Advertisement
YOU ARE HERE: LAT HomeCollectionsInvestors

Hollywood Firm Cited in State Securities Complaint

January 01, 1985|AL DELUGACH | Times Staff Writer

California securities regulators filed a civil suit Monday alleging that a telephone sales "boiler room" in Hollywood has been used to defraud thousands of unsophisticated investors who bought leveraged commodity contracts from a London firm.

Although investors were led to believe that they were paying for an actual purchase of such "strategic metals" as cobalt, nickel and titanium in their behalf for future delivery, the suit claimed, most of the initial 50% down payment went for "unspecified and unaccounted fees," including sales commissions.

In a typical case, only 10% of a $4,000 down payment was used to offset the actual purchase price of the metals by purchasing options for investors or other means, the suit alleged.

Highfield Commodity Corp., London, was placed in receivership by British authorities last January. California regulators said Friday that thousands of investors "appear to have lost their entire investment as a result of (its) collapse."

Its alleged agent here, Strategic Commodity Corp. of Hollywood, was named among 12 defendants in Monday's suit, along with Joseph Bettencourt, owner and president of Strategic Commodity Corp., and Hillary Marks, its corporate secretary and administrator.

No one answered the telephone at the firm's office at 6565 Sunset Blvd., and The Times could not reach the two individuals for comment at the addresses listed in the complaint.

The state Department of Corporations asked the Los Angeles Superior Court for an injunction and for restitution to investors. A hearing was set for Feb. 12.

Another defendant, Alan David Libman of Beverly Hills, was described as a principal in Highfield of America Inc., a New Jersey firm that was closed in 1983 when its owner, Dan Davis, was charged in a federal criminal case involving two other defunct commodity contract sellers.

Those firms, which are unrelated to the California case, were International Bullion Clearing Corp. and American Petroleum Exchange Corp. Libman also could not be reached Friday at his listed address.

The suit here also named as defendants Highfield of America and Davis; Highfield Commodities Ltd. and two of its principals, David B. G. Whitfield and David Harrison, and a New York lawyer, Charles J. Hecht, identified as a participant in the alleged investment scheme.

Another London firm, Noradean Ltd., was named with its owner, Martin Stewart, on allegations of selling unqualified securities in California through Strategic Commodity Corp. since last January. They were not accused of securities fraud with the other defendants.

The other defendants allegedly made false representations and withheld material facts in dealings with investors.

Among other things, the suit accused them of falsely telling investors that they could sell their metal in the marketplace whenever they chose to do so, when in fact sales by individual investors of such metals would be extremely difficult.

The suit also alleged that these defendants failed to tell investors that securities regulators had issued cease-and-desist orders against Davis in California on Feb. 4, 1980, and against Davis, Bettencourt and Highfield of America in Minnesota on April 21, 1983.

These defendants also failed to disclose Highfield Commodities Corp.'s failure to fully cover or hedge investor contracts and the number and nature of investor complaints against various defendants, the suit charged.

Advertisement
Los Angeles Times Articles
|
|
|