State Commissioner of Securities Russel Yamashita on Thursday issued a preliminary cease-and-desist order against Johnston, Durden & Wise Inc. and several of its employees, prohibiting them from selling or soliciting securities in Hawaii.
Yamashita said the state opened an investigation after receiving complaints from two local residents. One resident invested $20,000 with the company.
Johnston Durden could not be reached for immediate comment.
The company's promotional materials said that it helps small European companies obtain financing and listings on major U.S. stock exchanges, the state said.
Johnston Durden told investors that it planned to go public and offered them an opportunity to purchase shares prior to the public offering, the state said. The company said its stock, priced at $5,000 per share and sold in lots of 1,000, could earn returns of 35 percent to 40 percent, the state said.
Johnson Durden also said it would make a limited offer only to "accredited investors" and urged investors to send their money "within a few hours" through express mail couriers, the state said.
Yamashita said he believes that many local resident may have been solicited by the company. The state is urging anyone who was contacted or who has invested with Johnston Durden to contact the Securities Enforcement Unit at 586-2740.