The Canadian Securities Administrators; a group representing all the provincial and territorial securities regulators published the five most common traps used on Canadian investors.
1. Illegal sales of misleading exempt market securities. Legitimate businesses are given the opportunity to raise funds by selling their shares to a small number of investors. Unfortunately, scam artists illegally raise money by offering misleading securities that often promise guarantees or unrealistic returns with little to no risk. These individuals are often not registered to give investment advice or sell securities.
2. Energy Investments. Investors are often lured into investing into untapped oil and gas reserves and/or new energy technologies. These scam artists use complex technical jargon and industry language to impress and confuse investors.
3. Gold and precious metals. Even though precious metals have been the shining star of the markets lately, they are not a sure thing. Investors that are given the promise that they are buying a ‘tangible’ asset that will ‘never decrease’ in value should be aware there are no guarantees, even in legitimate markets.
4. Affinity fraud. Marketing a fraudulent investment scheme to a large group or organization continues to be quite profitable for fraudsters. Always do your homework, and evaluate the investment based on its underlying merits, not on the recommendations of your friends and family.
5. High risk or false FOREX schemes. Con artists play on the complexity of trading in foreign currencies to impress or confuse investors; these markets require a lot of knowledge and resources not available to the average investor. In some of these fraudulent schemes investor’s money is never even invested as promised; it is simply stolen.
Remember, if it sounds too good to be true, it usually is. If someone approaches you with a scheme to make a lot of money, step back, do your research and know the risks.
As always, don’t hesitate to call and ask me if you ever want a second opinion on an investment being offered.
Have a great weekend
Tracey
Source: CSA press release, October 24, 2011
No comments:
Post a Comment