Pacific Continental

Pacific Continental are a company operating in the UK, and are believed to be registered with the FSA. If that is the case, doesn't that make them a legitimate operation, and if so, why are they on here?

Good questions of course.

However, despite the air of legitimacy, there are some serious question marks over the operations of Pacific Continental, which should ring alarm bells and make potential investors think very carefully, and do a very thorough due diligence before spending any money with them.

•	They are know to be selling regulation s shares, and not telling investors that these stocks are restricted. Always ask!
•	They use very high pressure tactics. Would a legitimate trader need to do this?
•	Once they take your money, well .....

Here is an excerpt of an article by Tony Hetherington from 'This Is Money', which gives serious food for thought.

TONY HETHERINGTON: “THIS IS MONEY”
12 November 2004

£5,000 shares lost in US vanishing trick

D.D. writes: My wife bought 1,615 shares in Senior Care Industries, a USA company, for $7,721 (about £5,000) in 2000. The purchase was made through Steven Griggs of brokers Pacific Continental Securities in London.

I contacted the broker recently for a valuation. The situation I found is both disastrous and peculiar.
It seems that in 2001, there was a 'reverse split'. The result was that every 30 shares became just one share, reducing my wife's holding to 54 shares. Then in 2002 the company changed its name to US West Homes, and in 2003 there was a further reverse split, so every 100 shares became one share.

Finally, the company has changed its name again, to Investco Corporation, but now, since we had fewer than 100 shares before the last reverse split, we are told we have nothing at all.

T.H.: ANYONE with an ounce of common sense would regard this as legalised robbery.

Taken to a logical conclusion, the company could consolidate repeatedly until just one shareholder remained, owning the entire business at other people's expense.

The consolidating started in September 2001, just after the property company named a new chief executive, a California real estate broker named Mervyn Phelan Snr.

Phelan's record included owning the Camino Real Savings Bank, which was seized by regulators and closed down in 1989 as it teetered on the brink of collapse. He also ran into trouble at Senior Care Industries, allegedly falsely claiming that it owned properties in Mexico worth about £40 million. A company claiming to be the true owner complained to the US Securities & Exchange Commission.

The SEC already knew Phelan. It began legal action against him and others in 2002 for alleged securities fraud involving shares in Freedom Surf, a wetsuit manufacturer.

According to the SEC, 'Phelan Snr originated the scheme to manipulate Freedom Surf stock and enlisted Allen Wolfson to carry it out.' Wolfson is a notorious fraudster with convictions going back to 1977. He is serving a sentence in a New York prison for a share fraud linked to the Colombo Mafia family.

Your wife's company, Senior Care Industries (SCI), is also linked to Wolfson.

In a share swap, SCI took three million shares in a scam company called Stem Genetics Inc, set up by Wolfson to rip off British investors. Its shares were sold through an infamous telemarketing boiler-room called the Sukumo Group, which left so many victims that they have their own self-help website, boilerrooms.co.uk.

What can you do about all this? Your wife's money is probably lost, but given that the SEC is interested in Phelan, it is always possible that some cash might be seized. It would do no harm to contact the SEC headquarters at 450 Fifth Street NW, Washington DC, 20549-0213, USA.

By now, readers with a sharp memory might wonder why your wife's broker, Pacific Continental Securities, rings a bell?

The answer is that this firm, which is fully licensed by the Financial Services Authority, cropped up last week in my warning about offshore boiler-rooms that were selling shares in a high-risk company called Atlantic Wine Agencies.

It sells these shares too, and managing director Steven Griggs admitted to me that his firm has a business relationship with Jeffrey Reade, a shadowy offshore financier named by investigators in New Zealand as the money-man behind a boiler-room stock scam there.

Griggs told me his firm's then head office in New York did make inquiries before recommending SCI shares, and that 28 customers in Britain invested over $133,000 (about £87,000).

With some frankness, Griggs also admitted that his head office 'may have received remuneration in addition to the 0.5% commission charged to clients for funds raised from the sale of Senior Care shares'.

In other words, Pacific Continental may have been paid to sell the shares to your wife.

This would be no surprise. In another complaint I received, a Financial Mail reader notched up huge losses on high-risk shares, only to have Pacific Continental admit, when asked point-blank, that it received a commission of 12.5% from the companies for marketing their shares.

Financial Mail has offered to hand over the results of its investigations involving both Pacific Continental and Atlantic Wine Agencies to the Financial Services Authority. The phone has yet to ring.

You can read the original article about Pacific Continental Securities, in its entirety, by following the hyperlink.

Anyone who has lost money to Pac Con UK should write immediately to Enforcement, FSA, 25 North Colonnade, Canary Wharf, London E14 5HS.

This particularly applies where Regulation S stocks are concerned. The key thing about these is that although investors may believe Pac Con charges a perfectly normal commission, small print reveals that Pac Con is also being paid by the company whose shares it promotes - and that fee is far higher.

There is an ongoing discussion on Pacific Continental at the Boiler Rooms UK forum, which has an extensive amount of detail on this Company.