The New Brunswick Securities Commission (NBSC) has filed a statement of allegations seeking a cease-trade order against Crainshaw International Ltd. and Osbourne Worldwide Limited, both with purported offices in Belize, the commission said Friday.
NBSC staff allege that the companies were engaging in unregistered trading activity. A hearing will be held on 1December 18 to determine the allegations.
“The alleged tactics used on a New Brunswick resident by sales people representing these companies are consistent with those of a boiler-room operation,” said Rick Hancox, executive director of the commission, in a release. “Unfortunately, many individuals have lost money to similar schemes. The sales strategies used can be very convincing.”
Staff allege that a representative of Crainshaw cold-called a N.B. resident during the summer soliciting investments in gold options through an account with Osbourne. In their materials, staff indicate that repeated telephone and email solicitations resulted in the resident opening an account and transferring an initial $3,000 to Osbourne, and then transferring a subsequent $9,700 after being contacted by a second representative of Crainshaw.
“All investment frauds have common red flags that we want New Brunswickers to recognize,” said Hancox. “Sending money off-shore is one of them. Once money is sent off-shore, it becomes difficult to investigate or recover.”
Staff allege that the resident was provided with an online trading account and seemingly legitimate account statements. They further allege that in October, the resident was contacted by Crainshaw and advised that his investment had significantly reduced in value, but that he could recover the funds if he provided additional funds to trade foreign exchange contracts.
At this point, the N.B. resident declined the offer and contacted the commission. He was advised that neither company was registered to solicit investments in N.B.