Investors warned against over-the-phone schemes

About 35 New Zealand investors have been stung by a phone fraud futures contract scheme run from the US.

The US Commodity Futures Trading Commission has taken court action against the scheme which involved illegal futures contracts for precious metals and other commodities.

Investors were signed up by phone.

The New Zealand Securities Commission said virtually all customers had lost most of the money they invested. Most of the money had gone on commissions and fees.

The principals of the scheme, which purported to operate from the Bahamas but was actually based in North Carolina, were Alan Stein, Joseph Finateri and Michael Temple.

The contracts were illegal under US law.

"The case shows how important it is for people to be very cautious when approached with overseas investment propositions over the phone," Securities Commission senior executive of operations Norman Miller said.

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