A Canadian online investing company owned by residents of an Indian reservation last week gave in to pressure from regulators and suspended its US and Canadian operations.
The site, tradingoffshore.com, promised investors tax-free offshore trading in the Cayman Islands, but now a notice warns visitors that the content "is not intended for distribution to any person resident in Canada or the United States."
In fact, the site is owned by a Bahamian company, and could not have legally offered investment products to US or Canadian citizens. It seems that the ultimate owners, based in the Kahnawake Mohawk Territory in suburban Montreal, were relying on the special tax status of their territory to bypass normal investor protection rules.
The company said it was closing up in Montreal to avoid a fight with regulators, including the Quebec Securities Commission, which had warned Tradingoffshore.om that its operations would fall under its jurisdiction even if they were located at Kahnawake.
Said Claude Reid, spokesman for the Quebec Securities Commission: 'All persons who want to act as a broker for electronic trading in Quebec must be registered with the QSC'.
Michael Van Dusen, a spokesman for Tradingoffshore.com Toronto, claimed that three independent legal opinions had confirmed that the trades took place in the Cayman Islands, but said that the company did not plan to fight against the QSC.
A press release from the company on Friday emanated from Costa Rica, and announced that President Susanne Thiessen, on leave from a job as senior programmer at the University of Victoria, would be replaced by Mario Vargas Barguil. Evidently there are limits to the attractions of a dotcom when you have a good job to go back to!
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