Your Money INVESTOR OFFICE OSC We are an independent crown - PowerPoint PPT Presentation

Protect Your Money INVESTOR OFFICE

OSC We are an independent crown corporation that regulates the securities industry. We aim to protect investors from practices that are unfair, improper or fraudulent while ensuring the capital markets run fairly and efficiently. Investor Office We’re here to give you the information you need to invest wisely and confidently, ensure your needs are understood by those who make the rules, and share your voice with the boardrooms of Bay Street. INVESTOR OFFICE 2

We heard from investors Common issues and concerns Investment fraud Restitution   Outliving savings and losing What is an advisor responsible   for money Lack of understanding of fees Dealing with unexpected events   paid to advisors and investment that could impact retirement performance INVESTOR OFFICE 3

Financial issues of older Canadians INVESTOR OFFICE 4

This is a divider slide Enforcement Branch INVESTOR OFFICE 5

Agenda 1. About the Enforcement Branch 2. Investment fraud review 3. Fraud warning signs 4. Types of scams 5. Tips for protecting your money INVESTOR OFFICE 6

Enforcement Branch Investigates and litigates Securities  Act breaches Seeks orders in public interest before  adjudicative tribunals of the Commission and the courts Mix of investigators, forensic  accountants, lawyers and support staff Team types  Case Assessment  Investigation/Litigation  Insider Trading  Joint Serious Offences  INVESTOR OFFICE 7

In cases of wrongdoing We can: reprimand, issue cease trade  orders, remove exemptions, ban individuals from acting as directors and officers, restrict registration and impose monetary penalties seek jail terms in quasi-criminal  and criminal proceedings INVESTOR OFFICE 8

In 2014-15 Commenced 28 proceedings Concluded 36 proceedings against   involving 41 individuals and 27 50 individuals and 36 companies companies 8 cases involved fraudulent  8 cases alleged fraudulent activity  activity INVESTOR OFFICE 9

Investment Fraud Overview Fact: Fact: 1 in 20 Canadians is a victim of Almost 3 in 10 Canadians have investment fraud been approached with a potential fraud.  Investment fraud is an underreported crime  Fraud doesn’t just impact your wallet – can affect your mental and physical health, relationships, quality of life INVESTOR OFFICE 10

Warning signs of fraud High-pressure tactics – Act Now!  Phone call, e-mail from someone  you don’t know Promise of high return with low risk  Encouraged to recruit friends/  family Unregistered seller  Suggest falsifying financial  information Tax avoidance strategy  Company about to be listed on an  exchange INVESTOR OFFICE 11

Common types of fraud  Pump and dump  Affinity  Double dip  Ponzi/pyramid  Boiler room INVESTOR OFFICE 12

Affinity fraud Target: Groups sharing a common identity (e.g., cultural, religious, occupational, sports related) How it works Con artist builds trust and may  even endear themselves to (or be part of) the group’s leadership Person could be from within the  group or has worked their way in INVESTOR OFFICE 13

Ponzi/pyramid scheme Target: Investors are recruited and encouraged to recruit others How it works  Investment “returns” are paid with money from new investments – not earned from invested money INVESTOR OFFICE 14

Boiler room Target: Anyone with money to invest How it works  Typically starts with an unsolicited phone call or e- mail  Business appears legitimate – address in financial district; has website and toll- free number INVESTOR OFFICE 15

Pump and dump Target: Anyone with money to invest How it works Typically starts with an unsolicited  phone call or e-mail Encouraged to buy promising over-  the-counter or penny stocks Con artist holds large blocks of  shares – as price driven up, share value increases When con artist sells, share value  plummets – victims left with worthless shares INVESTOR OFFICE 16

Double dip – Repeat scams Fact: 35% of fraud victims are defrauded more than once How it works Con artists create, reuse and sell  lists of their victims “Initial investment will pay off if  you send more money” A previous investment will pay off if  rolled into a new one “If you tell the regulators, they’ll  shut us down and you won’t make back your money” INVESTOR OFFICE 17

Do a background check before you invest aretheyregistered.ca 1-877-785-1555 Investor alerts  Concluded and ongoing  disciplinary proceedings Investment fraud checklist and  other related materials www.osc.gov.on.ca Google (search) names INVESTOR OFFICE 18

If you suspect a scam Contact us  1-877-785-1555 inquiries@osc.gov.on.ca Your local police  Canadian Anti-Fraud Centre  www.antifraudcentre.ca 1-888-495-8501 INVESTOR OFFICE 19

This is a divider slide Working with your advisor INVESTOR OFFICE 20

Partnering with a financial advisor CheckBeforeYouInvest.ca First question What is your investment  Are you and your firm registered? • philosophy? How are you paid?  Also ask… How will you work with me?  What are your qualifications?  How much experience do you  have? Before investing with anyone, What products and services do  check their registration and you offer? credentials. Who are your clients?  INVESTOR OFFICE 21

Your advisor’s responsibility Must know you – investment  goals, financial circumstances, time horizon Must know the product they  recommend – structure, features, fees, risk Must make suitable  investment recommendations Must tell you how he’s paid  INVESTOR OFFICE 22

Care about your investments Your role  Be open and honest about your finances  Understand your money personality  Understand what you’re investing in  Ask questions! INVESTOR OFFICE 23

Before you invest Your advisor should answer the following questions for you How does this investment work? What are the costs to buy, hold and   Why should I buy it? sell it?  How will it help me reach my When can I sell it?   goals? Will I pay fees or penalties if I need  What’s the level of risk? to get my money out sooner?  What are the costs to buy, hold  and sell it? Don’t invest if you don’t understand the product, the risks and how much it costs. INVESTOR OFFICE 24

Research Fund facts Key information about mutual  funds Easy to understand  Apples-to-apples comparisons  Available through your advisor,  fund company websites and at www.sedar.com INVESTOR OFFICE 25

Assessing your advisor Assess your total return over time  Calculate your total costs each  year Compare your results to  benchmarks Assess the value your advisor  provides Decide if you’re happy with results  over time INVESTOR OFFICE 26

Signs of a problem You rarely hear from your advisor  Your advisor’s suggestions don’t  seem to match your goals Your advisor makes frequent or  unusual trades You feel pressured to invest  INVESTOR OFFICE 27

How to make a complaint 1. Talk to your advisor and their Need help? manager OSC Contact Centre 2. Escalate your complaint within 1-877-785-5555  the firm in writing Inquiries@osc.gov.on.ca  3. Contact the Ombudsman for Banking Services and We operate in English but are able to Investments at 1-888-451-4519 handle enquiries in over 200 or obsi.ca languages. INVESTOR OFFICE 28

GetSmarterAboutMoney.ca Free calculators, planning tools,  An investor education site designed budget sheets, quizzes and videos to help Canadians better understand investing and have meaningful Reader-friendly articles, blogs and  conversations with their advisors. infographics INVESTOR OFFICE 29

Other resources and tools  Brochures  Investor News – get the latest news and updates  GetSmarterReInvesting.ca  Re: Investing – ask us your investing question or about the OSC INVESTOR OFFICE 30

Thank you Investor Office Contact Centre InvestorOffice@osc.gov.on.ca inquiries@osc.gov.on.ca Re: Investing 1-877-785-1555 (Toll free) GetSmarterReInvesting.ca 1-866-827-1295 (TTY) INVESTOR OFFICE 31