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SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 16348 / November 9, 1999

CIVIL CONTEMPT SOUGHT AGAINST ITALIAN ENTITY PROMOTING PYRAMID SCHEME OVER THE INTERNET

SECURITIES AND EXCHANGE COMMISSION v. FUTURE STRATEGIES SRL a/k/a FUTURE STRATEGIES INTERNATIONAL, United States District Court for the Northern District of Georgia, Civil Action No. 1:99-CV-1199-JTC.

The Securities and Exchange Commission announced that, on or about November 5, 1999, it filed an application with the United States District Court for the Northern District of Georgia seeking an order of civil contempt against Future Strategies Srl a/k/a Future Strategies International ("Future Strategies"), an Italian entity headquartered in Carpi, Modena, Italy. The Commission's application seeks an order to show cause why Future Strategies should not be held in civil contempt for failing to comply with the Court's oral order converting the temporary restraining order to a preliminary injunction, and the Court's subsequent written order of preliminary injunction entered on June 16, 1999 enjoining Future Strategies from violations of the registration and anti-fraud provisions of the federal securities laws. Future Strategies consented to the entry of the preliminary injunction and other relief without admitting the allegations in the Commission's complaint.

The Commission's complaint alleges that Future Strategies is engaged in an ongoing, worldwide pyramid scheme, known as "Pentagono," promoted over the Internet. Such conduct violates Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission's complaint alleges that, from at least May 1998, Future Strategies solicited United States residents to purchase Pentagono "Certificates," now called "Card Purchase Orders" or "CPOs," which Future Strategies prepared and issued. Thousands of United States participants have invested in this scheme. The complaint alleges that Future Strategies, as part of its solicitation, claims that an investor can earn up to $116,400 from an investment of approximately $120 through Pentagono.

See also: L.R. 16135 (May 11, 1999) and L.R. 16213 (July 16, 1999).

http://www.sec.gov/litigation/litreleases/lr16348.htm

Modified:11/12/1999