Published 27 June 2007
The Securities Commission banned ads last week for the Locke secured capital plan, offered by Locke Guaranty Trust (NZ) Ltd, and made some uncertain negative comments about the company. Details have since been removed from the company’s website.
The Securities Commission’s primary markets director, Kathryn Rogers, said Locke stated that New Zealanders weren’t eligible to invest in the plan, but the company appeared to be using New Zealand as a base to offer securities in other countries.
One of Locke’s ads, for a Taipei representative, offers a payments scheme bearing an uncanny resemblance to a pyramid. It also mentions that Locke is a registered “wealth creation bank”.
Locke was incorporated on 22 March, with its registered address at Auckland Compliance Ltd, 60 Cook St. Directors are Chan Weng Sun, Kuala Lumpur; & Lee Che Hock (Joseph Lee), Petaling Jaya, Malaysia. The company’s owner, with 100 million shares (increased from 1000 on 1 May), is British Virgin Islands company Locke Capital Investments (BVI) Ltd.
Auckland Compliance’s director is Robert Enrique Morales, of Panama, and its owner is Overseas Capital Ltd (registered office the ASB Bank Centre, Auckland; director Michael Magnusson, Panama; owner Overseas Clearing Corp, Panama; incorporated 22 December 2006). Mr Magnusson is listed in New Zealand as a director of Eurowire Clearing Corp Ltd (incorporated 30 April), Opus Bancorp Ltd (incorporated 14 May), Overseas Capital & Overseas Trust Ltd (incorporated 1 March 2004).
Mr Morales is listed in New Zealand as a director of Auckland Compliance, Continental Bancorp Ltd, First Liberty Savings & Loans Ltd, First Pacific Trust Ltd, National Savings & Loan Ltd, Pacific Bancorporation Ltd, Providence Bancorporation Ltd and Providence Savings & Loan Ltd, and as a former director of Century Trust Ltd, First Capital Savings & Loan Ltd and First Pacific Savings & Loan Ltd.
Issuing the banning order, Ms Rogers said: “The commission can & will intervene in deceptive or misleading offers being made by people based in New Zealand, even if the offer is not open to New Zealanders. Investors should be warned about the scheme because the commission believes claims made about it are likely to deceive, mislead or confuse investors.”
She said Locke advertised the plan on its website, where it said the investment was safe & risk-free. “All investments have a degree of risk and the commission believes these statements are deceptive & misleading.
“The website also stated:
that LGT offers internet banking and is regulated under the Reserve Bank of NZ Act 1989, andthat LGT is regulated by the Securities Act 1978.
“The website may have given the false & misleading impression that LGT has been licensed &/or approved by the Securities Commission or the Reserve Bank. LGT is not a registered bank in New Zealand and is not subject to banking regulations.”
Ms Rogers said if Locke’s claim that New Zealanders weren’t eligible to invest was true, then the offer wasn’t subject to the Securities Act. She did it didn’t comply with the act.
“The description of the scheme is confusing because it is unclear how LGT intends to use investors’ money and information about this appears inconsistent.
“LGT has made efforts to remove advertisements for the plan from its website. It has stated that any failure to comply with the law was inadvertent. This, however, does not alter the position that people may have been deceived or misled by the advertising.”
In one online ad for a “pioneer representative”, Locke said: “Locked Guaranty Trust (NZ) Ltd or LGT is a fully registered, genuince and most transparence Wealth Creation Bank located in Auckland, New Zealand. Now is a pre launch stage & LGT is looking for pioneer representatives towards venturing worldwide market including Taiwan. LGT offers their customers a smart saving concept where people can earn a high fixed annual income ( min 12% ) and enjoy non-stop monthly passive income through 7 Generations Unilevel Referral Program ( 10%, 5%, 3%, 2%, 2%, 3%, 5% ) plus Performance & Pioneer Bonus ( 2% each ). All are paid via International Visa Debit Card. Find out more & free register at http://euro4u.lgt.co.nz or http://www.lgt.co.nz/euro4u Click OPEN LSCP ACCOUNT for doing so & follow the next instructions. We’ll get back to you very soon.”
However, the Locke website itself has been taken offline. The notice there now says: “Please note that the lgt.co.nz site has been taken offline. It is in the process of being redesigned for compliance with the requirements of the New Zealand Securities Commission.”
The website of Mr Magnusson’s Overseas Clearing Corp says: “We form & register companies, trusts & foundations in all major offshore jurisdictions around the globe. In addition to traditional offshore companies registered in Panama & other tax havens, we focus on entities authorised to offer financial services and to manage client assets, such as trust companies, investment companies, banks & credit unions.”
The site says Mr Magnusson is president & chief executive and that the business operates from the eighth floor of the World Trade Centre in Panama City.
The website of NZ-registered Overseas Capital says: “The main activity of our company is to help clients worldwide to establish offshore finance companies.
“An offshore finance company (OFC) can offer its services to both private individuals & corporate customers worldwide. The OFC can engage in activities which in most jurisdictions would require a full bank licence, yet the OFC can remain virtually unregulated. We offer a complete compliance service to ensure that your OFC is always up to date with local laws & reporting requirements.”
It says the OFC can offer virtually anything a bank can offer, but can’t us the word bank in the company name.
Websites: Overseas Capital
Attribution: Securities Commission release, story written by Bob Dey for this website.