UPDATES: (1) Colorado Boots WCM777; (2) California Didn’t Have To Look Far To Find ‘Program’: State Has Office In Same Building From Which Alleged Multimillion-Dollar Securities Scam Operated
From the Colorado C&D against the WCM777 MLM “program.”
UPDATED 6:33 P.M. ET (U.S.A.) The state of Colorado has issued a cease-and-desist order against the WCM777 “program,” saying the Ming Xu-led enterprise was selling unregistered securities.
Ming Xu also is known as Dr. Phil Ming Xu, according to WCM777 promoters.
In issuing the C&D, Colorado now has joined at least two other U.S. states in banning WCM777. The other states are California and Massachusetts. Louisiana has issued an Investor Alert. (Edit 6:33 p.m. New Hampshire also has issued an Investor Alert on WCM777.)
California has alleged that WCM777 gathered at least $20 million.
Gerald Rome, Colorado’s acting securities commissioner, announced his state’s ban on Jan. 21. Paperwork is here. Ming Xu consented to the action without admitting or denying wrongdoing.
From a statement by Rome’s office (italics added):
Named in the Order are World Capital Markets, Inc., WCM777, Inc., and their founder and chairman, Ming Xu, all of Pasadena, California.
The Staff of the Division of Securities (the “Staff”) alleged that World Capital sought Colorado investors through websites, webinars, and live presentations to purchase packages that allow the purchaser to access World Capital’s cloud media services and earn commissions or profits with advertised returns of more than 90%. The program operated much like a multi-level marketing program where purchasers received bonuses for referrals, purchase of stock options, and other bonuses based on how many referrals obtained by a purchaser.
The Staff alleged that World Capital failed to register either security offering and, by offering the investment opportunity to the public at large by soliciting on the internet, World Capital violated the registration provisions under the Act.
Meanwhile, it turns out that California didn’t have to venture too far to find WCM777.
The WCM777 MLM scam was operating from Suite 900 at 150 S. Los Robles Ave., according to a Desist and Refrain Order the state issued last week.
But the state itself has an office in the same building. The Pasadena branch of the California Department of Rehabilitation occupies suite 300, according to the DOR’s website. The agency says it “administers the largest vocational rehabilitation program in the country.”
Now, New Hampshire . . .
The state has issued an Investor Alert on WCM777:
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CONCORD, NH (January 24, 2014) – The New Hampshire Bureau of Securities Regulation is issuing an investor alert regarding three companies that were issued a Desist and Refrain Order by the state of California. The companies are World Markets Capital, Inc, WCM777, Inc., and WCM777 Limited, all based in Pasadena, California.
Since March 7, 2013, these companies have allegedly solicited the public, using the Internet and live presentations, to purchase membership units that allow access to online cloud services. Buyers were purportedly paid daily returns over a 100-day period in the form of profit-sharing, bonuses, and commissions. The most expensive and widely-purchased investment offered a 100-day return of 60%. At the close of the period, investors were allowed to roll over their investments. The firms claim their income came from various businesses, including merchant banking. However, California states that 99% of the companies’ income was from the sale of membership units.
California alleges the membership units are securities that were not registered. Also, the WCM companies made written and oral misstatements to investors that their activities were not under the jurisdiction of the US Securities and Exchange Commission or the Federal Trade Commission. In addition, the companies did not disclose that their only major source of income was the sale of membership units and that they did not have a contract with Siemens for cloud services. No findings have been issued yet on the allegations contained in the Desist and Refrain Order.
The Bureau has issued this alert to notify any New Hampshire residents who may have invested with the WCM companies. If you believe you purchased membership units or other investments or products from these companies, you should contact the Bureau at 603-271-1463.
Source: http://sos.nh.gov/WorkArea/DownloadAsset.aspx?id=51797
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Patrick
[…] and desist against Xu and WCM777. Following California’s cease and desist (January 8th), Colorado has issued their own notice and both Louisiana and New Hampshire have issued WCM777 investor alert […]
[…] cease and desist against Xu and WCM777. Following California’s cease and desist (January 8th), Colorado has issued their own notice and both Louisiana and New Hampshire have issued WCM777 investor alert […]
A woman emailed me tonight to say she was contacted about WCM777 last fall by “church members” who “would like to share good investment with me.”
The woman said she “invested my retirement money into it.”
She adds that she appears to be getting the runaround from her sponsors, who advise that the “U S government will return the money back to me.”
Whether a federal probe into WCM777 is under way is unknown.
Patrick
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