Is your client at risk as an investor?

Unregistered trading, investment hucksters and illegal insider trading remain among the top risks facing Canadian investors in the new year, says the Alberta Securities Commission (ASC).

The regulator published today a list of its top five investment risks for 2019, which features warnings for investors about possible scams, such as a lack of registration and the use of high-pressure sales tactics.

The list, based on information from the ASC’s enforcement department, also highlights the heightened risks surrounding new and emerging industries, such as cannabis and cryptocurrencies.

“Scam artists will often build schemes around the latest trends as there is limited information and history available,” the ASC says, “making it easier to spread false information.”

Other top risks for investors include affinity fraud—being introduced to scams by a trusted person—and illegal insider trading.

The ASC notes that it recently adopted a new whistleblower program that provides protections to industry insiders who tip off the regulator to suspected misconduct.

“Albertans continue to fall victim to fraudulent investments,” says Alison Trollope, director of communications and investor education at the ASC, in a statement. “And, looking into 2019, we want to empower them to make suitable and informed investment decisions. We periodically provide updates from our enforcement team to help Albertans understand what types of investment scams are occurring in their communities, and to detect fraudulent activity before falling victim.”

Trollope added, “Bottom line: make sure you do your homework and research the opportunity before you invest in anything.”

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.