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05-75 Fake international ‘regulators’ help swindle Australians investing overseas

Wednesday 30 March 2005


The Australian Securities and Investments Commission (ASIC) today warned Australian investors to be wary of messages, websites, phone numbers and addresses from fake ‘international regulators’.

‘Set up by fraudsters, fake regulator websites are part of the elaborate window-dressing designed to trick Australian investors into buying worthless shares from unlicensed, overseas-based stockbrokers. These offers are often ‘verified’ by the fake regulators’, ASIC Executive Director of Consumer Protection, Mr Greg Tanzer said.

ASIC has been alerted to this problem by a number of complaints, including people who lost money after being lied to by a fake regulator.

‘Worldwide, regulators are regularly warning investors about the problems of dealing with unlicensed sharebrokers, and some publish lists of specific companies to be wary of. Like ASIC, they encourage investors only to deal with companies that are licensed or registered in that country’, Mr Tanzer said.

The made-up entities about which ASIC is aware include the Foreign Shareholders Protection Department, US Securities Investigative Committee, International Compliance Commission, International Equity Commission, International Exchange Regulatory Commission, the International Regulatory Commission, and Regulatory Compliance Commission.

No genuine government regulators exist under these names.

‘The degree to which these fake regulators impersonate actual regulators can be surprisingly elaborate. They create official looking websites, and organise phone numbers answered by staff who pretend to work for the ‘regulator’. One even used –gov (hyphen gov) as part of its web address to resemble, at a quick glance, .gov (dot gov)’, Mr Tanzer said.

‘ASIC repeatedly advises Australians to only invest through licensed Australian financial services businesses. That way, you are much better protected if anything goes wrong.

‘In some ways, this latest trick suggests the message is starting to get through. As investors become better informed about the need to check licence details and verify information with the local regulator, these offshore swindlers are resorting to more elaborate devices to make themselves look genuine.

‘If you want to check if an overseas share market regulator really exists, start with the International Organisation of Securities Commissions (IOSCO). Visit www.iosco.org to find the real regulator in the country you’re interested in. Many IOSCO members also offer information on their websites to help investors, not to dupe them’, Mr Tanzer added.

End of release

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