If it sounds far too good to be true, it almost always is.
That’s the advice from the Alberta Securities Commission (ASC) as investment scams ramp up across the country and try to take advantage of the current COVID-19 pandemic.
One such scam is trying to lure in possible investment in companies claiming to have developed products or services that prevent, detect or cure the coronavirus.
It’s called a pump-and-dump scheme, so here is what you need to know: they spread positive but false information to get people to buy stock with hopes the ‘hype’ spreads; the fraudulent penny stock companies have limited or untrue information that is publicly available; they quickly dump the stock before it drops giving them a windfall while the rest lose their investments.
Another scam uses fear to try and steal people’s money. Anyone contacted regarding their investments should not give out any personal information then call their advisor or bank to verify the call was legitimate.
To date, no product or service is authorized to treat or protect against the virus. For reliable information, the public should search information on the Canadian or Alberta government websites.
Survey says
Meanwhile, as recent survey from the ASC shows a significant number of Albertans are confident they could pick out an investment fraud.
A total of 75 per cent of respondents expressed confidence they have the knowledge and awareness to protect themselves.
However, when it came to actually spotting the signs of investment fraud, more than 70 per cent overlooked the red flags of celebrity endorsements and tax-free investing. Meanwhile, over half of respondents failed to identify the warning signs of high return, low risk claims and the exclusive or time-sensitive opportunity assertion.
Another statistic showed 58 per cent trusted friends and family on an investment, which the ASC explained is important as one in five people approached with an investment scam said they were introduced to it through a personal connection.
“Just because an investment opportunity comes through someone we know and trust, doesn’t automatically mean it’s not fraudulent,” said Hilary McMeekin, ASC manager of communications in a release.
“Regardless of how much you trust the source, it’s critical to take steps to protect your hard-earned money, like checking registration.”
The ASC recommends people visit www.CheckFirst.ca for information and resources to guard against investment fraud.
People should also be familiar with these typical red flags:
Promises of high returns with little or no risk. There is no such thing. Usually, the higher the potential returns, the higher the level of risk.
Lack of registration. Generally, anyone offering an investment in Alberta must be registered with the ASC. A free and quick national registration search is available via Checkfirst.ca.
Pressure to invest immediately. If someone is pressuring you and you are uncomfortable, decline the offer or seek advice from an independent financial professional before deciding to invest.
Offshore investment or profits that claim to be tax-free. Taxes can sometimes be deferred, but they can’t be avoided. This tactic is used to get investors to send their money offshore where it is difficult, if not impossible, to get back.
“We often hear from victims that they never thought fraud could happen to them — but anyone can be impacted,” said McMeekin.
“Protecting one’s self against fraud ultimately comes down to understanding the red flags and doing research before signing on the dotted line. Fraud is constantly evolving and changing, so it’s important to stay-up-to-date with information and remain vigilant.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
