The company-pyramid, which has been filed an action by the authorities, is believed to have concentrated almost £20 million, sources revealed on Wednesday. According to StockWatch sources, a large number of investors have been trapped by the company, which is unable to return their initial capital. The company is accused for carrying out banking operations without the Central Bank’s permission. The first hearing was held on February 3 in Limassol.

The authorities preferred to freeze the Company’s assets, since there are no £20 million in the bank accounts. It is estimated that the bank accounts have no more than few hundred thousand pounds.

Web Fortune – the company – is based in Limassol and is actively involved in the sale of goods via Internet. The company offered yield of up to 30% on the initial capital in a year. Web Fortune is run by a Lebanese businessman, who has the Cypriot citizenship. StockWatch tried to contact certain officials, but efforts have been unsuccessful. The Central Bank was also unavailable for comment.

SEC urges for caution

Invited to comment on the issue, a SEC official said that the Securities and Exchange Commission’s policy is to urge caution on investors. “In certain cases, they should seek the advice of experts or the competent authorities”, he said

Similarly, Chairman of the House Finance Committee, Aristos Chrisostomou told StockWatch that there is a need for certain amendments in the legislation.

Web Fortune

It is worth noting that authorities had once visited the company unexpectedly, after having concentrated loads of office material and electronic data. In September 2003, the Economic Crime Unit had requested by 11 banks to give data on the account activity of seven legal and natural persons related to the company.