The Saskatchewan Financial Services Commission is warning investors about free investment seminars being offered out of private homes.
The SFSC says that at the seminars, people are being told that they can purchase a one-year membership with the organization and become portfolio account managers. People are also being told that they will be able to restructure their assets through investments, refer other people into the organization or introduce a new business opportunity to the group, it notes.
The commission adds that the seminar presenters are careful to stress that they are only selling memberships into their organization and not securities — admitting to audiences that they do not want to run afoul of securities regulators.
The SFSC says it is concerned because, according to reports, during the initial one-year period, members are almost always required to purchase securities. “People are also being told that they can move funds offshore with repeated references to avoiding tax. The SFSC wants people to be aware that when their money is moved offshore, it is difficult, if not impossible, to reclaim their money should their investments go awry,” it says.
The commission says that it is currently investigating this issue and strongly encourages investors to be cautious about similar schemes that: make promises of unreasonably high annual rates of return; where the investment set-up is difficult to understand; investors are encouraged to put all of their assets into the deal; money is moved off-shore; there are numerous references to tax avoidance; and, the scheme demands secrecy.
“We hope this warning will encourage investors to stop and think twice before making what could be an unsuitable investment,” SFSC’s Securities Division Enforcement Branch deputy director Ed Rodonets said.
Saskatchewan regulator issues warning on investment seminars
Offshore funds difficult for investors to reclaims, SFSC says
- By: James Langton
- March 13, 2007 March 13, 2007
- 11:15