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21 September 1999

News Release

WARNING : INVESTORS INTERNATIONAL

Media Release

The Securities Commission urges great caution before paying or committing any money to schemes run by Investors International.

The Commission has received a number of reports about the activities in New Zealand of Investors International, an American-based scheme operated from Portland in Oregon. We are informed that the founder of the scheme is a Dr Rudolf van Lin, also known as Rudolf Linschoten. We are informed that the United States Securities and Exchange Commission has prosecuted this person for the fraudulent offer and sale of unregistered securities. This related to another scheme called Sabre Asset Management.

Investors International promotes a financial educational scheme conducted at seminars held offshore. These have been held in Kuala Lumpur and Fiji, and the next one is planned to take place on an Alaskan cruise.

Meetings have been held in New Zealand to recruit people into the scheme. These meetings have been organised by New Zealand representatives of Investors International who are called "approved retailers".

The meetings have also been promoted as a way for people to gain access "to secure investment opportunities that return a minimum of 10% per month". This is a patently unattainable return similar to that projected for prime bank schemes which we know to be fraudulent. Conventional financial information about these schemes is not available to investors.

The financial educational scheme involves paying money to the New Zealand "approved retailer". The first payment is equivalent to the price of 18 ounces of gold (some $9,000), the second is equivalent to 85 ounces and the third to 185 ounces. The arrangements are said to involve successively (a) seminars, books and tapes; (b) "access to offshore higher yield ventures via IBC's [international business corporations] and Trusts"; and (c) the "ultimate introduction into a different world of offshore finance few people understand or even know about". The exact details, and the rationale, of the arrangements are far from clear.

The financial educational scheme of Investors International appears to be widely promoted in the North Island but particularly in Papakura, Tauranga, Hamilton and Wellington.

It appears that a significant portion of the payments (some 70% or some several thousands of dollars) goes to the New Zealand "approved retailers" as a commission for securing new recruits.

The New Zealand "approved retailers" may be in the position of investment advisers for the purposes of the Investment Advisers (Disclosure Act) 1996. If so they must disclose on request, their qualifications and experience as an investment adviser, also any remuneration they derive from their activities. These aspects are material to any decision to invest. They are however vitally important in the present case.

Investors International has been the subject of regulatory action in Australia by the Australian Securities and Investments Commission. This resulted in court action by that Commission which stopped the Australian company and its director from carrying on investment advice business.

The Commission would urge people to be particularly cautious in any dealings with Investors International or any of its "approved retailers".

Norman F Miller
Senior Executive (Operations)
21 September 1999

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