The Nova Scotia Securities Commission (NSSC) has warned investors that regulators across the country have seen a “rapid increase” in forex-related scams in the past several months.
“The scams are being offered on social media, online forums and sites like Reddit and Kijiji, targeting investors with promises of high returns,” said Stephanie Atkinson, acting director of enforcement for the NSSC, in a statement.
While foreign exchange trading is legal as long as it’s being carried out by regulated dealers, “its complexity and volatility can be used by fraudsters to mislead unsuspecting investors into believing a scheme is a legitimate and lucrative investment,” the NSSC said.
The alert details the red flags of possible forex scams, including guarantees of high returns with little risk, high-pressure sales, and a lack of disclosure, among other things.
It also reminds investors to ensure that firms engaging in forex trading must be licensed by provincial regulators and belong to the Investment Industry Regulatory Organization of Canada.