The company claimed addresses across many jurisdictions, and bank accounts across the world in GSP’s name seem to have benefited from investors’ money, which without a major investigation may never be returned.

Over the last month we have received more letters detailing similar stories of dealings with the company, and the hope is that the growing number of complaints to police authorities, the SEC, the Toronto SEC, and other financial regulators may turn attention to this case. Many victims are now in touch with each other thanks to websites such as the Scamwatch page we listed in September’s issue at

http://mymoney.iafrica.com/scamwatch/forum/255397.htm

GSP has made sure that this is a very difficult case to investigate, with a contact centre in the UK and many supposed bases across the globe. It is hard to see which authority from among local police in the UK, police in other countries, Interpol or the SEC is the most likely to take the case further.

All investments, in particular offshore investments, require a great deal of research by each investor. But as this case highlighted to II shows, some companies will go to great lengths to gain people’s trust and then defraud them.

One way in which GSP appears to have defrauded so many investors, with possibly millions taken, is through their assurance that the companies they were to invest in were all good performers.

GSP sent out regular newsletters to interested investors, which are said to have been very well written, and in many cases provided very accurate information and suggestions on investing on the NYSE and Nasdaq. Whether the company actually had people with wide investment knowledge or whether they just took this expert information from elsewhere and reformatted it is anyone’s guess.

The point here is that they provided this information on a regular basis and retained enough contact with potential investors to make some believe in their credentials.

One reader says: “The fact that I was involved with them over a period of three years made me foolishly accept them as men of integrity.” Offering a warning to all investors out there when considering any offshore company, this reader adds: “It does seem ridiculously easy for men such as these to run a scam and con usually careful investors out of their hard-earned money.

“People usually rely on the integrity of others and in doing so do not realise that the sharks out there are in the majority.” Between 2001 and 2003 the reader made transfers to GSP’s accounts. After initially investing in one stock recommended through telephone conversations with someone representing GSP, the investor then swapped stocks to a company called SBS Interactive Inc, which again seemed to be performing well. At this point, contact was maintained with GSP, but it was soon to turn ugly. The company was supposed to inform the investor when to sell the stock, and when the investor wanted to sell when it reached $5, GSP said that it would rise to $7–9.

When this did not prove the case, they were advised by the reader to sell at $4. From this point on, contact was lost and calls to the UK-based call-centre for the company all went unanswered.

Since then, investors have received the perhaps predictable letter confirming the ending of GSP’s “services”, as they put it. Share certificates have been issued to some, but these could well prove to be shoddy, and the company said that a cheque closing the account would be received. The likelihood of that seems pretty remote right now.

As we mentioned last month, this case also raises the issue of ‘know your customer’ rules, as regulators must know exactly who is behind companies such as GSP.

II also contacted the Financial Services Commission in Gibraltar, as GSP had a PO Box there. The FSC on the Rock said that GSP was never registered in the jurisdiction, and added that it was thrown off the registry of the Bahamas in August 2002 for non-payment of fees for the years 2001–02.

Both jurisdictions, and others, have issued warnings against this company. The Bahamas Financial Services Board pointed out that “the ‘know your customer’ regime of the Bahamas is in compliance with best practices / international standards and, in fact, in some circles is thought to exceed such standards.”

Ultimately it seems that an authority such as the SEC, which has replied to one investor’s complaints about the company, or the police in one or more of the relevant jurisdictions will have to step in if anything is to reach a successful conclusion and any of the investors involved with GSP are to see any of their money again.