IAN MCILWRAITH July 31, 2012
According to ASIC, not only are Pousa and his group not licensed to offer financial advice, but the company that handled the trading, does not have a license to deal in foreign currency.
INVESTORS in an allegedly unlicensed financial advisory group, that is being investigated in four countries, may have lost up to $70 million in a single day's trading in May.
Senen Pousa, sole director of Investment Intelligence Corporation and its ProphetMax business, last week was prohibited by a Queensland court from leaving Australia and, by consent, agreed to the freezing of two bank accounts containing about $3.4 million.
Insider yesterday tried to contact Pousa on his mobile, but did not hear back from the Byron Bay resident before publication time.
Angry investors have set up both a Facebook page and a blog dedicated to detailing the activities of Pousa and IIC, as well as some of their international associates.
The Australian Securities and Investments Commission last week took Pousa and IIC to Queensland's Supreme Court. ASIC said that some 3000 people appear to have been involved with ProphetMax, and that it was working with investigators in the US, the Netherlands and New Zealand to unravel what occurred.
The trigger for the scrutiny of ProphetMax seems to have been investors waking up one morning in mid-May to discover that a series of trades overnight had cost them 63 per cent of their funds.
Many of the investors claim that not only were they shocked by the losses, but the frequency of the trading because ProphetMax had been pitched as a strategy where there would be trading only twice a month, only a handful of trades at a time - and a maximum of 3 per cent of capital at risk in the dealing.
One investor who spoke with Insider yesterday said she had only just opened her account, which required a minimum $US10,000 balance, a day before the May losses. She said investors had been told that Pousa's group normally only dealt with clients having a net worth of at least $10 million, and that small investors like herself had all of their investments pooled into a single account to create a similar-sized trading account.
According to ASIC, not only are Pousa and his group not licensed to offer financial advice, but the company that handled the trading, US-based Global Forex Management, does not have a licence to deal in foreign currency in the US.
Insider understands that, in late May, Pousa hosted an online Question & Answer session with Global Forex's head trader Kevin Clarke, who blamed the losses on technical glitches and his own ''fat finger'' error of adding an extra ''zero'' to contract sizes.
The Elevation Group, a Texan web-based investment promotion company headed by Mike Dillard, introduced Pousa to its clients in a February webinar. In June, Dillard posted a statement on his website saying that he had started a class action against Pousa and IIC, and asked his clients to submit their claims. Insider is yet to hear back from Dillard's lawyer on whether that action is going ahead.
CLIVE Palmer has been told that until he makes a full, and higher, bid for Coolum Resort timeshare company The President's Club - he cannot vote his controlling holding, or deal in the shares. The Takeovers Panel last week declared unacceptable the behaviour of Palmer and his company, Queensland North Australia, in acquiring control of the timeshare company from Lend Lease a year ago.
Now it has forbidden QNA or Palmer selling or buying any further shares without the panel's approval - apart from one transaction where Palmer himself is apparently in the midst of buying Lot 64 from one of his associated companies. Not only can the Palmer interests not deal in President's Club stock without making a formal takeover offer - the Panel said the bid had to be accepted by more than 50 per cent of the remaining shareholders.
The affair was referred to the takeovers regulator by the independent directors of The President's Club, who argued that QNA and Palmer had breached public company takeover laws in several ways. The Panel has declared that even though there were voting restrictions on the first 41 per cent of President's Club when QNA acquired control of the stock last July, that did not relieve it of the normal obligation to make a takeover offer for a public company when buying more than 20 per cent of the voting shares.
While QNA has proposed making a bid for the shares, the offer price it has flagged is below the highest price, $65,013, it paid other timeshare investors for their interests in March. Investors in The President's Club each own 13 shares plus a one-quarter interest in a villa at the resort, so the offer is $1 a share and the balance is for the villa stake.
The Panel has agreed with the President's Club board that any takeover offer from QNA has to be pitched at that level, rather than the $55,013 indicated in a yet-to-be-dispatched offer document. QNA's offer documents argued that its bid price was a hefty premium because it was 28 times the theoretical $1900 per villa unit paid for Lend Lease's interest.