Investigate before you invest
The Internet has made it easier for con artists to perpetrate investment scams. But you can also use it to avoid becoming a victim. The following websites contain valuable information on current investment schemes and scams, as well as how to check out any investment scheme you’re considering.
Canada does not have a national securities regulator. Instead, provincial and territorial governments are responsible for keeping tabs on investment products and the people who sell them in their jurisdictions.
^The Canadian Securities Administrator is the umbrella for these organizations. You can find the site for the regulator in your province or territory by using the OSC’s site, which contains addresses and links to the sites of other regulators. Many of these sites include updated ‘Investor Alert’ pages with valuable information about current scams.
Also, have a look at the OSC’s phoney website, www.NoRiskWealth.com, which was created from regulators’ experience of real sites set up to defraud investors. You’ll get a prettgood idea of what not to fall for.
Securities-related documents for public companies-including offering prospectuses and annual reports-must be filed with the Canadian Securities Administrators using SEDAR (which stands for System of Electronic Document Analysis and Retrieval). The website is searchable and easy to use. You can call your provincial securities commission to check on whether a salesperson is registered to do business.
At this site and in a book of the same name, Ontario-based author Les Henderson has compiled an exhaustive file on telemarketing fraud, investment schemes and consumer scams. The immensely useful site is searchable and contains links to more than 200 other sources of relevant information.
From ‘unbelievably absurd fraudulent investments,’ such as partnerships in breeding ostriches to the mainstream (did you know that people over the age of 65 are twice as likely to respond to sales pitches from Publishers Clearing House?), this is a good place to start if you’re unsure about an investment.