UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16135/ MAY 11, 1999
SECURITIES AND EXCHANGE COMMISSION v. FUTURE STRATEGIES Srl,
EMERGENCY RELIEF SOUGHT AGAINST ITALIAN ENTITY PROMOTING
The Commission announced that on May 11 it filed a complaint in the United States District Court for the Northern District of Georgia, seeking a temporary restraining order, preliminary and permanent injunctions, disgorgement with prejudgment interest, a civil penalty, and other equitable relief against Future Strategies Srl, a/k/a Future Strategies International ("Future Strategies"), an Italian entity headquartered in Carpi, Modena, Italy. The complaint alleges that Future Strategies is promoting over the Internet a worldwide pyramid scheme known as "Pentagono." The complaint charges Future Strategies with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934 as well as the registration provisions of the Securities Act.
According to the complaint, Future Strategies has solicited United States residents from at least May 1998 to purchase Pentagono "Certificates," now called Card Purchase Orders ("CPOs"), which Future Strategies prepared and issued. More than 400 investors throughout the United States have invested in this scheme. The complaint alleges that Future Strategies, as part of its solicitation, claims on its Website that an investor can earn up to $116,400 from an investment of approximately $120. The complaint further alleges that Future Strategies also misleadingly implied that the Pentagono scheme is legal in the United States and guaranteed that an investor will reach the top position in the Pentagono pyramid.
The complaint alleges that the Pentagono scheme involves the offer and sale of Pentagono Certificates/CPOs by Future Strategies through existing participants. Each new investor makes a payment to Future Strategies, as well as to the person purportedly offering the Certificate/CPO and to a person who had previously purchased Certificates/CPOs. Upon payment, Future Strategies provides the new investor with three new Certificates to sell. The investor then becomes eligible to receive a portion of the proceeds raised from the sale of subsequent Certificates/CPOs. The complaint further alleges that the Pentagono scheme involves the offer and sale of investment contracts whereby persons invest money in a common enterprise and are led to expect that profits will come predominately from the efforts of others.
On the same day the action was filed, the Honorable Jack T. Camp, United States District Judge, entered an order temporarily restraining Future Strategies from future violations of the antifraud provisions of the Securities Act and Securities Exchange Act and of the registration provisions of the Securities Act. The Court also entered an order, inter alia, requiring Future Strategies to provide a sworn accounting of all funds received from persons in the United States pursuant to the scheme and of the disposition and use of such funds. A hearing on the Commissions motion to show cause why Future Strategies should not be preliminary enjoined is scheduled for May 21, 1999. [SEC v. Future Strategies Srl a/k/a Future Strategies International, Civil Action No. 1:99-CV-1199-JTC (N.D. Ga.)] (LR-_______)http://www.sec.gov/litigation/litreleases/lr16135.htm