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A global trend of online investment scams is robbing Albertans of their “hard-earned money,” says the Alberta Securities Commission (ASC)’s director of Enforcement.
“Starting early in the pandemic, we saw a huge proliferation in online investment scams, not just in Alberta or Canada, but globally, and they’re not going away,” said Cynthia Campbell, announcing the launch of a new tool, a public “investment caution list” published on the ASC website.
The warning list will name unregistered individuals and companies “that appear to be engaging in activities that either require registration… or may be investment scams,” Alberta’s top securities enforcer told this year’s ASC Connect conference.
Now in its sixth year, ASC Connect brings capital market participants together to discuss critical issues and evolving trends affecting Alberta’s economy and capital market. More than 700 people registered for this year’s conference including c-suite executives, small business owners, entrepreneurs, corporate lawyers, brokers, advisors, investors and other industry experts.
Campbell, who was part of the opening panel “Catching up with the ASC”, warned of two popular online investment scams: website clonings and crypto schemes.
“We commonly see scam artists use pop-up ads and other means to guide an investor online to a fake crypto asset trading platform website and encourage them to invest there. Scammers may also convince investors to grant them access to their crypto wallets, or to send them crypto through legitimate trading platforms,” she said in an enforcement update, which included recent sanctions decisions.
In a landmark case, the ASC banned an individual from trading for eight years and issued a $40,000 penalty after determining securities were illegally distributed to trade crypto assets. The ASC found that because the securities were distributed to the public, the private investment club exemption was not available. Significantly, the regulator ordered the individual to pay another $125,000 for the cost of the hearing and investigation after determining the individual employed “a strategy” that prolonged the hearing and increased costs.
The individual “took advantage of FOMO (Fear Of Missing Out) with respect to cryptocurrency investments,” said Campbell. “Ultimately, the trading did not generate any profits and investors received only a small portion of their initial investment, resulting in the loss of thousands of dollars.”
Joining Campbell from the ASC was Stan Magidson, Chair and CEO, Patricia Quinton-Campbell, Manager, Legal, Market Regulation and Denise Weeres, Director, Corporate Finance. The panel was moderated by Hilary McMeekin, Director, Communications and Investor Education.
Other key takeaways included:
To watch this session, or any of the other panel discussions, ASC Connect 2022 is available for playback at the ASC website
The Alberta Securities Commission (ASC) is the regulatory agency responsible for administering the province’s securities laws. It is entrusted to foster a fair and efficient capital market in Alberta and to protect investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada’s capital markets.
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