Quebec’s financial services regulator Tuesday issued a warning about a potential advance fee scam targeting retail investors.

The Autorité des marchés financiers is urging investors to be cautious about a firm called JM Finance Group, a company that has allegedly contacted investors offering to redeem their shares at a price much higher than available on the market. To complete the transaction, investors are asked for a ‘refundable’ fee payable by electronic transfer, the AMF says.

“Investors should be very cautious when a company offers to purchase their shares at a price in excess of the actual value, especially if a fee is charged,” said Sophie Garon, AMF director, client communications and education. “In many such cases, investors have lost their deposits and never received the money as promised,” she added.

The regulator notes that the firm has allegedly targeted foreign investors, and it is not known whether it has contacted Quebec investors. However, it reports that the firm’s website indicates that it is based in Montreal, and it gives the phone number that was used by another company which was the subject of a warning by the AMF in February 2009, Andrew Clayton Advisors.

“The approach being used by JM Finance Group is similar to the strategy used by Andrew Clayton Advisors,” the AMF reports.

It also notes that JM Finance Group is apparently citing the AMF as a reference, but that the company is not registered with the AMF, and several individuals that are apparently associated with the firm aren’t registered either.

IE