COVID-19 frauds
The COVID-19 pandemic has impacted life around the world, including families across Alberta. Health organizations are recommending physical distancing in order to control the spread COVID-19, and that distancing has resulted in large numbers of Albertans being at home. Additionally, many individuals are choosing or have been forced to self-isolate. Beyond the health concerns, the virus has created economic and market volatility around the world. These factors have resulted in uncertainty and vulnerability, and an environment in which scam artists intensify their efforts.
What the ASC is seeing in Alberta right now
Check back regularly as we will report on what we are seeing out in the market. In the meantime, be sure to familiarize yourself with the red flags of investment fraud and common types of investment scams.
Coronavirus recession and aggressive stock promotions
The recent volatility of the markets, coupled with wide-spread job losses and other stressors, has created an environment of fear and uncertainty. These fears are manipulated by fraudsters who lure investors in with promises of extraordinary gains, when the reality is that the stock projections are unfounded.
Most aggressive stock promotions in recent years have been done through unsolicited email or social media, but promotions delivered through the mail carry the same risks. Anyone who is considering buying or selling an investment is encouraged to do research or talk to their registered investment adviser to ensure it is an appropriate decision.
Read more in a joint investor alert by the BCSC and ASC:
Investor alert: Aggressive stock promotion exploits fears of coronavirus recession (April 8, 2020; updated May 28, 2020).
Work from home and/or forex trading fraud
We have noticed potentially fraudulent online ads by companies offering opportunities to work from home or grow your retirement savings as traders in the financial markets during the COVID-19 pandemic.
These ads offer to train you on trading stocks or forex, claiming that you don’t need experience or a licence and can keep a large percentage of the profits. However, the firms demand payment of fees from would-be traders. The ASC believes neither the firms nor fees are legitimate. Make sure you know the warning signs before you get involved in such schemes.
Read more in the ASC’s investor alert:
Investor alert: ASC warns public about work from home scams during COVID-19 crisis (March 27, 2020).
The individual or company behind the online ads may also invite you to connect with them on social media, either by accepting a friend request or by joining a private group. Be wary of any information you share or make public on social media, and be skeptical of any investment opportunity offered to you through social media and buy/sell websites.
Pump-and-dump schemes based on global events
We know that fraudsters take advantage of global events and breaking news to lure potential investors, building on the hype with the expectations of significant returns. A common way they do this is through pump-and-dump schemes involving publicly traded small “shell” companies. They “pump” up the investment to get investors to buy in, then “dump” their stock before the hype ends resulting in a substantial payout for themselves while all remaining investors lose their money.
At this time, there is no vaccine or any natural health product that is authorized to treat or protect against COVID-19. Be cautious of any claims that a company has a solution to help stop the coronavirus outbreak.
Read more in the CSA’s news release:
Canadian Securities Regulators warn public of coronavirus-related investment scams (March 19, 2020).
How the ASC is helping
The ASC is an essential service committed to fostering a fair and efficient capital market and protecting investors. We continue to monitor the impact of COVID-19 on the capital markets, in conjunction with our colleagues across the Canadian Securities Administrators (CSA). Our team remains focused on supporting market participants, informing and protecting investors and assisting the public. For more information on how the ASC is supporting the capital market, please visit COVID-19: Operations continue at the ASC. For more information on what fraudulent activity might be specifically affecting Alberta check back to this page frequently. In addition, a general overview can be found in the CSA’s COVID-19 & Investment Fraud factsheet.
What you can do
Beyond investment fraud
It has been well reported that there are many types of fraud popping up during the COVID-19 pandemic outside of investment fraud. One example includes phishing and malware scams where scammers pose as governmental agencies, national or global health authorities, and send phishing emails or texts designed to trick people into downloading malware or providing personal identification and financial information. They can appear to be real, but you need to be careful before you provide anyone with this data. For more information on these and additional COVID-19 frauds, please visit the Canadian Anti-Fraud Centre.
When researching the latest health information, be sure to visit these legitimate sources:
Think you've been scammed?
If you or someone you know has received a COVID-19 related investment scam or if you feel you have been defrauded through a COVID-19 related investment scam contact the Alberta Securities Commission (ASC).
Contact the ASC