC’s Infoline on 1300 300 630. Complaints regarding HPR Commodities, Capital Marketing Services, Vitol Capital Management or any other investment scam may be lodged with ASIC via our website at www.asic.gov.au or by writing to any of our capital city offices across Australia at: Manager National Assessment & Action ASIC GPO Box 9827 Melbourne VIC 3001 Details of the court action taken by the US CFTC can be found on their website, www.cftc.gov. For further information contact: Jan Redfern Executive Director, Enforcement Telephone: 02 9911 2191 Mobile: 0411 119 210 Danielle Huck ASIC Media Unit Telephone: 03 9280 3407 Mobile: 0417 540 769