ASIC rates 05’s dodgiest schemes

By Ross Kelly

AN illegal scheme that promised investors returns of up to 8 per cent per week has been rated by the corporate regulator as the most outrageous financial proposition offered to Australian investors last year.

Shut down last September, the Pegasus Leveraged Options Group managed to extract almost $3.7 million from close to 90 investors with its bogus promises.

The operator of Pegasus, Craig McKim, was later jailed.

Also cited by the Australian Securitiesand Investments Commission (ASIC) in its annual ‘Pie in the Sky’ awards was a firm of London solicitors that charged punters an ‘advance fee’ to collect their winnings after they were told they would receive some of the late Princess Diana’s inheritance, and an outfit that told people they owned international shares and need only pay a fee to have the shares transferred to their name.

“The serious purpose behind these awards is to warn the public. Pie in the sky financial schemes still devastate far too many people. They frequently use sophisticated props and hard sell techniques that lure even financially experienced people,” ASIC’s acting executive director of consumer protection Delia Rickard said.

She went on to encourage investors to check the ASIC website to make sure they are dealing with licensed Australian businesses.