News Release

Released: 10/24/01 Contact: Andrew Poon
NR 01-51 604-899-6880 or
(BC & Alberta) 1-800-373-6393

Vancouver -- The B.C. Securities Commission has found that an Internet-based investment club and its backers violated the Securities Act by committing fraud and selling securities without being registered.

As well, Tri-West Investment Club breached the Securities Act by distributing securities without filing a prospectus.

The commission panel also found that John Byron, a B.C. resident, traded in the securities of Tri-West and advised other B.C. residents to purchase the securities without being registered and committed fraud in connection with these activities in violation of the Securities Act.

The commission will rule on sanctions after hearing further from the parties in November.

The panel found that the “Tri-West program appears to be a quintessential example of what has come to be known world wide as a 'Prime Bank Instrument Fraud'.”

“Prime bank instrument frauds claim to involve the purchase and sale of fully negotiable bank instruments. These bank instruments are purported to be the debt obligations of the top, or prime, world banks. In fact, neither these instruments, nor the markets on which they allegedly trade, exist," said the panel.

The commission noted that several international organizations and law enforcement agencies have issued warning circulars and bulletins about prime bank instrument schemes.

The commission decision highlighted the common characteristics of these frauds, among them:

· The program guarantees unrealistically high rates of return within a short period of time.
· The program claims to be risk free.
· Investors are told that they are among the privileged few whose money will be pooled to invest in secret programs reserved for top financiers.
· Investors are asked to sign secrecy or confidentiality agreements.
· Some part of the program is transacted through a country regarded as a secrecy haven, which, it is claimed, enables investors to avoid paying taxes on their returns.
· Investors are given financial incentives for bringing in new investors.
· The money from one group of investors is used to show a profit to a subsequent group. Eventually, the promoters pocket the proceeds and disappear, leaving the pyramid to collapse.
· Investors are solicited through the Internet.

The panel noted that the Tri-West program displayed many of these characteristics -- including touting a rate of return on investment of 10 per cent per month -- and concluded that it was “an outright scam.”

The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities and exchange contracts within the province. Copies of the decision can be viewed in the documents database of the commission’s website www.bcsc.bc.ca or by contacting Andrew Poon, Media Relations, 604-899-6880.

Backgrounder

1. Tri-West Investment Club, Haarlem Universal Corporation, John Byron, and the individuals holding themselves out as Jason Kingsley, Mark Goldman, Alan Richards and Alex Haarlem traded in securities of Tri-West without registration, contrary to section 34(1)(a) of the Securities Act.

2. Tri-West distributed its securities without a prospectus, contrary to section 61(1) of the Act.

3. Byron acted as an adviser without registration, contrary to section 34(1)(c) of the Act.

4. Through their participation in the Tri-West scheme, Tri-West, Haarlem Universal, Byron and the individuals holding themselves out as Kingsley, Goldman, Richards and Haarlem perpetrated a fraud on persons in British Columbia, contrary to section 57 of the Act.