The British Columbia Securities Commission (BCSC) believes investors in York-Rio Resources Inc. could be the target of a “recovery room” or “re-up” investment scam.
The commission, along with the Manitoba Securities Commission, said an organization known as Featherstone and Bellman Equity Exchange Group has been contacting York-Rio investors offering to buy their low-value shares at an inflated price in exchange for an advance fee payment.
When the investor wires the payment to an offshore bank account the perpetrators then pocket the fee payment.
The BCSC said approximately 160 people in the province own securities in York-Rio. The commission has since issued a cease trade order for the company. Securities commissions in Manitoba, Alberta, Saskatchewan and Ontario have all issued cease trade orders.
A year ago, the BCSC published a similar warning about a company known as Penn Capital Management Ltd. that had also contacted York-Rio investors about share repurchases.
In 2008, York-Rio shareholders launched a blog to share information about the goings on with other securities holders.
FAB Equity Exchange Group has been added to the BCSC’s investment caution list and shareholders have been told to contact the commission if they are approached about selling their York-Rio shares.