If it sounds too good to be
true, it probably is
Just after reading the article last week on the list of foreign
share-pushers to be avoided that was supplied by the Financial Services
Authority, I received a call from a firm called Richmond International which
claimed to be based in Dominica.
The caller claimed that I had
registered for information on a website in respect of share and investment
options. He thought I would be interested in a Nasdaq stock that "was set to
go stratospheric". A second person, called a "senior adviser" said Richmond
was regulated in Dominica.
He wanted me to buy into a
company called SBS Interactive. He said it was about to enter a very
lucrative deal with Sony.
What does this company do? Should
I buy the shares? And is Richmond fine to deal with as it was not on the FSA
· The FSA list featured a
large number of companies warned against in this column. But it was far from
complete. New share-pushing operations start up all the time - often old
operations with a new name and, ostensibly, a new location. The FSA list has
some very old names.
It is hard to know what "Dominica
regulation" means. The US Treasury Financial Crimes Enforcement Network
warned investors in July 2000 to give "enhanced scrutiny" to transactions
there. It said banks are "subject to no effective supervision" nor need they
report "suspicious transactions". Moreover, the US Treasury says Dominica
offers a safe haven for criminals. So why is Richmond holed up there?
SBS Interactive, formerly
Cosmetics Consultants and Lomillo Consultants, is a Toronto-based company
registered in Florida. It is not quoted on Nasdaq.
It claims to have developed
interactive software for television sets but there is no confirmation that
Sony has any substantial interest. The company recently issued 50m shares at
An investment would be little
different from burning your cash.
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