Securities regulators in Saskatchewan and New Brunswick have issued temporary cease trade orders against firms known as Saxon Financial Services and Saxon Consultants. Neither firm is connected with the well-known mutual fund company, Saxon Financial Inc.

The Saskatchewan Financial Services Commission issued a temporary cease trade order against Saxon Consultants, Ltd., also known as “Saxon Financial Services,” and its representatives, Sean Wilson, Todd Young and Jack Sinni. The order includes Merchant Capital Markets S.A., also known as “Merchant Capital Markets” and “MerchantMarx”, and its sole director Richard Clifford.

The order directs these entities to cease trading and advising in securities. It also removes their right to use exemptions under Saskatchewan securities laws.

The SFSC says that an investigation by its enforcement branch uncovered evidence that the respondents were aggressively soliciting the sale of gasoline and currency options to Saskatchewan residents without being registered. These allegations have not been proven.

“These companies make aggressive telephone solicitations usually by cold calling, followed by email canvassing of potential investors,” enforcement branch head Ed Rodonets said. “The representatives offer very high rates of return on investments and use high pressure tactics. It seems that these solicitations are being made across the country, but Saskatchewan residents are definitely being targeted. We are working closely with securities regulators in other provinces, and expect that they will take similar action.”

The SFSC also says that Saxon and MerchantMarx also have connections with the following companies:
Wynnwood Mercantile, Arial Trading LLC, International Monetary Services, Trend Commodities, and Meisner Inc.

Similarly, the New Brunswick Securities Commission has issued a temporary cease-trade order against Saxon Financial Services, Saxon Consultants, Merchant, Wilson, Young, and two other individuals, Justin Praamsma, and Conrad Praamsma. The NBSC’s order directs these persons and entities, as well as their officers, directors, employees and/or agents, to cease trading in all securities.

The temporary order, which is effective immediately, was issued by the commission following a hearing held today. The commission alleges that an investigation has revealed that the respondents were not registered with the commission, yet were aggressively soliciting New Brunswickers with the sale of securities which included gasoline and foreign exchange currency options.

It says that Saxon Financial operates out of Atlanta, and Saxon Consultants appears to be based in the British Virgin Islands. The individuals named are sales staff for these entities apparently operating out of Atlanta, it says.

“Indications to date are that Saxon has successfully solicited dozens of Canadian clients who have invested hundreds of thousands of dollars. The scheme appears to target Canadians and Europeans, specifically excluding American clients. The approach uses a direct telemarketing approach, referring potential clients to a website known as saxonfx.com. Salespersons indicate the potential of double or triple digit returns in a short period of time,” the commission says. It notes that Merchant Capital Markets S.A. presents itself as a clearing house operating out of Geneva and investors are instructed to wire funds to its account in Frankfurt.

The NBSC says it issues temporary cease-trade orders where there is the potential of immediate public harm. A further hearing will be held July 27 to determine if the temporary cease-trade order should be made permanent.

“This particular activity seems to be a complex, but slick Internet-based scheme which uses persistent telephone solicitation,” said Rick Hancox, executive director of the NBSC. “They offer very large rates of return and use high pressure tactics. It appears that these solicitations are being made across the country, but New Brunswickers are clearly being targeted,” Hancox said. “We are working with the Saskatchewan Financial Services Commission on this case, and they have also issued a temporary cease-trade order in this matter.”

“Most people are often embarrassed to report this type of activity for fear of what their family or friends will think, particularly if they have encouraged others to make the same investment” says Hancox. “Don’t let embarrassment or fear keep you from reporting investment fraud or abuse.”