Quebec’s securities regulator is urging investors to be cautious about Heritage Benefits Financial Services Inc. — a company that is not registered as a securities dealer, but has been soliciting investors to open accounts.

In a release on Thursday, the Autorité des marchés financiers said Heritage Benefits has been cold-calling foreign investors in particular with offers to invest in the metals market. The regulator does not know whether Heritage has contacted investors in Quebec, but said it has reason to believe that the firm may be operating out of Montreal.

Heritage is not registered with the AMF to carry on business as a securities dealer or advisor and is therefore not authorized to solicit Quebec investors. The regulator is cautioning investors in Quebec and elsewhere to be on their guard if approached by this firm or its representatives.

Heritage uses a typical boiler room strategy. It solicits investors to purchase metals futures contracts and open an account with the company. Investors are subsequently instructed to transfer funds to the account of Regal and Archer LLC held at the Universal Bank Public LTD.

Heritage then calls them back to tell them that their accounts are overdrawn following several margin trades, or that an employee, who has since been dismissed, misappropriated funds from their accounts. Investors are told that they must make an additional transfer to an account held in the name of Regal and Archer at Universal Bank Public in Cyprus, to cover administration fees and commissions before they can recover their funds.

Investors have not heard from Heritage for several months now.

Based on documents that investors received, the AMF said the following individuals may be linked to Heritage Benefits Financial Services: Matthew R. Kennedy, Pieter McNeil, Daniel Wright, Emily Parnell, Martin Simon, William Buckner, Thomas Geithner and Mark A. Johnson. None of these individuals are registered with the AMF.

IE