Market Misconduct

The British Columbia Securities Commission (BCSC) enforces BC’s securities laws, to help protect investors and prevent harm to the province’s capital markets.

Combating Misconduct

The BCSC investigates suspected breaches of BC’s securities laws, including investment fraud, illegal insider trading, market manipulation, disclosure violations, illegal distribution of securities, and registrant misconduct.

Investment Fraud

Investment fraud, also known as securities fraud, covers any deceptive practice that induces a person to make an investment decision, which results in loss for that person. To learn how to recognize, reject, and report fraud, spend time in InvestRight.org’s Fraud Awareness section learning about the warning signs and understanding the techniques you can use to avoid investment fraud.

Illegal Insider Trading

Illegal insider trading involves buying or selling the shares of a publicly traded company while possessing undisclosed material information about the company, for example financial results or an upcoming acquisition or sale. It includes buying securities ahead of the disclosure of good news, and selling securities ahead of the release of bad news.

A related offense is “tipping”, which occurs when a person tells another person of the undisclosed material information, without a legitimate business reason for doing so. It is an offence both to trade on material undisclosed information, and to “tip” a person by providing them with undisclosed material information.

Market Manipulation

Market manipulation involves efforts to artificially increase or decrease the price of a company’s shares. Examples of market manipulation include creating false trading volume and “pump and dump” schemes.

Disclosure Violations

BCSC staff review disclosure by public companies to ensure that investors have accurate and timely information about the company on which to base their investment decisions. A review that uncovers inaccurate, incomplete, or misleading disclosure may result in an enforcement case against a company or the management of the company.

Illegal Distributions and Unregistered Trading

An illegal distribution is the sale of securities without a prospectus or an exemption from the requirement to have a prospectus. Unregistered trading is when a person trades securities without being registered or without being exempt from registration.

Frequently, a person who promotes an illegal distribution is not registered in the securities industry. It is important to do a background and registration check prior to giving anyone your money.

Registrant Misconduct

This type of misconduct occurs when a registered person or company violates securities laws or fails to adhere to the conditions of registration. Go to our Advisor Misconduct page for more information.