TELECOM Digest OnLine - Sorted: Beware of Phantom Stock Regulators on Net, Officials Warn

Beware of Phantom Stock Regulators on Net, Officials Warn

Reuters News Wire (
Thu, 28 Jul 2005 22:22:29 -0500

Con artists are setting up Web sites for fake U.S. regulatory agencies
to lure stock investors, many from overseas, into fraudulent
transactions, officials from New Jersey to Montana warned on Thursday.

These "phantom regulators" -- with names like the International
Compliance Commission and the Securities Protection Agency -- have
been brought to the attention of actual regulators, the officials

"The U.S. securities markets are known around the world for being
among the safest ... Con artists are trying to cash in on our good
name abroad to lure unsuspecting investors into risky penny stocks and
advance fee schemes," said New Jersey Securities Bureau Chief Franklin

For instance, investors in Britain, Australia and New Zealand were
targeted by a company called Royal Acquisitions Inc., which offered to
buy shares of worthless stock, but asked for an upfront fee, officials

To make their pitch more convincing, Royal Acquisitions referred
investors to a Web site for the "International Securities Regulatory
Commission," said regulators in Montana, where the company and the
commission were purportedly based.

There is no Royal Acquisitions or International Securities Regulatory
Commission doing business in Montana, the Montana Securities
Department said.

"We continue to get e-mails regularly from investors around the world
asking about the legitimacy of Royal Acquisitions and the
International Securities Regulatory Commission," said Karen Powell,
deputy Montana securities commissioner.

This month the Missouri securities commissioner issued an order
against the "Securities Compliance Department," which claims to be a
regulator based in Kansas City.

Missouri officials said the case involved an Australian woman who was
bilked out of $121,000 by a group called Century Group Mergers and
Acquisitions. The woman said a man telephoned her claiming to be from
the Securities Compliance Department and asked her to send more money.

In Massachusetts, state regulators said they have filed a complaint
against RJL International Ltd., after receiving numerous complaints
from overseas investors.

RJL agents were contacting investors and offering to buy their shares
for up to 200 times the market price, but asking for an advance fee,
state officials said.

"At least one investor submitted $19,000 to RJL, after which all
communications with the firm ceased," said the Massachusetts
Securities Division in a statement.

Rather than using a Web site, RJL encouraged reluctant investors to
telephone the "International Public Shareholder Protection Service,"
an entity that does not exist, officials said.

Copyright 2005 Reuters Limited.

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