MBSC Schedules Hearing Against Wealth Pools
Wealth Pools International hearing scheduled for Mar. 26
The New Brunswick Securities Commission has issued a notice of hearing against a company and four individuals that it alleges operated a pyramid scheme.
Staff of the commission allege that beginning in early 2006, a purported multi-level marketing company named Wealth Pools International Inc. solicited New Brunswick residents to participate in an investment scheme. They allege that the plan relied on recruiting new members and is a classic pyramid, or 'Ponzi', scheme.
The investigation by commission staff has revealed that at least 109 New Brunswick residents invested in excess of $440,000 in Wealth Pools.
None of the allegations have been proven. A hearing in the matter is scheduled for March 26.
In a related matter, the US Securities and Exchange Commission has obtained an emergency restraining order and asset freeze order from a Florida court against Wealth Pools and several individuals, although the NBSC says that New Brunswick residents were not named in this order.
'Investors should be concerned about an investment scheme whose returns are based on recruitment rather than on commercial activity. These are known as Ponzi or pyramid schemes and, unfortunately, they're all too common,' says Rick Hancox, the NBSC's executive director. 'They are especially dangerous because they're usually introduced by those close to you, your friends or family, even members of your church. Investors need to take a critical look at this sort of arrangement, even if they know people who are actually making money, because it's often made off the backs of friends who have lost money.'
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