Volume II, Issue 18

This week on the June 08, 2009 edition of Fortune&Class Weekly:

• FIRS bars ETB, Spring Bank, Wema Bank – The Federal Inland Revenue Service (FIRS) has barred three banks from collecting taxes and other revenue due to the federal government on its behalf.

The banks, Equitorial Trust Bank (ETB), Spring Bank and Wema Bank were given the marching order because they refused to accede to the request by the FIRS to sign the mandatory collection agreement, a source in FIRS has confided in Fortune&Class.

According to the high level source in the revenue collection agency, the FIRS have had to introduce the mandatory collection agreement as a legal contract between it and financial institutions that desire to serve as collection agencies for it (FIRS). (read more)

Who Is In Charge Of The Stock Market? Daisy Ekine, SEC DG, Moves To Tame NSE DG, Okereke-Onyiuke

The demutualisation of the Nigerian Stock Exchange has become the standard issue to determine the agency that wields ultimate authority and control on the Nigerian stock market. Simply put, demutualisation means that the Nigerian Stock Exchange transforms into the equivalence of a quoted company with its share available to the investing public for subscription and trading.

The imagination of the investing public had been excited since since October last year when  the Director-General of the NSE, Prof. (Mrs.) Ndi Okereke-Onyiuke announced that there would be a demutualisation of the Exchange, announcing in the same breathe that she and seven senior officials of the NSE are to retire voluntarily.

According to the DG of the NSE, at a February 2009 press conference, the Council of the NSE had appointed Accenture, the global management consulting, technology services and outsourcing company to help with the demutualization and transformation of the Exchange to become profit making, she explained at the press conference that “ we have to re-orientate and transform the management and staff (of the Exchange) to look at the Exchange as a profit making company like First Bank, Unilever, Japaul and even our own Central Securities Clearing System.” …

Bank Managers Divert Customers To Black Market Lenders

Chukwuma Soludo, fmr CBN Governor

Some branch managers of commercial banks in Nigeria have become lending authorities by themselves, a Fortune&Class investigation has revealed. The activities of these managers, according to the investigation, has led to the emergence and thriving of a black market for lending which, however, has become a source of worries and consternation for customers who are protesting how they are being exploited by the black market lenders.

For each bank branch, there is the unofficial lender, operated by the branch manager with the connivance of some other bank branch officials. When a customer approaches the branch with a request to raise fund for a business, the customer is as usual, confronted with a long list of requirements to be considered before loan application is approved. …

Agagu is Arrow-Head of SW 8, Wema Bank New Core Investor

Segun Oloketuyi, Olusegun Agagu

It has been reported that barring any unforeseen circumstance, Mr. Segun Oloketuyi, an executive director with Skye Bank, may soon be named as the new group managing director of Wema Bank Plc following the successful acquisition of 27 per cent controlling shares by new core investors, SW8 Consortium, in the bank.

Until recently, officials of the bank and regulatory agencies involved in the ownership structuring of banks in the country have decidedly kept sealed lips on the individuals and interests involved in the SW8 Consortium.

To sate the going curiosity of investors that desire to take position in the bank, Fortune&Class reveal that Dr. Olusegun Agagu, former governor of Ondo State is the arrow head of other mainly political personalities behind the SW8 Consortium.

Agagu served as Minister of Power in ex-president Olusegun Obasanjo’s cabinet between 1999 and 2003 and was elected Governor of Ondo State in 2003. Agagu re-election for a second term was, however, challenged this year by Dr. Olusegun Mimiko who eventually secured the rulings of both the election petition tribunal and the appeal court panel that asserted that Mimiko was the rightfully elected Governor of the State.

REVEALED! NIGERIAN INVESTORS LOSE NBILLIONS TO ONLINE INVESTMENT SCAMS …DIAMOND CASH CLUB, GETAWAY, CLUB FREEDOM, OTHERS CRASH

Long before internet high yield investment programmes became household names in Nigeria, knowledgeable cyberspace investigators had cautioned internet users of the prevalence of scams operating in the name of internet investment schemes.

Unfortunately, it would seem that for reasons of greed and ignorance, most Nigerians fell headlong into the vortex of fraud enabled by the internet. Now, experts say billions of naira might have been lost to the many schemes Nigerian participants in these schemes subscribed to.

FORTUNE & CLASS Weekly independent investigations also revealed a connection between the internet investment scams and the mushrooming of wonder banks in Nigeria and their ultimate demise. Most of these wonder banks had collected deposits from the public and had in turn invested in these internet schemes in the hope of earning so much to be able to pay off their depositors. At the end, however, no payment was made and that, ultimately led to the wonder banks crisis.

Some other operators structured a different model for deposits mobilization to be part of the internet schemes. These go around urban centres, organizing lectures and seminars to educate and persuade more people to join their team so as to enhance their movement on the board of the investment scheme. By early 2008, a thriving sub industry had emerged around this multi level marketing based investment schemes.

One such operator is at present in serious distress, she had been able to persuade quite a number of people to invest through her in these schemes, and had, in turn invested online in the hope of the huge returns promised by the online schemes operators, but months after she made financial commitment, nothing was heard of the scheme again.

“It became a rat race.” She told FORTUNE & CLASS “I will invest in a scheme after someone I knew would have told me that they got paid by the scheme only to realize that the site had packed up some weeks after I did my registration. I soon got to know that the schemes only paid those who were first in line, so with other people like me we started looking out for new schemes, yet we were not so lucky because as soon as we registered we wouldn’t be able to access the site again. It was later that we realized that most of the schemes were operated by the same set of people. They will create new schemes as soon as they have collected money from subscribers and go ahead to set up another site, sometimes, multiple sites for the same purpose, only to announce soon after why they are encountering problem of non payment after on the site. I realized after I lost my personal money and those of other investors that all these schemes are big time 419. I am miserable now and can’t even accuse anybody for what is happening to me because it’s all online you don’t even know who you are dealing with.” The operator said of her frustration.

There are thousands of these schemes on the internet; the most popular in Nigeria are Getaway Club, Club Freedom and Diamond Cash Club. Ironically, top professionals in the country were persuaded to invest in these schemes. The schemes marketing pitches are persuasive enough, the argument for participation is hinged on earning residual income by marketing a certain product to a minimum two people who will form the down line of the initiating participant when they are registered online, by some sophisticated mathematical formula, participants are promised huge returns for merely marketing to these two people. But the trap is that these two recruits must also bring in two other participants on their line and it goes on like that. It turned out that it was a waiting excuse to wait endlessly on line for reward when a down line has not brought in people to join them. Some other schemes are not even bothered about the niceties of these multi level marketing some experts have described as intelligent fraud. These other schemes merely want the money of the participants and as soon as they have enough people registered, they vamoose from their sites.

The operations of these schemes were based on e-currencies; participants paid certain sums to be registered in a scheme with these currencies and are promised to be paid in the returns in e-currencies. The most popular initially was e-gold, for reasons that would be revealed later, e-gold gave way to Liberty Reserve, Paypal, e-bullion and some others.

It turned out that operators of the schemes and the administrators of e-currencies were different legs of the same model targeted at defrauding people that were intent at getting rich quick. When administrators of e-gold announced at any time that they had confronted problems on their sites, it was a good excuse for investment schemes operators to provide an excuse of known payment such that soon afterwards their websites are erased from cyber space.

In this review, FORTUNE & CLASS Weekly reveals how the online investment schemes operate for the purpose of scamming participants.

GETAWAY CLUB AND DIAMOND CASH CLUB

The Getaway Club and the Diamond Cash Club operate on different propositions. Getaway Club markets travels while Diamond Cash Club markets diamond. A participant is registered in the Getaway Club scheme by purchasing the Getawayclub Platinum Pass for $230 that also qualifies participants as Marketing Consultants.

You are issued with a password protected “travel site.” You are also automatically placed into our rewards system as a Getawayclub Marketing Consultant. Participants are promised a return of $20,400 for being part of the scheme.

Participants join the Diamond Cash Club by buying $300-value Gemstone voucher for $200. The participant is told he or she only needed to sell two Gemstone vouchers (such adds two people to his/her downline) to start moving his or her position in the system (the targets).

First you start with the Sapphire target, after cycling out of the sapphire target you enter the diamond target and you get your $200 back.

The Diamond Cash Club explains in detail the typical multi level marketing formula for standing in line to earn as much as $8000 over and over again.

“Targets are split in 4 levels with 1 member on level 1, 2 on level 2, 4 on level 3 and 8 on level 4. New members will enter on level 4 and each time level 4 is filled by the efforts of all members on the target. Yep, all of them will be working on filling those 8 positions. Thus when level 4 is full, the target will split and positions will move one level up until someone reaches level 1. Then the next move, he or she will enter the next target. If they were in the Sapphire target, they will move to the diamond. If they were in the diamond target, they will move into another diamond target. This is called cycling a target.

You only cycle the Sapphire target once, and you get your $200 back . The first time you cycle out of the diamond target, you will get $8000 cash and a $6000-value Diamond. However, new members signing after the 29th of August 2007, will have the choice of replacing their $6000-value diamond with $6000 cash, that is a total of $14000 in cash for cycling the Diamond Target for the first time. Then next time you cycle out of the diamond target, you will get $8000 cash. Thus you can win $8000 over and over without having to pay any extra fees.”

However, way back in December 2007, an online investment scheme investigator, writing under the brokerjone tag, had revealed the deception in the operations of Getaway and Diamond Cash Club in a report he posted on the site of autosurfing.com

The report revealed that both Getaway and Diamond Cash Club were operated by the same organization on the same server that had hundreds of “gay porn” sites on it. The hosting internet service was based in Newzealand. The investigator also noticed that the contact information for The Getaway Club…and Diamond Cash Club….were exactly the same: This was shown through the domain details as provided by WHO IS (an online store of domain names detail of registers). Diamond Cash Club was registered by Lee Consulting Limited of 603 Ruttonjee Centre, 11 Duddel Street, Central Hong Kong, Hong Kong
The investigator also asserted that all of the initial posters that were hyping up The Getaway Club, Diamond Cash Club, and 6 Star Travel Club were all from the same source in Australia.

It is the character of these schemes to float common community of participants under different teams, all wishing to recruit as many people as possible into their teams with the promise that the more recruits are made the earlier individual circles out to receive their rewards.

These teams get on internet forums to popularize the scheme through creating threads that discuss the benefits of the schemes, and as investigators found out, there will always be a monitor or group of monitors that constantly update the particular forum of activities of the scheme especially that of payments which are made to him/her or to a certain individual that no other members of the forum may be able to identify.

In the Getaway and Diamond Club under review, the investigator revealed that all original hype posters on (internet) forums originated from the same area, AND all in the same teams like Megablast, Phoenix Rising, Team Xler8ters.

“One “team” that I’ve seen posting the most is this Phoenix Rising team. They started in Diamond Cash Club…hyped it up, jumped into 6 Star Travel club within a month, and now Paullette one of their “leaders” is starting some Ammteam.build.” The investigator observed.

These “leaders” are nothing but corrupt and greedy cheerleaders trying to suck you into a giant Ponzi Network all run by the same anonymous Admin Team, that are obviously so morally challenged that they are hosting their service on a server with hundreds of Gay Porn Sites.” The investigator concluded

The revelations of this investigation have recently been appreciated by some Nigerian participants in the scheme who had been waiting to no end to circle out of the boards of these schemes.

CLUBFREEDOM A participant is registered in the Clubfreedom scheme at a cost of $200 and gets a $6000 reward when such circles out of the board. A participant that circles out monthly gets $72,000 per year while one that circles out weekly gets $312,000. Like both the Diamond Cash Club and Getaway, participants have realized the follies of their involvement in the scheme.

E-GOLD When in April 2008, MMG, an online advertising forum for High Yield Investment Schemes announced that it was no longer going to accept e-gold as payment for advertising or membership upgrades, not a few avid online investment schemes participants feared that the worst might be in the offing.

MMG had explained in the notice that “it has been a very long and difficult journey with e-gold since April of last year. We had our original accounts blocked for no reason. And even though we have fully complied with all of their requests, they remained blocked indefinitely. Every account we have opened since April 2007 has been blocked within a month’s time. Needless to say, we are extremely frustrated, and we know many thousands of our members are as well… e-gold simply isn’t a reliable currency any longer.”

The MMG announcement in fact, heralded the crisis that would soon consume the world of cyberspace investment schemes. By July, 2008, the issue was in the open; the US Justice Department had located the contact of e-gold and had slammed a case of money laundering on it. Soon, after, it was announced that e-gold, the e-currency that had at one point in time enjoyed the status of international platform of exchange and trade in cyberspace, was bankrupt.

Of course, when a company is declared bankrupt, its assets are sold to offset creditors liabilities and other commitments, but in the case of the owning company of e-gold, the registered capital of the company was a mere $20,000 with assets that can be easily added up by a kindergarten pupil; computers and office furniture. What this translated into was that those using e-gold as their store of value had lost. It was also a waiting excuse for investment schemes operators that had not been paying rewards to their participants.

LIBERTY RESERVE In the same advertisement rejecting e-gold, MMG had advertised that in an attempt to make its transition from e-gold to other online currencies payment as painless as possible, “ANY advertising purchases at MMG made with ebullion, Liberty Reserve, or wire transfer will be discounted an extra 10%, except those purchased through the MMG Auctions.”

In short, the demise of e-gold led to the rise of Liberty Reserve as the popular form of e-currency. But again, Liberty Reserve has its own limitations, online investment operators and participants protested constantly that it was always under attack by computer hackers which makes its site goes down constantly with consequences on the operations of scheme operators.

E-commerce Journal, an online journal that reports the activities of High Yield Investment Programmes noted that …”investors in HYIP-industry complain that they are facing big problems with money transfers to hyips (through Liberty Reserve)”

Besides, e-commerce journal also reported that investors were complaining that money has been written off from their account without reaching the addressee’s account while account history contains records of the last three days only. The implication for High Yield Investment Scheme, in the consideration of e-commerce is that most HYIP operators took advantage of the Liberty Reserve problem not to pay:

“We received complaints that hyips like ROInv Ltd, sus909, and suresurfpro are still not paying, and even  hot hyips like Brics Fund and The Stoic are also having pending withdrawals issue. We are not sure what the problem is and what other excuses the admin will create to delay the payment.” E-commerce journal noted

NIGERIA MILLIONAIRE CLUB Not wanting to be left out in the internet investment fraud schemes, some Nigerians also floated the Nigeria Millionaire Club under the operating name of Family Freeodm Club. An online proponent of the scheme sold the concept on the fact that: “It is an entirely new program which has revolutionized the way home business is been run online today. At Family Freedom Club, things are easier and the pay is exceptionally higher. The advantage of earning $16,788,732.80 every year makes Family Freedom Club a must for all who desire success.

“The Club is also out to help people around the globe achieve their dreams.  In this Millionaire Club you will earn “$16,788,732.80 + USD!” bonus for every direct referrals and indirect referrals. You don’t need to sponsor before you get paid but if you can introduce at least 2 people to the club it will only speed up your chance of getting the $16,788,732.80.

“Family Freedom Club is also the only 3 in 1 program in Nigeria today, that is, as a club member you have the opportunity of becoming a millionaire in the next 6 to 12 months, the chance of making friends from different part of the world and the chance of advertising your product free on the net through 54 major search engine include Yahoo, Google and MSN. If you are ready to join the Millionaire group, check out the site at http://www.familyfreedomclub.com.”

Some participants in the Family Freedom Club have submitted on other online forums that they had been short changed by operators of the family freedom club.

E-PLATINUM CLUB Another internet Investment Scheme that caught the attention of Nigerian participants is the e-platinum. In fact, the e-platinum declared that it has an administrator in Nigeria, this is an allusion to the influence of Nigerians on cyberspace investment schemes.

The site of the scheme tells the marketing pitch of the scheme.

“Combining the power of mass purchasing and discounts, and a team of highly dedicated administrators, IT and marketing personnel, ePlatinumClub is the business opportunity that will set standards in value and compensation that are yet to be achieved.

Our plan gives all members the opportunity to earn a recurring income and enjoy savings across various products and services globally.

With a registration fee of $175, participant is promised a reward of $4,175 over and over again. The operators of this scheme canvassed its difference from other schemes.

“Our program is based around the traditional 2×2 matrix; however, we have many key differences:

1. There are only 11 members in every board.

2. The bottom line of each board only has 6 people (unlike the traditional 8 many programs adopt).

3. We have just TWO boards!

4. You can join a Next In Line (NIL) team (whereby each member receives two qualifiers as the team grows).

Due to the speed at which our members can cycle, we are confident that members will cycle through our boards quicker than any other program available!

When you signup for ePlatinumClub, you will be placed in the first board at the bottom level. As your downline grows, you will move up in the board to the top.

Upon cycling the first board, you will receive YOUR MONEY BACK from your initial signup – almost a guarantee you won’t lose! You will then be placed in the top board which receives a massive $4000 upon cycling!”

For all it avowal to being different, however, e-platinum has not been paying to participants has promised.

OTHER INVESTMENT SCHEMES THAT HAD PACKED UP

Business-is was launched April 29^th. It only operated for about three days to May 2^nd. It offers three types of plans which are 12%, 14%, and 15% daily. It stopped paying since May 2nd. It claimed that its e-gold account had been blocked.

Bs-investment… Just scam Bs-investment announced its cyber presence on February 7th and claimed to offer a few different types of low rate of returns which are 0.17% – 0.34% daily, 0.02 – 0.08% daily, 25% monthly, 17.5% monthly, and 10% monthly.

But about a month after it commenced operations, in March, precisely, it claimed that its e-gold account had been blocked and announced on its site that it stopped paying to participants because of the blockage.

Teriosinvestment Terios investment was floated online on May 18th and offered two types of plans which are 25% daily for 6 days and 150% after 1 day. Only after four days of running, Terios investment suddenly stopped payment, according to online participants that had deposited funds to participate in the six days plan, on May 22^nd. Those that registered for the 150% one day plan said they did not receive payment for their investment.

Skyeclub Skyeclub commenced collecting deposits from participants on March 14^th, 2008, it offered a single 15% daily returns on investment for 10 days plan. Participants said they have not received payment since May 20.

Forex Money Maker Forex Money Maker offered three types of plans; a 130% on investment after one day, 170% after two days and 10% daily for 180 days. Some few days after it was floated, participants complained that their deposits were not even crdited to their account. Despite this, operators of the scheme were said to play smart by hiring people to make deceptive posts on major public forums talking about how good Forex Money Maker are.

ROIclub ROIclub was loaded on April 1^st and offered three types of plans; a 22% daily earning for participants for five days, 120% after five days and 150% after 10 days. Two months after commencing operations, however, it stopped payment.

The administrator of the site initially excused its inability to pay to the down Liberty Reserve site, when Liberty Reserve started running, however, it still could not pay.

Unique-Forex This HYIP announced it online presence on July 8^th, 2007, offering multiple plans which consisted of minutely, hourly and up to 260% returns on investment after three days. The administrators of the scheme made it popular by paying to its selected representatives only. It is said that the administrator also hires a bunch of paid posters to make fake paid posts on public forums. But when it was time for paying reruns, the site switched off its automatic withdrawal feature of its site. The instant withdrawal feature was disabled on January 2nd and payments went pending ever since then till now.

Fast-fx Fast-fx is undoubtedly a class act in scamming. It started on January 1st and offered 2.4-% to 3.1% hourly returns for 48 hours, and 110% to 120% after one day. Interestingly, it closed shop after one day of collecting funds from participants.

Sectiontraders Sectiontraders commenced operations in September 2007, with what is described as low returns on investment plans of 1.5% daily for 60 days, 2% daily for 90 days and 2.5% daily 90 days. Online investors were attracted to it by its seeming realistic ROI but by December of the same year, it had stopped payment just as many participants said deposits were not even credited.

E-Lifepro E-lifepro came online last year’s October, offering hourly plans as well as daily high rate of return and short time frame type of plans of 5% , 7%, 9%, and 11% every 3 hours for 75 hours and 110% – 350% after 1 day to 7 days respectively.

Though e-lifepro’s threads on public forums were full of paid posts, participants on different forums insisted that they had not been paid over a long time. Besides, other cross checks showed that the site administrator also sends spam emails offering new plans of high rate of return of between 400% to 740%. The administrators also offered 5% – 20% bonuses to lure players to deposit money into the obvious scam.

Blue-share Blue-share was introduced online 29^th September, 2007, though considered a high yield investment programme that offered unrealistically high returns, it operated for about four months before participants started getting signals of the true intentions of the operator.

Blue-share promised returns on participants investment of 11% to 14% daily compounded for 11 days, by February this year, Blue-share was reported to be paying returns due only to selected monitors (canvassers that represent its interest on public forums). It had since folded up, however.

FOREXCO.us Perhaps because Forexco.us offered low returns on investment of 1.5%daily compounded over 250 days it was able to sustain the scam over a longer period. Forexco.us was able to sustain its presence in cyberspace because it was able to pay its monitors over a longer period of time. This helped the Forexco.us thread to be active on public forum with posts claiming to have been paid. This no doubt, lured some more unsuspecting participants to the scheme.

But at the moment, the scheme is dead to cyberspace.

Financial-network-investment Financial-network commenced operations in September last year offering low return on investment plans of between 1% and 3% daily. It however stopped by paying before the end of 2007, this was o the excuse that its site had been attacked by hackers; the operators of the scheme had posted on their site the need for them to wind-up temporarily to rework the site from the activities of hackers which according to them did not allow them to pay participants.

The next news old participants of the scheme heard of the scheme were through a monitor that inundated different public forums of his being paid. This apparently lured some new participants to the scheme. They were unlucky, because by January this year, the operators had disappeared.

Cap350 This is another ambitious investment high return promising scheme. Floated June 6^th, it offered 350% payment on initial deposit within 24 hours. Participants rushed into it but non according to investigation were paid.

The operators were very smart and dubious. They displayed fake paid out statistics on their site and updated this daily with details of payments to participants which later were found to be lies. The participants could not find of any such payments in their accounts. After a while, the operators blocked access to the website by some of the participants and then, all together just disappeared.

Invest4moremoney Invest4moremoney was an obvious scam but not many participants gave serious thought to this when the programme came online on September 12^th 2008. It offered, perhaps, the highest rate of return on investment, it promised to pay a 700% on a minimum registration deposit of $5 and 1,500% after two days. For instance if a participant’s deposit the minimum amount of $5 for the 700% plan such must be getting $35 after 24 hours while a deposit of $20 for the 1500% plan should get the participant $3000 after 48 hours.

It turned out that none of the participants in this scheme got paid though the operator kept paying to monitors that posted news of payment on public forum to lure more participants to the scheme.

Bermouda This scheme which started May 22^nd this year offered participants a vacation on the Bermouda Island and huge promised returns within short investment period. Bermouda promised a 350% payment on deposit after one day, 1500% after three days and 10% hourly for 24 hours. Trackers rported that the operators did not pay any of the participants even as their deposit paid was not recorded in their membership account.

A participant reported that the operator sent him an email requesting for more deposit if he wanted to receive his outstanding payment while some other participants complained that the operators deleted their accounts without any reason and that they could no longer log into the site of the scheme

Promohaven Promohaven operators stopped paying promised returns to members since the beginning of June this year. The investment scheme ran for about five months and offered a mix of medium and small return on investment. It offered to pay 9% daily for 13 days, 5% daily for 25 days and 1.5% daily for 90 days.

E-commerce journal reports that as of end of May, the website was down for a few days and the admin said that it was caused by hackers attack. When the website was up again, the pay out problem started. “The admin started to make pay outs selectively to small amount withdrawal requests and to the monitors only.” The online journal noted.

The operators also run other programmes at the same time and all of them have turned to scam now. They are surfwithdoves.com and mysurfads.com.

Pathway-2-prosperity (P-2-P) Pathway-2-properity started inviting people to invest on February 1^st 2007. It offered low Return On Investment plans of 1.5% daily for 7 days, 1.75% daily for 15 days, 2% daily for 30 days and 2.5% for 60 days.

However, by October 2007, there were issues of non payment of returns. Some participants’ accounts were blocked without explanation while deposits were missing and not updated into their accounts.

Despite various complaints on October 31^st, the operators announced they were increasing the minimum deposit to $100.

Capital Investment Group.us The operators of capitalinvestmentgroup.us stopped paying in the early days of November 2007. Capitalinvestmentgroup.us which started on October 22^nd, offered hourly ROI type of plans.

According to participants, the operators stopped paying after they received partial payment. Most participants have experienced missing payment and their deposits didn’t complete the cycle.

Burst Profit Burstprofit started on November 29^th 2007 and offered190% returns after one day, and 240% after two days. Participants explained that initially, the operators made selective payment to the first depositors only. But when they reinvested, they lost all their money. By December, 2007, the operators had disappeared.

State Invest Stateinvest’s e-gold account was placed on limit on September 10^th, 2007. The scheme crashed within its first month of operation. Stateinvest offered 120% to 156% after one day, 165% to 214% after three days, 210% to 273% after five days and 260% to 338% after seven days.

Prior to disappearance, members have had to face several problems with this programme. Some members had experienced missing deposits and accounts were not updated with daily profit.

Monitors also had bad experiences with this hyip when they didn’t receive their referral commission other than pending payments.

Frost Gold Fund Frostgoldfunds was streamed online in July 2007 and offered three types of plans of 9%-10% daily for 14 days, 4%-5% daily for 45 days and 0.8%-1.2% daily for unlimited days.

Participants, however, said they started encountering payment problem by August 2007. The problems also included missing deposits. Soon after, the site simply disappeared.

WONDER BANKS DEPOSITORS REFUND…CBN WAITS ON 17 RECEIVING BANKS FOR PAYMENT

The Central Bank of Nigeria has commenced the final processes to refund sums of money deposited by investors in pyramid schemes operating as fund managers that had, since July this year, declared as illegal fund managers by the Investment and Securities Tribunal (IST).

The CBN had in a letter of 15 October, 2008 signed by T.A Ikuyeju on behalf of the CBN’s Director of Banking Supervision, had given 17 commercial banks a maximum seven days, last week, Wednesday 22 being the last day, to forward to it (CBN) the account details of 28 companies now referred to as wonder banks.

The details of the account requested by CBN to assist it determine the status of all the investors’ fund according to the memo include the account numbers, number of accounts held, branches they were opened, names and addresses of the signatories to the accounts, the balances as at 4/12/07; 31/12/07 and 30/9/08.

The 17 Banks which also include a non banking financial institution that were listed as being repositories of funds from the wonder banks are: Access Bank, Diamond Bank, ETB, First Bank, FinBank, Guaranty Trust Bank, Stanbic IBTC, Kakawa Discount House Limited, Oceanic Bank, Sky Bank, Spring Bank, Sterling Bank, Union Bank, United Bank for Africa, Unity Bank, Wema Bank and Intercontinental Bank.

However, the prospect of a speedy verification of investors’ status by the CBN may be limited by the ability of the commercial banks to forward the account details of the wonder banks to the CBN as directed.

A source in the CBN told FORTUNE & CLASS Weekly by Thursday last week that about ten of the commercial banks were yet to properly hand over the details as required.

“Though we have not yet started in-depth analyses of the details the banks have sent to us, our preliminary review shows that most of the details are not updated as we required, which may slow down our job.”

The source informed that the CBN is willing to quickly dispense with the refund to depositors in view of the CBN Governor’s empathy with unfortunate investors that had their money tied down in the wonder banks.

While sounding optimistic of the capacity to conclude the verification within the shortest possible time, the source, nonetheless, explained that many depositors in wonder banks may not be able to get a refund of their deposits.   

 “The officials that sieved through the claims of wonder banks submitted to the inter-agencies committee set up by the government to receive petitions and claims by Depositors earlier in the year found that many of the depositors, in fact, deposited their money through agent investment schemes that were not among the 28 that the IST froze their accounts in December, 2007. For this category of depositors there is little the CBN can do to refund their money because their claims and the details available with the CBN will not match.” The source said.

Besides, the source further warned of the possibilities of confusion arising from the mismatch of details forwarded to the inter-agencies committee by depositors and those available to the CBN through banks and the wonder banks operators.

“I think it is important that depositors track the operators so that they can help them put their documents together properly. This is to enable them (depositors) present reasonable explanations to the officials that would handle the verification if it turned out that there were mix-ups in the details like names, dates deposits were made, bank branches payment were made and the authenticity of the receipts they collected after submitting their tellers to the wonder bank operators. The fact is that we have realized that there are different receipts for same transaction types for some particular wonder banks.” The source confided.

Wonder banks had flourished over a period of three years up till about November last year on the tempting offer of making more than 500 percent returns of deposits to participants in what investment experts describe as pyramid schemes clothed in exotic investment propositions like Forex Trading, Fixed Odd Betting and hedge fund investment.

Most participants in the schemes were persuaded of the legitimacy of the schemes because the operators presented the scheme as a joint venture between them (wonder banks) and commercial. Mostly, a participant was required to pay directly into a designated bank account in the name of the wonder bank domiciled with a reputable commercial bank, usually with a customized teller.

The Securities and Exchange Commission had, in response to public outcry when the wonder banks started failing in their payment dues, usually qualified as profit on deposit in an operational week, clamped down on their operations and instituted a suit against them in November 2007, accusing them of soliciting, advertising and inviting the public to deposit funds with them.

The 28 wonder banks on trial before the IST are: Art Master & Co. Ltd; Cyber International Ltd; Fortune Access Interlinks Network; Gold Power Unique Services Ltd; Gorutrans Nigeria Co. Ltd; Interglobal Investment Ltd; Money Field Ltd; New Freedom Diversified Investment Ltd; Open Gate Multipurpose Investors Ltd; Orion Express Global Services Ltd; Pennywise Investment Ltd; Positive Move International Nigeria Ltd; Precious Golden Profile; Real and Cool Wealth International Ltd; Shola Olanrewaju Ayinke (Sefteg Nigeria Company); Silvertrust Global Investment; Successpoint International Investment Ltd; Torid Investment Ltd; Treasured Fund Assets Ltd; Vikel Petroleum Ltd; Wealth Concepts Global Ltd; Wealthgage Multibiz Int. Ltd; Wealth Interlink Agency Ltd; Wealth Solution Ltd; Wealth Transfer and Logistic Ltd; Wilson O. Wilson (Doing business in the name and style of Wilamas Ventures); Wisdom Investments Nigeria Ltd; and Nospetco Oil and Gas Ltd.

WILL THE STOCK MARKET EVER RECOVER?

Many investors have sat and watched in bewilderment as the value of their stocks plummeted, a reason I have been asked over and over if the stock market will ever recover from the losses that have been accumulated over the past eight months. To be specific, investors have lost nothing less that three trillion naira in terms of paper losses alone. I said paper losses because the losses you see in your portfolio are not real until you give a sell order to your stock-broker, stocks are volatile assets whose value can change within a few trading days.

REASONS FOR THE PERSISITENT DECLINE

 1.   LOW INVESTOR CONFIDENCE: The bearish market which started in March has eroded the confidence of many investors, especially, those who entered into the stock market within the past two years. The peculiar thing about these new investors is the fact that a lot of them see the stock market as quick money making venture, and as you know, some of them have never witnessed such a long bearish period as we have witnessed within the past few months. It is also noteworthy that several investors had just begun to recover from the losses they sustained from wonder banks like Nospetco, Sefteg, etc; in 2007. I remember that such investors were condemned for being too greedy by stock analysts and they were admonished to limit their investment to stock market alone. So, at the beginning of 2008, we experienced a massive exodus of investors from the wonder banks to the stock market, but alas, the stock market has been crashing which have made such investors to resign from the investment world. This is no good news for all stakeholders in the market because all over the world, the confidence that investors have in a market determines how successful that market is since they are the ones who move the imaginary hand of demand and supply at all times.

 2.   POOR IMPLEMENTATION OF POLICIES: Our regulatory agencies should take one or two punches for the current situation of things because they have been slacked in their approach to recent developments in the market. A stakeholders meeting was finally called on the 26^th August to find solutions to the current situation after six months of a bearish market. Since then some of the policies that were identified have either not been implemented or simply relegated to the background. The most important of this is the creation of a stabilization fund to stem the bearish trend whenever necessary, I don’t know how you look at it, but from my point of view, I think this issue should have taken priority over other policies because without funds that are needed to buy stocks, the stock market can simply not move, it’s as simple as that.

Dear friends, gone are those days that fundamentals count and investors are motivated to buy shares because of good quarterly and audited results published by companies. Investors are not moved by results again and if you want to contradict this argument, check what has happened to the likes of Fidelity Bank, Oceanic Bank, etc; since they declared their fantastic results. The truth is, things are not normal and desperate situations require desperate actions. In addition to this, the authorities have not addressed the investing public since August 26. I have reasons to respect the American spirit better within these past few weeks that the Americans have been hit by an unprecedented financial crisis. Within two weeks, the president of the USA, the Senate president, speaker and federal reserve chairman have addressed the American public four good times trying all they can to update Americans on the situations of things and the way forward but it’s not like that here, investors are always left guessing.

Another controversial policy is the introduction of a minimum one per cent drop in prices while allowing stocks to gain a maximum five per cent in a day; this has caused what some investors call a slow motion in the stock market, a situation that has made the sale of stocks even more difficult than in the past, this was supposed to be a temporary measure but I think it’s here to stay. The list of the number of inefficiencies from our regulatory agencies cannot be exhausted in one piece of article, it is better left as it is.

3.   GLOBAL FINANCIAL CRISIS: the Nigerian crisis actually preceded the ongoing global financial crisis which started in the USA with the collapse of big banks like the Lehman Brothers, Merrill lynch and WAMU. Stock markets all over the world are currently taking the beating of their lives. As a matter of fact, the Russians had to shut down their stock exchange for two trading days in September in order to arrest excessive decline in stocks. Last Thursday afternoon, I saw some investors protesting in the legislative house in Hong Kong because of the losses they have made on their portfolio. Don’t mind the CIBN and CBN which recently came out to say that we are immune to the global financial crisis; the truth is that we are not immune and I will state my reasons.

First, recall that we had touted the entry of foreign institutional investors who were planning to come into the Nigerian market as one of the factors that will lead to a bullish market in 2008, but at present, the JP Morgan, Merryl Lynch, or Barclays of these world won’t come into the Nigerian market for now because they have serious problems to contend with back at home. In fact, Charles Soludo, Governor of Central Bank of Nigeria recently shifted the blame for the recent market drop to some of these foreign investors who have pulled their funds out of the Nigerian stock market.

Despite all these challenges, it is not all gloomy for the Nigerian market because there is always light at the end of the tunnel, this market will definitely recover soon and the road to recovery will form the central theme of my article in the next edition. Watch out for it.