A company thought to be setting up business in Bermuda has been ordered to shut up shop in a US jurisdiction because it has failed to register as a securities company.

But lawyers for Global Prosperity Group have claimed that the allegations are false and that they will be fighting to clear their client's name.

Earlier this week The Royal Gazette was contacted by a Boston law firm which warned the paper should not publish information on the company because it could be false or defamatory.

Lawyers for the company implied that their client was being investigated by the Bermuda Monetary Authority.

"Our client is not operating any fraudulent scheme, nor is our client involved in the sale of securities or any criminal enterprise,'' attorney Louis Font said. "It has come to our attention that you may have been provided or shortly will be provided with information concerning our client from the Bermuda Monetary Authority and /or Emerald Financial Ltd, or others which is false and defamatory.'' When contacted by The Royal Gazette both the BMA and Emerald Financial Ltd refused to discuss the company. But a representative from the North Dakota Securities Commission, the authority that has slapped the ban on GPG, last night confirmed that, in their view, the company should not be operating.

Enforcement attorney Matthew Bahrenburg said: "They are not based in North Dakota but they are operating in the area.

"We have put a cease and desist order on them to stop them operating. That's what it's designed to do although whether it does is another question. After the first order was issued they continued to operate, so violating the order.

There are a number of avenues that can be taken and at this point things have been done on an administration level. We have the authority to initiate a civil court action and there's also the potential for a criminal referral.

Basically what they are doing here is soliciting a programme where the only way someone can get a return on their investment is to induce other people to take part in the programme.

"That fits into this jurisdiction's definition of a security company but it's not registered as a security. It's entirely legal to offer a security as long as its registered. The whole reason for registering is to protect investors.'' Nobody from the Global Prosperity Group or their lawyers could be contacted for comment.