The Dubai Financial Services Authority (DFSA), acting on complaints from investors in Dubai, provided information to the Financial Services Authority of Japan who closed down Charles Fleming & Co in Japan.
As shown below, Emirates Today had run a story on June 15 about Denis Hardy, 66, a resident of Dubai, who claimed to have lost about Dh100,000 of his hard-earned money, leaving him completely debt-ridden.
Charles Fleming had approached Hardy in late 2004 to buy shares of a company building a big leisure centre in South Korea.
"They promised me that the share prices would increase two to three times within a couple of months," Hardy told Emirates Today at the time.
He eventually bought 6,500 shares of the said company over a period of time at $4 (Dh14.68) each through Charles Fleming.
Hardy transferred the amount in three tranches between November 2004 and March 2005. He was told that he would get to make his money when the company came out with an initial public offering - that was expected to happen in April 2005.
The DFSA said other Dubai investors had received cold calls from Charles Fleming & Co, which claimed to have an office in Japan, enticing them to purchase shares in Pan Pacific Asia Development, an unlisted company and not approved by the FSA Japan. After the purchase of shares, investors were informed that their funds had been transferred to another company and investors were pressured into further trades if they wished to recover their original funds.
Charles Fleming & Co directed investors to deposit their funds into a major commercial bank in Hong Kong.
This information has also been passed on to the Hong Kong authorities. No funds or share certificates have been recovered to date.
Acting on information from the DFSA, the FSA in Japan found that Charles Fleming & Co was neither registered with, nor licensed by the FSA as an investment adviser and the alleged shares were not approved investments.
Their enquiries concluded that Charles Fleming & Co was apparently operating a "boiler room" scam.
The DFSA also passed the relevant information on to the Dubai Police. The DFSA has previously assisted the police authorities in the UAE in closing down SMI, another "boiler room" scam last year.
David Knott, CEO of DFSA, said: "In recent years, there has been a worrying growth in fraudulent schemes to lure consumers into bogus offshore investments.
"Sometimes, the sales pitch is very sophisticated and it is easy to think you are dealing with a legitimate firm. But the golden rule is to never send money overseas without first checking with a qualified financial adviser, accountant or lawyer," he added.
© Emirates Today 2006
