SEC ALLEGES CANADIAN RESIDENT USED BUSINESS AS PONZI SCHEME

The following excerpt is from the SEC website: November 17, 2011 “The Securities and Exchange Commission announced that, on November 16, 2011, it charged a New Hampshire business directed by a Canadian resident with obtaining over $1.3 million from investors in a fraudulent Ponzi scheme. The SEC also announced that Judge Joseph N. Laplante of the U.S. District Court in New Hampshire has issued a temporary restraining order that, among other things, freezes the assets of the company and its principal and prohibits them from continuing to solicit or accept investor funds. In its complaint, the SEC alleges that Henry Roche, a Canadian resident, through New Futures Trading International Corporation has been engaged in an ongoing unregistered offering of securities in the United States through operations in New Hampshire and Ontario, Canada. According to the Complaint, since December 2010 Roche has raised over $1.3 million from at least 14 investors in nine states through the offer and sale of high yield promissory notes purportedly yielding either 5-10% per month, or a 200% return within 14 months. The Complaint alleges that Roche represented to some investors that funds supplied would be invested in bonds, Treasury notes and/or 10-year Treasury note futures contracts, and to others that the funds would be invested directly in New Futures, an on-line futures day-trading training business Roche was operating from Canada. According to the complaint, instead of using the funds for either purpose, Roche used approximately $937,000 provided by New Futures investors to make Ponzi “interest” payments to investors in prior Roche-controlled entities. The Complaint also alleges that Roche misappropriated at least another $359,000 to support his lifestyle, to operate a horse breeding venture, Majestic Horses, and to buy horses. The Complaint alleges that Roche’s present activity through New Futures appears to be the continuation of an ongoing investment scheme Roche has been operating over the past three years under a series of entity names, including Masters Palace, Inc., and Third Realm Institute (a/k/a Third Realm, Inc.). The Commission’s complaint charges Roche and New Futures Trading International Corporation with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission acknowledges the assistance of the Ontario Securities Commission and the New Hampshire Bureau of Securities in this matter.”