News Release

Released: June 7, 1995  Contact: Ron Messent  660-4800 or 1-800-373-6393

The British Columbia Securities Commission has issued a series of regulatory enforcement orders, including substantial administrative penalties, against several firms and individuals found to have contravened the Securities Act in their trading in foreign exchange contracts during the period from about 1992 to 1994.

In two decisions released today, the Commission determined that the so-called forex contracts offered to the public by unregistered dealers in Vancouver are securities. The Commission takes the view that these forex contracts, which purport to represent the purchase or sale of various foreign currencies on margin, are risky and intangible investments of the type intended to be regulated under the Securities Act.

The Commission found that the dealers, and certain individuals associated with them, traded in and advised on the forex contracts without being registered, and distributed the forex contracts without filing prospectuses, thereby violating basic requirements of the Securities Act.

The first decision involves Yuen Chow International Group, Yuen Way Hang Lung International Foreign Exchange Co., Yuen Chow Equities Limited, Hang Lung Market Data Information Services, Inc. and Sonny Tat Wong.

They were ordered to comply with or cease contravening the Securities Act, ordered to cease trading in forex contracts, prohibited from trading securities in British Columbia for 20 years, and ordered to pay administrative penalties of $50,000 each. Sonny Tat Wong was also prohibited from being an officer or director of an issuer for 20 years.

The second decision involves Currency Specialist Ltd., AA Management & Services Inc., London & Global Ltd., London & Global FX (Canada) Ltd., David Lau, Alexander Ma, Ming Lamm, Po Zhinke Lamb (a.k.a. Paul Lamb) and Hing Wai Yuen (a.k.a. George Yuen).

They were ordered to comply with or cease contravening the Securities Act, ordered to cease trading in forex contracts, and prohibited from trading securities in British Columbia for periods varying from 10 to 20 years. All of the respondents, except Alexander Ma and David Lau, were ordered to pay administrative penalties of $50,000 each. Alexander Ma and David Lau were ordered to pay administrative penalties of $10,000 each. The individuals were also prohibited from being officers or directors for periods varying from 10 to 20 years.

Each of these forex contract trading operations solicited business from immigrant communities in British Columbia through personal contacts and advertisements in non-English language newspapers. Yuen Chow drew its clients from both the Chinese and Iranian communities. London & Global focused primarily on Chinese clients.

In each case, the Commission found that the operations had deliberately flouted securities regulatory requirements. They charged substantial commissions and price spreads on forex contract transactions, which virtually ensured clients would lose money and the dealers would profit. Profits were transferred from the local operations to offshore companies in Hong Kong and London, respectively.

The Commission noted that "By investing as little as U.S. $1,000 or $2,000 for a margin deposit, a client would be exposed to the fluctuations in value of about U.S. $100,000 worth of a foreign currency. Small movements in the price of the currency would result in a substantial profit or loss in relation to the initial investment. Any client with an open contract is at the risk of losses that could far exceed the initial investment."

Any British Columbia resident who has been or is involved in trading forex contracts or similar instruments for speculating in foreign currencies should contact the Securities Commission's Enforcement Enquiry Unit at 660-4938 or (toll-free) 1-800-373-6393.

The British Columbia Securities Commission is a provincial government agency responsible for regulating trading in securities and exchange contracts.

Copies of the Commission's decisions (Yuen Chow - 18 pages; London & Global - 20 pages) may be obtained in person at 1100 - 865 Hornby Street, Vancouver, British Columbia.