Lismore business directors under scrunity
By Will Jackson
A COMPANY that raised more than $1.1 million, mainly from Lismore investors, has been accused of misleading and deceptive conduct by the Australian Securities and Investments Commission.
Cycclone Magnetic Engines Inc claims to be developing a commercially-viable, environmentally-friendly engine which can supply mechanical power through the use of magnets rather than fuel.
In the Supreme Court of Queensland, ASIC alleged that since March 2005 CME had raised more than $1.1 million from more than 120 investors, predominantly from the Lismore area, and that contrary to requirements under the Corporations Act, it had not issued a disclosure document.
It also alleged that CME had engaged in 'misleading and deceptive conduct' in relation to its product.
CME's directors in Australia are Robert George McClelland and Steven Vincent Foster, both of Lismore, and Michael Peter Nugent, of the Gold Coast.
Mr Nugent said he would be seeking legal advice before commenting. The Northern Star was unable to contact Mr Foster or Mr McClelland yesterday.
CME is incorporated in the USA but operates from the Gold Coast and Lismore areas.
The court ordered that, pending final hearing of the application brought by ASIC, CME and its directors be restrained from offering securities in CME without a current disclosure document and from carrying on a financial services business without holding an Australian financial services licence.
The court also ordered the directors not remove CME assets from Australia, pending determination of the application. Northern Rivers police were yesterday unaware of any complaints made against CME or its directors.
However, an anonymous critic of the company has set up a website (www.cycclone.info) claiming CME's engine is a 'fake and a con'.
"The magnetic engine purported by (Michael Nugent) to run on only magnets does not exist," says the site.
"It is all a fake and a well-planned scam to fool potential investors into subscribing to his Nevada-based company, Cycclone Magnetic Engines Inc."
A further hearing date has yet to be set.
Have you invested in Cycclone Magnetic Engines Ltd? We would like to hear from you. Call 6620 0555 or email firstname.lastname@example.org.