OSC Warns Investors to Beware of Phantom Regulators

Toronto – Before submitting any personal information to an organization claiming to be a securities regulator, investigate further, the Ontario Securities Commission warns. It doesn’t take long to determine if the organization is what it claims to be – and it could save you from having your personal information and money fall into the wrong hands.

The OSC has identified a number of websites that gather personal information, under the pretense that they represent international securities regulators or government agencies. Some of these sites actively encourage investors to submit their questions and complaints, and claim to pass them on to the appropriate regulator worldwide. In fact, these sites may collect information about your investment habits in order to lure you into fraudulent investment schemes.

The North American Securities Administrators Association (NASAA) recently announced that several “phantom regulators’, including U.S.-based operations that target investors worldwide, have been brought to the attention of U.S. securities regulators In some of these cases, criminals were using the “phantom regulators” to endorse fraudulent investment opportunities.

In either case, it’s a good idea to investigate further. Some signs that a regulator may be a “phantom”:

1. You can’t find references to the organization on any other regulatory websites and legitimate regulators have never heard of them. In Canada, check with the securities regulator in your province or territory - for contact information see the Canadian Securities Administrators website www.csa-acvm.ca. For North American jurisdictions including state regulators see the North American Securities Administrators contact information section at www.nasaa.org and worldwide check the members list on the International Organization of Securities Commission’s website, www.iosco.org .
   
2. They endorse, or promote any particular investment opportunity – a legitimate regulator would not do this.
   
3. They claim that paying a fee to “release restricted shares” is not an attempt to steal your savings. This is a common ploy, and a recent twist on age-old advance fee schemes.

For more information or to report a suspected ‘phantom’ regulator, please contact the Ontario Securities Commission at (416) 593-8314 or toll free at 1 (877) 785-1555 or e-mail inquiries@osc.gov.on.ca. For free educational resources on how to protect yourself from frauds and scams, visit the www.investorED.ca website. View the NASAA news release.

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