Central Bank Warns On Unauthorised Intermediaries
The
Irish Central Bank has issued a warning to investors to be
careful of unauthorised investment intermediaries. The Bank has
been surprised by how easily some offshore companies have been
able to extract large amounts of money (in some cases six figures)
from people by "cold calling' with promises of highly unlikely
returns of up to 75 per cent in a week. Cold calling is not permitted
to authorised investment firms. Most of the schemes offered involve
complex and apparently lucrative share or foreign exchange dealings,
inviting individuals in one jurisdiction to invest in shares from
another jurisdiction, by sending money to a third jurisdiction.
They are usually set up through offshore jurisdictions and close
after operating for only a short period, making them difficult
to monitor and regulate. The individuals behind the companies
then move onto new schemes (set up in the same or other jurisdictions)
often taking their client lists with them. The Central Bank said it has
noticed a trend of unauthorised companies going back to individuals
who have previously made unsuccessful investments with new schemes
to encourage them to spend more money to recoup their losses on
the original scheme. Since the Central Bank was
given the right in 1998 to print notices warning the public about
unauthorised firms about 35 such notices have been issued in Ireland. .
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