Case study magnetic engines

Ron invests in 'breakthrough technology'

Senior man gardeningRon got chatting with a man at a pub who told him of a new engine that used breakthrough magnetic technology. Being a mechanic, Ron was interested in this new technology.

The man gave Ron a business card of the engine's promoter and suggested he contact them and consider investing in this new product.

Ron called the number on the card and a couple of days later received an email from the promoter with a 'business plan' setting out details of the revolutionary magnetic engine, photos of the engine prototype and details of how to invest. 

The email said that the company was headed by an entrepreneur who was developing an engine that produced power through the use of magnets and required no fuel. The email linked to a website with a video that showed the magnetic engine working.

It also said that the magnetic engine company would soon list on the US NASDAQ stock exchange and that as a result, the price of the company's shares would increase substantially.

Ron invested $10,000 as it seemed like a great opportunity.

A year later he was contacted by ASIC and told that the promoters of the magnetic engine had made false and misleading statements about the magnetic engine technology and how the company was going to be listed in the US. They made these statements to encourage people to invest. 

The company had raised more than $1.3 million from investors in Australia. Because the investors had sent money offshore to an overseas company, they had little or no hope of getting their money back. Ron was devastated that he'd lost his money.

This case study is based on a true story. See the ASIC media release.

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Last updated: 22 Jun 2017