ALABAMA
SECURITIES COMMISSION
770 WASHINGTON AVE, SUITE 570
MONTGOMERY, ALABAMA 36130-4700
Telephone: (334) 242-2984 or 1-800-222-1253. Fax: (334)
242-0240
Email: asc@asc.state.al.us. Website:
www.asc.state.al.us
FOR IMMEDIATE RELEASE
Internet Investment Business Ordered to Cease and Desist--
Investors to Receive a Portion of the Remaining Funds
MONTGOMERY,
ALABAMA (June 11, 2003) - Joseph P. Borg, the Director of the Alabama
Securities Commission, announced that the Alabama Securities Commission has
frozen the funds of Wealth Builders International (“WBI”), headquartered in
Birmingham, due to discrepancies pertaining to the licensing and registration
of Wealth Builders International, Inc. and its operation. Under Alabama law it is unlawful for any
person to offer or sell any security into, within, or from the state or to give
investment advice unless that person and/or entity is registered or exempt from
registration.
Individuals connected
with WBI engaged in the business of advising others as to the value of
securities or as to the advisability of investing in, purchasing, or selling
securities. During the course of the
Commission’s investigation it was determined that investor funds were not
directly invested as represented, but rather deposited into the operating
accounts of Networker2000, Healthquest, Inc., and into a WBI checking account
located at a Birmingham, Alabama bank.
Investor funds were
also withdrawn from the WBI account without notification to the investors and
utilized to pay salaries of office personnel, purchase office supplies, and pay
office lease payments. Further, it was
determined that investor’s funds were utilized to make payments to some
investors in the form of represented profit earnings, where profits did not
exist. Profits that were posted to the
individual Investor’s account were determined to be misrepresentations, not
true profits. Investors were told they
had profits in the accounts when in fact losses occurred in all months but
three. The Commission alleged that WBI
misrepresented the returns being made through WBI’s trading efforts.
Borg said, “To accurately
account for all investors’ funds it was necessary to liquidate WBI’s
holdings. In order to minimize any
further losses to the investors, the Commission placed all funds in an interest
bearing trust account under the strict control of a Birmingham law firm and
under the supervision of the Commission. The Commission is directing that all
funds be returned to investors.”
The Commission’s
investigation of WBI indicates that between September 1, 2001 and February 26,
2003, approximately 1,767 investors deposited $4,743,537.98 either in WBI or an
associated entity. Investors were paid
approximately $952,338.90 allegedly as profits which in fact did not
exist. Trading fees/losses totaled
$1,088,302.08. Unaccounted/
misappropriated funds totaled $197,829.05.
The amount of funds available for disbursement totals approximately $2.5
million. Borg said, “There is unfortunately
less money in the accounts than would be required for all individuals to
receive a 100% return of their original investment. Investors will be receiving a pro rata share of the WBI assets.”
Note: A
copy of the Cease & Desist Order issued to Wealth Builders International
can be found on line at the Alabama Securities Commission website at www.asc.state.al.us.
-
more -
The Director of the Alabama Securities Commission (ASC) cautions potential
investors to thoroughly check out any investment opportunity. Contact ASC for inquiries regarding
securities broker-dealers, agents, investment advisors, investment advisor
representatives, financial planners, the registration status of securities, to
report suspected fraud, or obtain consumer information:
ALABAMA SECURITIES COMMISSION
770
WASHINGTON AVE, SUITE 570
MONTGOMERY,
ALABAMA 36130-4700
Telephone:
(334) 242-2984 or 1-800-222-1253. Fax: (334) 242-0240
Email: asc@asc.state.al.us. Website:
www.asc.state.al.us
###
If you have questions or require more information contact:
Daniel
G. Lord
Education
and Public Affairs Manager