Cease-Trading Orders Issued Against Cold Callers
Cease-trading orders were issued by the Saskatchewan Financial Services Commission (Canada). last Tuesday against Arial Trading LLC and Meridian Investment Group SA, both of Costa Rica, and Hartford Capital Management SA of  Panama.

Don Brasfield, John Reece, Rick Saxon and George Dizcarra of Arial Trading; Frank Grant and Timothy Bell of Meridian; and Bruce White of Hartford have also been ordered to cease trading, who being named in the three orders, have solicited investments in oil, gold and other commodity options and attempted to obtain money from Saskatchewan residents through telephone and e-mail canvassing, the commission said in a news release Monday.

"None of the men have been or are registered to trade in securities or act as advisers in Saskatchewan, and have contravened provincial registration requirements,'' the release said.

Ed Rodonets, deputy director of securities enforcement for the commission, said one of the respondents, Tim Bell of Wellington Trading Group, also of Costa Rica, was ordered to cease trading last August as part of a clampdown on 'cold callers' -- companies that solicit investments from individuals chosen randomly or whose names are on so-called 'sucker lists.'

"This is a similar situation," Rodonets said. "We've received information that there may be as many as 20 firms operating out of Costa Rica doing the same type of business as Wellington."

Rodonets said the companies operate "boiler rooms'' -- so-called for their high-pressure sales tactics -- generally in offshore locations where rules against unsolicited investment sales are more lax.

"They're unregistered companies that can't deal in Saskatchewan or Canada. None of them are registered anywhere else in Canada. They contact Canadian citizens and hold out to be able to make them huge profits -- upwards of 600 to 800 per cent.''

Rodonets said the companies and their sales "advisers'' are all interrelated and interconnected, but make it look as though they're separate entities by using Web sites and brochures. They also frequently use company names that are similar to recognized, legitimate companies.

"They also use legitimate banks to move the money. They'll ask you to deal with your regular Canadian bank, then transfer it to an American bank. Then it's eventually transferred to an offshore bank,'' which is usually controlled by the companies, he said.

The other thing the companies have in common is that investors invariably lose their money when they invest with them.

"We have yet to find any clients that have made money with these companies. They've all lost money.''

While the commission doesn't know exactly how much money has been lost in Saskatchewan, Rodonets said the companies typically target to get $50,000 to $100,000 from each client.

The cease-trading order is in effect until March 21, but could be extended "if sufficient information'' is not provided to the director of the securities division by that date. The commission could also hold a hearing to consider whether to make the cease-trading order permanent.