As noted elsewhere on this site, a recent survey* found that 41 per cent of Nova Scotians believe they have been approached with some form of investment fraud. What else do we know about investment fraud in Nova Scotia? You might be surprised.
- Of those approached with investment fraud, 25% say they have been approached five or more times.
- Only 29% believe investment fraud is common in their province.
- Only half of Nova Scotians believe they are as likely to be a victim of fraud as anyone else.
- 81% believe it is important to report even the suspicion that someone has approached them with an investment fraud.
- Less than 1/3 of those approached actually reported the attempt.
- 81% believe you should never make an investment without doing independent research. Yet almost half (48%) rely completely on the advice of an adviser, doing no research on their own.
- You do not need to be rich to be a fraud victim - most Nova Scotians are defrauded for $5000 or less, often less than $1000.
*All stats taken from the CSA Investor Index 2009.
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In its effort to protect Nova Scotian investors and capital markets, the Nova Scotia Securities Commission investigated 67 complaints and issued $632,500 in administrative penalties in 2009.
The commission concluded nine cases against 10 defendants that included one disclosure violation, six cases involving registrant misconduct, and two cases of conduct not in the public interest.
These figures and more were released today as a part of the Canadian Securities Administrators (CSA) 2009 Enforcement Report. (The Nova Scotia Securities Commission is a member of the CSA.)
The report shows actions by Canadian securities regulators resulted in more than $153 million in fines and administrative penalties against individuals and companies in 2009, compared with $12.5 million in 2008. Because of the inter-provincial nature of capital markets, proceedings and prosecutions in other provinces have an impact on Nova Scotia markets and investors.
What do these numbers mean to Nova Scotian investors? We hope they tell you that there is an organization actively working to provide protection to investors, and working to ensure that the capital markets in this province operate fairly and efficiently.
A recent national survey showed that 41 per cent of Nova Scotians said they have been approached with some form of investment fraud, but less than a third actually reported it. When asked who they would report the incident to, 63 per cent indicated the RCMP and 37 per cent said local police. Only 17 per cent said they would go to a financial regulator.
Many concerns about investing and advisor conduct are not criminal issues, and so not in the jurisdiction of the police. To report a complaint to the securities commission, go to our enforcement web page, or call 902-424-4558.
The full report can be found on the Nova Scotia Securities Commission’s website, under “What’s New - Enforcement.”
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