Released on March 12, 2007
The Saskatchewan Financial Services Commission (SFSC) is warning all Saskatchewan citizens about free investment seminars being offered out of private homes.
“We hope this warning will encourage investors to stop and think twice before making what could be an unsuitable investment,” SFSC’s Securities Division Enforcement Branch Deputy Director Ed Rodonets said.
At the seminars, people are being told that they can purchase a one-year membership with the organization and become portfolio account managers. People are also being told that they will be able to restructure their assets through investments, refer other people into the organization or introduce a new business opportunity to the group.
Reports say the seminar presenters are careful to stress that they are only selling memberships into their organization and not securities - admitting to audiences that they do not want to run afoul of securities regulators.
The SFSC is concerned because, according to reports, during the initial one-year period, members are almost always required to purchase securities. People are also being told that they can move funds offshore with repeated references to avoiding tax. The SFSC wants people to be aware that when their money is moved offshore, it is difficult, if not impossible, to reclaim their money should their investments go awry.
The SFSC is currently investigating this issue and strongly encourages investors to be cautious about similar schemes that bare these “red flags”:
- Promises of unreasonably high annual rates of return;
- Investment set-up is difficult to understand;
- Investors are encouraged to put all of their assets into the deal;
- Money is moved off-shore;
- Numerous references to tax avoidance; and,
- Secrecy – an insider (membership) opportunity.
If anyone has any information regarding the investment scheme described in this alert, they should contact the SFSC at 306-787-5645.
-30-
For more information, contact:
Andrew Dinsmore
Justice
Regina
Phone: 306-787-8606
Email: adinsmore@justice.gov.sk.ca