The Canadian Foundation for Advancement of Investor Rights (FAIR) released a report that was covered in the Globe and Mail by Janet McFarland.
The title of the report is “A Decade of Financial Scandals.” It’s an interesting read and it raises many good questions. The basis for the report is an analysis of fifteen securities or investment related scandals that occurred in Canada over the past ten years.
Over that time, Canadians suffered significant financial losses and this report examines the causes – everything from Ponzi schemes, now made famous by the Bernie Madoff case in the US and the Earl Jones case in Quebec; to the misappropriation of assets and the mismanagement of books and records. Of the 15 cases examined, three were from BC: Ian Thow, Manna and Vantage.
FAIR makes four recommendations in the areas of fraud prevention, earlier detection of fraud, prosecution and compensation. BCSC is working hard in all of the areas outlined by FAIR and agrees that more needs to be done to protect investors.
After you have read FAIR’s report, look at the just released 2010 Enforcement Report by the Canadian Securities Administrators. It outlines how Canadian securities regulators are working to detect and disrupt misconduct in Canada’s capital markets. It shows that securities regulators are working very hard to bring more cases before the courts that result in jail sentences.
The report also shows that 48% of the total cases concluded in 2010 were under the category of illegal distributions that often involve Ponzi schemes, affinity fraud and boiler room operations. This points to FAIR’s first recommendation – the need for a well funded national campaign to educate consumers on how to avoid financial fraud.
Both reports are timely. March is Fraud Prevention Month.
BCSC staff ambassadors tour the province, helping people to protect themselves from fraud and unsuitable investments. Our goal is to enable BC investors to develop critical thinking skills so they can become more informed of steps they should take to protect themselves when investing. Where we are this month SurreyFocus on Seniors ForumSeptember 6 10:00 […]