The New Brunswick Securities Commission (NBSC) uncovered investment misconduct that caused more than $2.5 million in losses last year, the regulator said Tuesday.<\/p>\n
In 2012, the NBSC ordered 18 companies, and eight individuals, to cease trading in securities, it says. In most of those cases, the companies involved were based outside the province. And, six of these cease trade orders involved possible fraudulent boiler room-type investments, it notes.<\/p>\n
The regulator also says that there were 10 cases either brought before the commission, or concluded in provincial court, in 2012. It pursued three cases in court for fraud, or for breaching an order of the commission. And, two of these cases ended in jail time for the offenders, it says, with the third case likely be decided this year. None of the those cases involved registered investment advisors or registered firms, the NBSC says.<\/p>\n
The NBSC says that the vast majority of investor losses uncovered during the year were the result of “fraudulent, abusive or non-compliant investment schemes that involved a face-to-face interaction between the victim and someone they know.” Several of the schemes involved investors lending money at a high interest rate with a promissory note, or written loan agreement.<\/p>\n
“The lesson learned for investors based on the cases we dealt with in 2012 is that it is not enough to know the person you are dealing with,” said Rick Hancox, executive director of the NBSC. “Investors must understand what they are investing in and how the investment will make money.”<\/p>\n
“Even if you know and trust someone, investors have to do their own research on anyone who handles money for investment purposes,” Hancox added. “We cannot emphasize enough that investors should confirm for themselves that any statements made by the promoter are in fact true.”<\/p>\n
Hancox also stressed that victims of investment schemes can suffer more than just financial losses. “Many of these cases involved a loss of trust between friends, relatives and acquaintances. The financial stress can lead to health problems including depression and anxiety,” he said.<\/p>\n","protected":false},"excerpt":{"rendered":"
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