The Alberta Securities Commission (ASC) has released a list of top investment risks in hopes of helping Albertans avoid falling victim to scams in 2021.
“We want to protect people from the scammers and fraudsters that unfortunately exist out there,” said Hilary McMeekin, director of communications and investor education with ASC.
McMeekin said fraudsters capitalize on people in any way they can, even if that means committing scams during the pandemic.
“They prey on our vulnerabilities,” she said. “We have seen an increase in activity when it comes to fraud services or products around the pandemic.”
In early January, the ASC released a list of six tips that McMeekin said will “arm Albertans with timely information to stay vigilant and protect their finances as we enter 2021.”
The first red flag on the ASC’s list involves investments related to COVID-19. According to an ASC press release, a common way fraudsters take advantage of global events is through “pump-and-dump schemes,” which promise an opportunity to invest in new products or services that will prevent, detect or cure COVID-19 – or otherwise aid in the fight against the virus.
These pump and dump schemes usually involve artificially inflating the price of a penny stock shell company through issuing false and misleading positive statements, according to the release. The price of the stock rises as people invest. However, the wrongdoers cash out their stock at a high price before the truth is revealed, and the price of the stock then falls dramatically, leaving investors with nothing.
Another scam ASC warns about is any investment that promises great expectations. According to McMeekin, the ASC has seen an increase in situations where investment is encouraged with the promise of high returns resulting from a proposed deal involving a letter of intent.
“Proposed deals can fall through, so if it’s being promoted as a sure thing, investors should be wary,” she said.
Affinity fraud, according to McMeekin, is another scam people should be on the lookout for this year. McMeekin said affinity fraud happens when victims are introduced to scams by someone they know, such as family members, friends or co-workers.
“Fraudsters will often target ethnic communities, religious organizations, social clubs or professional groups, taking advantage of the trust and relationships that exist within,” she said. “The fraudster becomes part of – or pretends to be part of – the community, flaunting their success or wealth and often enlisting unsuspecting ambassadors to spread the scheme to make it seem credible. Friends and family may unknowingly fall victim and encourage others to invest, too.”
Also on ASC’s list is a scam that promises quick profits by trading stocks at home. McMeekin said a lot of trouble can be avoided by just properly researching these promises.
“Research the company, research whatever the investment is for,” she said. “Really look into and understand what that product or service is all about. Learn as much as you possibly can.”
Particularly during a recession or pandemic, people can be interested in earning additional income. According to McMeekin, taking the time to research the validity of various money-making opportunities can save people a lot of hardship down the road.
“Take that time,” she said. “Our hard-earned money is worth taking the time to do the research.”
Quite often, McMeekin said, when scams are reported, the companies or persons involved have not been registered with ASC.
“The first question isn’t ‘are you registered?’ but it should be,” she said. “If they are not registered, that is a red flag.”
The ASC has a website, checkfirst.ca, which McMeekin said can help people find out if companies they plan on dealing or investing with have taken necessary steps to register with the commission.
“It’s a website that is full of unbiased and free resources for investors,” she said. “No matter what stage of investing someone is in, it can be helpful.”
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.
