Last week, BC and Manitoba issued an alert warning investors about a possible ‘recovery room’ scheme. Typically, these schemes involve companies that contact investors who may have lost money in a fraudulent or illiquid investment with an offer to buy their shares at an inflated price.
Once the investor agrees to sell their shares, a contract is drawn up, and they are asked to pay a fee to cover business costs. They are often told to wire a sum of money to an offshore bank account. The scammers take the money from this offshore account but do not repurchase the shares and the victim for a second time loses money.
Investor alerts help investors to avoid being scammed, in this case, twice. We hope that the information we have published about York-Rio Resources Inc. and Penn Capital Management Ltd. come up in online searches so that people avoid being targets of a ‘re-victimization’ scheme.
Often investors do their homework to ensure the company that they are considering investing in or doing business with is okay. One simple way is to Google the company by name. Check out InvestRight’s Know Your Investments section to learn more about how you can research potential investments.
If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Inquiries at 604-899-6854 or 1-800-373-6393 or through e-mail at [email protected] You can also file a complaint or submit a tip anonymously using the BCSC’s online complaint form.
InvestRight.org is the British Columbia Securities Commission’s investor education website. Subscribe to receive email updates from BCSC InvestRight.
We discuss common concerns and ways to deal with them when global events cause financial markets to become volatile.
Learn about RRSPs