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4 September 2002

News Release

Commission warns about schemes promising high returns

Reports of investment schemes promising improbably high returns are increasing, according to the Securities Commission.

"Uncertainty in the share markets creates an attractive climate for the peddlers of illegal investments such as prime bank schemes," Chairman Jane Diplock said.

"Their offers of high returns from secret schemes seem very attractive. They are often entered into by people who otherwise consider themselves prudent investors but who are lured to these scams by the interest rates offered."

People should be wary of so called investment schemes which:

• have no investment statement or prospectus
• give few or no details about the issuer and how the money is to be invested
• promise very high returns
• claim that the investment is "safe" or "risk-free"
• refer to "top world banks" or "prime banks"
• are "private" offers open only to a select few
• say the scheme must be kept secret in order to succeed.

Contact: Catherine Chapman Phone (04) 471 7659

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