CSA urges Canadians to take the next step to protect themselves from investment fraud

CSA Securities

Montreal – More than a million Canadians have lost money in an investment fraud, according to recent research from the Canadian Securities Administrators (CSA). The 2009 CSA Investor Index This link will open in a new window found that Canadians feel confident and believe they are knowledgeable and responsible when it comes to investing, yet they are not taking the next steps to put their knowledge into practice.

March is Fraud Prevention Month and the CSA is urging investors to move beyond simply knowing what they should do about potential investment fraud and take the next step to protect themselves and their financial future.

“We are encouraged to see that the majority of Canadians are knowledgeable about what they should do when it comes to investing and investment fraud,” says Jean St-Gelais, Chair of the CSA and President & Chief Executive Officer of the Autorité des marchés financiers (Québec). “Unfortunately, many do not act on this knowledge, or their actions contradict their knowledge of investing and fraud prevention.

“Investors need to be aware that not every investment opportunity is right for them and that some opportunities may not be appropriate for them, or may even be a scam,” says St-Gelais.

The CSA urges all Canadians to take these simple next steps to protect themselves from investment fraud:

1. Work with your investment adviser to assess and review your risk tolerance.

According to the CSA Index, fewer than half of Canadians have worked with their financial adviser to assess their willingness to take risk. The CSA encourages you to meet with an adviser to determine your risk tolerance, and to review it at least once a year. Knowing your risk tolerance will help when deciding if an investment fits your goals and objectives.

2. Familiarize yourself with common red flags of investment scams.

Investment fraud is a serious concern. Investors should go to the CSA’s website www.securities-administrators.ca This link will open in a new window to visit the Avoiding Fraud This link will open in a new window page. There you can learn to identify the red flags of investment frauds such as affinity fraud, boiler room scams and more.

3. Research each investment opportunity and do a background check on the person and company offering an investment.

Researching each investment opportunity is important, but few investors actually take the time to complete a background check on the person or company offering an investment. Use the CSA National Registration Search This link will open in a new window to see if your investment adviser is registered to provide the services offered, and the CSA Disciplined Persons List This link will open in a new window to see if a person has ever been disciplined by a regulatory body. You can also contact your local securities regulator This link will open in a new window for a listing of any potential enforcement action against a company or individual.

4. Report any suspicion of investment fraud to your local securities regulator.

Almost four in 10 Canadians have been approached with an investment fraud, most of them multiple times. Although 78 per cent believe it’s important to report even the suspicion of an investment fraud, only 26 per cent take that step. The CSA reminds investors that if you know or suspect you have been approached with a fraudulent investment, your next step should be to call your provincial or territorial securities regulator This link will open in a new window to report the incident.

The CSA This link will open in a new window, the council of securities regulators of Canada’s provinces and territories, coordinates and harmonizes regulation for the Canadian capital markets.

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For more information:

CSA member name

Point of contact

Phone number

Autorité des marchés financiers

Sylvain Théberge

514 940-2176

Alberta Securities Commission

Mark Dickey

403 297-4481

British Columbia Securities Commission

Ken Gracey

604 899-6577

Financial Services Regulation Division, Newfoundland and Labrador

Doug Connolly

709 729-2594

Manitoba Securities Commission

Ainsley Cunningham

204 945-4733

New Brunswick Securities Commission

Wendy Connors-Beckett

506 643-7745

Nova Scotia Securities Commission

Natalie MacLellan

902 424-8586

Ontario Securities Commission

Robert Merrick

416 593-2315

PEI Securities Office, Department of the Attorney General

Linda Peters

902 368-4552

Saskatchewan Financial Services Commission

Barbara Shourounis

306 787-5842

Securities Office, Northwest Territories

Donn MacDougall

867 920-8984

Securities Office, Nunavut

Louis Arki

867 975-6587

Securities Office, Yukon

Fred Pretorius

867 667-5225

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