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NASAA’s Annual List of Top Five Investor Threats

Every year, the North American Securities Administrators Association (NASAA) releases an annual list of the top five threats to investors.

Every year, the North American Securities Administrators Association (NASAA) releases an annual list of the top five threats to investors.

NASAA determines its list by surveying state and provincial securities regulators to find out what products and schemes have been the most harmful to investors. Below are NASAA’s top five threats, which are linked to some helpful BCSC InvestRight resources and information:

  1. Unregistered Products/Unlicensed Sales
    One of the biggest threats regulators see is unregistered individuals who attempt to sell securities and/or try to sell unregistered investment products. The BCSC encourages investors to always check the registration and disciplinary status of someone offering an investment.
  2. Promissory Note Schemes: Promissory notes can be used as a legitimate means to raise capital, but they are offered almost exclusively to corporate or sophisticated investors who have the capacity to do thorough research on the offering company. Fraudulent promissory notes tend to offer high returns with little to no risk and often guarantee the principal, which legitimate notes do not do. 
  3. Oil & Gas Investments: Oil and gas investment schemes often take advantage of investor enthusiasm during an oil boom period. Promoters of the scheme will cold call or email investors with a promising opportunity to get involved in an oil and gas limited partnership. Investors may be shown fake reports or told that a large oil and gas company has also invested to help ensure peace of mind. Once money is invested in the scam, it is unlikely that investors will get it back.
  4. Real Estate-related Investments: In illegitimate schemes, the value of the property may be inflated to attract investors or the property may not exist at all. Investors are also often charged high fees and given little information regarding details of the investment or disclosure of risks. 
  5. Ponzi Schemes: The premise of a Ponzi scheme is simple: initial investors are lured into the scheme and told they can grow their money by recruiting additional investors. Early investors are paid with the money raised by later investors, until the scheme eventually collapses. The only people who benefit from the scheme are those running it. 

Visit our Fraud Awareness section to find more information on common scams and their warning signs.

Report a Concern

If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Contact Centre 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 BC Securities Commission’s investor education website. Subscribe to receive email updates from BCSC InvestRight.

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