The British Columbia Securities Commission (BCSC) and the Alberta Securities Commission (ASC) are warning the public to exercise extreme caution about aggressive promotion of Crestview Exploration Inc., a B.C. gold mining company.
A mailing sent in early April from a “stock analyst and geologist” to residents of B.C., Alberta, Manitoba and Saskatchewan makes exaggerated claims about Crestview, predicting that its stock price “will soar as the recession hits.” The letter comes in an envelope, without a return address, that says in bold red letters, “CORONAVIRUS AFFECTING MARKETS: READ NOW.”
“The short-term upside potential for investors buying shares of Crestview Exploration today is around 500% while long-term shareholders (12+ months) could see gains exceeding 2,400%,” the letter says.
UPDATE MAY 25, 2020: A very similar letter headlined, “A RECESSION IS AROUND THE CORNER,” was sent to Canadian households last week. The letter refers to the “irreparable financial damage” caused by the lockdown, and then goes on to make the same recommendation of Crestview.
Crestview, listed on the Canadian Securities Exchange and the Frankfurt Stock Exchange, issued a statement April 8 stating that it was not responsible for the promotion, and said the letter contained “unfounded forward-looking statements.” The company urged investors and potential investors to verify any statements, and the source of such statements, contained in buy recommendations.
The BCSC and ASC reminds investors to exercise caution when considering aggressive promotions as a basis for investment decisions, as these promotions may make false claims of large profits and baseless stock price projections. Most aggressive stock promotions in recent years have been done through unsolicited email or social media, but promotions delivered through the mail carry the same risks.
The BCSC and ASC encourages anyone who is considering buying or selling an investment to do research or talk to their registered investment advisor to ensure it is an appropriate decision. For information on how to become better informed about investment products and services, please visit InvestRight at www.investright.org or Checkfirst at www.checkfirst.ca .
More information about the BCSC’s response to the COVID-19 crisis is available here.
More information about the ASC’s response to the COVID-19 crisis is available here.
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.
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