The Canadian Securities Administrators (CSA), representing provincial and territorial securities regulators across Canada, recently alerted the public about investment scams and deceptive financial guidance.
The CSA emphasized the need for investors to be cautious with online financial advice, urging them to confirm the credibility of their information sources.
Additionally, the agency recommended consulting with registered financial professionals to mitigate fraud risks.
Stan Magidson, Chair and CEO of the Alberta Securities Commission and spokesperson for the CSA, expressed concern over the prevalence and complexity of investment fraud.
“Investment fraud is prevalent and increasingly sophisticated, affecting investors across the country,” Magidson stated.
He emphasized the importance of individuals protecting their financial interests through awareness and verification of investment information sources.
Globally, financial market watchdogs echo the CSA’s concerns, with counterparts in the United Kingdom, Cyprus, and Belgium regularly alerting the public about scams and listing known fraudulent entities.
The rise of internet usage has simplified retail investment but also increased fraudulent activities, a trend that spiked during the COVID-19 pandemic as scammers exploited the heightened vulnerability of individuals.
Research by Finance Magnates and FXStreet revealed that scammers predominantly target traders via Facebook, with Telegram and WhatsApp also being significant channels.
The CSA warns the public to exercise extreme caution with financial advice encountered on social media, noting that it may not always come from qualified or well-meaning sources.
The CSA also highlighted common scam tactics, such as promises of guaranteed high returns, no-risk investments, urgent actions, requests for access to electronic devices, and offers to recover lost funds.
The regulator’s advice to the public is clear: avoid relying solely on online content or influencers for investment advice.
In cases of uncertainty regarding the reliability of information, the CSA advises consulting with a qualified and registered investment advisor or financial professional.