Investor Alerts
FOR IMMEDIATE RELEASE
April 16, 2007
The Manitoba Securities Commission issues a warning to investors after reports of a suspicious investment Scheme operating in the Province
Winnipeg, Manitoba – The Manitoba Securities Commission(MSC) is warning all Manitoba residents about a scheme being offered at free, public seminars. The MSC has reports that recently investors in the city of Brandon and surrounding rural communities have been targeted.
"The MSC hopes that this alert will encourage investors to thoroughly examine any investment opportunity that they are considering. We don’t want to see Manitobans making investments that could in fact be highly unsuitable" says Doug Brown, Director of Legal and Enforcement.
Seminar attendees are told that they can join an organization for a fee that then allows them to learn about and access a system to become "portfolio account managers" and restructure their assets through a variety of methods including opportunities in the precious metals industry, consumer debt or capital markets, environmental projects and international mutual funds.
According to reports, under this scheme a fee is paid and members are given a one-year probation period with the organization to restructure their own assets, refer other people into the organization, or introduce a new business opportunity to the group.
Reports say the seminar presenters are careful to stress that they are only selling memberships into their organization and not securities – admitting to audiences that they do not want to run afoul of regulators.
However, regulators are concerned because, according to reports, during the one-year probationary period, members are almost always required to purchase securities. People are told that they can move funds offshore with repeated references to tax avoidance. The regulators want people to be aware that they increase their risk when money is moved offshore because it usually makes efforts to reclaim their money more difficult, if not impossible, should their investments go awry.
The MSC is currently investigating this issue and strongly encourages investors to be cautious about schemes that bare these "red flags":
- Promises of unreasonably high annual rates of return
- The investment set-up is difficult to understand
- Investors are encouraged to put all of their assets into the deal
- Money is moved off shore
- Numerous references to tax avoidance
- Secrecy – an insider (membership) opportunity
If anyone has information regarding the investment scheme described in this alert, contact the MSC immediately at (204) 945-2548.
Contact: | Ainsley Cunningham Education and Information Coordinator 500-400 St. Mary Avenue Winnipeg, MB R3C 4K5 (204) 945-4733, ainsley.cunningham@gov.mb.ca |