SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16898 / February 14, 2001
Federal Judge Enters Default Judgment in Internet-Based Pyramid Scheme
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 today that the Honorable Jack T. Camp, United States District Court Judge for the Northern District of Georgia, entered a Default Judgment As To Defendant Future Strategies Srl a/k/a Future Strategies International ("Future Strategies"), an Italian entity headquartered in Carpi, Modena, Italy. The Default Judgment restrained and enjoined Future Strategies from further violations of 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 Court also ordered disgorgement against Future Strategies in the amount of $950,073, including prejudgment interest in the amount of $184,073, and imposed a civil penalty of $550,000.
The Commission's complaint alleged that Future Strategies operated a worldwide pyramid scheme, known as "Pentagono," promoted over the Internet. The Commission's complaint alleged that, from at least May 1998, to May 1999, Future Strategies solicited United States residents to purchase Pentagono "Certificates," which served as a vehicle for transferring investors' funds to prior investors and to Future Strategies. Thousands of United States participants invested in this scheme. The complaint alleged that Future Strategies, as part of its solicitation, claimed that an investor could earn up to $116,400 from an investment of approximately $120 through Pentagono.
See also: L. R. 16135 (May 11, 1999); L. R. 16213 (July 16, 1999); L. R. 16348 (November 9, 1999)http://www.sec.gov/litigation/litreleases/lr16898.htm