By FIONA ROTHERHAM
At least 35 New Zealand investors have lost money in a fraudulent United States-based $US18 million ($39.3 million) futures telemarketing scheme.
The United States Commodity Futures Trading Commission, which regulates futures and options trading, has sought a court injunction to put the telemarketers out of business. It claims they illegally sold futures contracts in commodities such as silver, palladium and heating oil.
The scheme's three principals, Alan Stein, Joseph Finateri and Michael Temple, are subject to the court action, along with their related companies, IBS, IMC Trading, Joe Miller Company and Mazuma Trading Group.
Customers were cold-called by telephone both within and outside the United States.
American phone jockeys have been flogging penny-dreadful US stocks here for the past couple of years, but this is thought to be the first involving futures contracts.
The New Zealand Securities Commission is not sure how much was invested by New Zealanders, but understands that most of their money has been lost.
Much of the money went on undisclosed fees and commissions.
The contracts were illegal under US regulatory requirements and New Zealand securities laws.
Investors were promised profits of up to 100 per cent in just a few months.
IMC Trading offered the chance to invest in precious metals by making a 20 per cent downpayment and a loan for the remainder. Once customers parted with an initial investment, they were hounded by telephone to invest additional money in silver contracts.
The promoters claimed to operate from the Bahamas, but were actually based in Charlotte, North Carolina.
The Commodities Commission said several millions dollars in customers' funds were transferred between foreign and domestic bank accounts held by the various defendants and other parties. The funds were allegedly used to pay for personal expenses.
Permanent injunctions will be sought to keep the defendants out of business.
Futures fraud rips off Kiwi investors
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