California Department of Corporations and U.S. Commodity Futures Trading Commission Charge San Francisco Foreign Currency Firms and Three Account Executives with Fraud.

SACRAMENTO, Calif. -- California Department of Corporations:

--Federal Court Freezes Assets of National Investment Consultants, Inc., South China Investments, Inc., Pacific Best Group Limited, a.k.a. Pacific Best Company Ltd., Run Ping Zhou, a.k.a Flora Zhou, Yi Kerry Xu, and Wei M. Tse, a.k.a. Raymond Tse

The California Department of Corporations (Corporations) announced today that on June 29, 2005, a federal court in San Francisco entered a restraining order against defendants National Investment Consultants, Inc. (National Investment), and South China Investments, Inc. (South China), both located in San Francisco, Pacific Best Group Limited, a.k.a. Pacific Best Company Ltd., doing business in San Francisco and Run Ping Zhou, a.k.a Flora Zhou, Yi Kerry Xu, and Wei M. Tse, a.k.a. Raymond Tse, all residing in or near the San Francisco bay area. The Court's order freezes the defendants' assets, prohibits the destruction or alteration of their books and records, and requires defendants to provide an accounting of all funds and assets under their control.

The court's Order stems from a joint action filed by Corporations and the U.S. Commodity Futures Trading Commission (CFTC) on June 28, 2005 charging the defendants with fraudulent solicitation and offering illegal foreign currency futures contracts in violation of the California Commodities Law and federal law.

The complaint alleges that the defendants have solicited and accepted approximately $182,500 from at least five members of the general public in and around the San Francisco bay area to participate in purported foreign currency investments. According to the complaint, the defendants misrepresented the potential profits and the risks associated with the investments. The complaint specifically alleges that the defendants told potential investors that funds were FDIC-insured, and if investments were made in cash, investors would not have to pay tax on profits, nor would they lose their initial investment. All of the known investors lost most if not all of their initial investment.

The complaint further alleges that defendants failed to disclose the lack of trading experience of the National Investment and South China account executives, and to inform investors that defendant Run Ping Zhou had previously been subject to a permanent injunction for violating the commodities law in a similar case brought by Corporations. Theresa C. Wong, purportedly the accountant for the defendants, received funds from the defendants' fraudulent activities to which she has no legitimate entitlement and the complaint seeks the return of those funds.

The Honorable Jeffrey S. White of the U.S. District Court for the Northern District of California, San Francisco Division, has set a hearing on Plaintiffs' Motion for a Preliminary Injunction for August 26, 2005.

In the ongoing litigation, Corporations and CFTC is seeking a permanent injunction against the defendants, repayment of ill-gotten gains and customer losses, and monetary penalties.

The Department of Corporations is California's investment and financing authority and is responsible for the regulation, enforcement, and licensing of securities, franchises, off-exchange commodities, investment and financial services, independent escrows, consumer and commercial finance lending, residential mortgage lending, and payday lenders. For further information or to obtain a complaint form, please visit Corporations' Web site at www.corp.ca.gov or call our consumer resource center toll-free at 1-866-ASK-CORP (275-2677).