Chicago Based Investment Firm Facing Fraud Charges in British Columbia

A Chicago based investment firm is being investigated by the British Columbia Securities Commission (BCSC) for alleged acts of fraud and trading securities without being registered. On August 13th, the Executive Director issued a hearing notice to Strategic Global Investments (SGI) as part of an ongoing investigation into that company’s activities in the summer of 2012.

The notice alleges that at least three investors from British Columbia have been defrauded by the company of approximately $80,000 as a result of their investing in SGI.

SGI has never been registered in British Columbia, which makes the soliciting of trades a breach of securities laws by failing to meet the registration requirements. SGI is also being charged with making fraudulent claims on its website and that it staff made misleading and false statements in order to defraud investors of their money.

In the summer of 2012, the notice alleges, SGI representatives cold called investors in B.C. and convinced them to invest in gold options. The callers claimed that SGI was involved in commodities and foreign exchange, that it has been doing business since 1998, and had clients in over 70 countries. Investors were told that the company’s headquarters were in Chicago and were convinced that they were in control of their money at all times. The realities however, were far from the promises and claims. SGI’s website was not created until June 2012.  Its “offices” were virtual offices that were never actually leased to SGI.  Additionally SGI was not registered with the National Futures Association, the Commodities Futures Trading Association, or the British Columbia Securities Commission.

Following the instructions given them, the three investors, wired money to the company’s bank accounts in Costa Rica. The Company representatives then convinced at least one investor to “invest” an additional $58,000 with SGI based on supposed returns. The investors were told that while their investments were making huge gains, the company was unable to deliver proceeds because the investors owed US taxes, or that the company was merging with another entity. Repeated phone calls yielded no payout and to date none of the investor have been able to recover any of their money.

The allegations have not been proven, and are currently under investigation by the BCSC which is the independent provincial government agency responsible for regulating trading in securities within the province. The Counsel for the Executive Director will apply to set dates for a hearing into the allegations before a panel of commissioners on September 3, 2013 at 9:00am to continue investigating.

There are a multitude of companies on the internet that make amazing claims about their capabilities and ability to garner huge returns for investors. Without due diligence investors can be suckered by a slick presentation, virtual offices, and a great message. Making sure that a company is actually what claims to be is important for investors, regardless of the company of origin or where the purported investment opportunities may be.