The Autorité des marchés financiers (AMF) is warning investors about possible scams involving sustainable resource investments.
The Quebec securities regulator said Tuesday that, with the global demand for energy on the rise, “investment offerings in traditional or alternative energy resources are becoming increasingly numerous as well as attractive to investors and fraudsters alike.”
The regulator notes that a recent enforcement survey by the North American Securities Administrators Association (NASAA) reported that oil and gas investments are among the five products most commonly at the heart of securities enforcement cases.
Amid that trend, it has published advisories to help investors better protect themselves against fraudulent techniques that can sometimes be associated with traditional, alternative or green energy investments.
“Many of these offerings can be risky and are therefore not appropriate for most investors,” it says. “Moreover, it is not unusual for unscrupulous promoters to make use of the lure of current events or innovative technologies to take advantage of unsuspecting investors.”
“The terms ‘green’ and ‘alternative’ energy tend to indicate that a company is associated with environmentally-friendly green power generation. However, in some cases, the company is nothing but an empty shell that does not produce anything at all,” it says in its advisory, which counsels investors to ensure they fully understand the nature of the investment and the risks, along with those behind the proposed investment.