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31 October 2000

News Release

NEW ZEALANDERS TARGETED BY CANADIAN STOCKS SCAM

Investors are warned about a scam involving worthless stock, "swaps" and telephone salespeople who claim to represent legitimate United States companies. The salespeople, who call from Ontario, Canada, target people in New Zealand.

Typically they purport to work for a brokerage house offering stock described as a once in a lifetime investment. The stock is likely to be a United States based over-the-counter stock worth fractions of a cent.

The so-called brokerage house, however, may hold a large block of the stock and deliberately promote it to drive up the price. After sufficient investors have bought the stock the salespeople, or those who back them, cease to support the market for the stock and its value falls dramatically. The victim is left with worthless stock and the brokerage house proves to be a mirage.

Some investors, having bought worthless stock, may be cheated a second time by people falsely claiming to represent legitimate US companies. They are encouraged by these people to swap their stock with so called "blue chip" stock, subject to the payment of more money. It appears this money will also be lost.

The Ontario Securities Commission's Investor Alert about these scams is on its web site - www.osc.gov.on.ca

Complaints from New Zealanders to the Ontario Securities Commission about such schemes have been referred to the Royal Canadian Mounted Police because the allegations involve fraudulent criminal activity under Canadian law.

Norman F Miller
Senior Executive (Operations)

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