Be Alert to Signs of Fraud
The internet can be an invaluable tool for investors and offers a wealth of information about financial markets and personal investing. News services, government agencies, stock exchanges, mutual fund companies, securities and financial advisers have established literally hundreds of websites that provide up-to-date information on investing and products. With just a few keystrokes, an investor with a computer and modem can have access to more educational materials and current market data than ever before.
Investors who venture into the online world, however, should keep in mind that the power of the Internet is also being exploited by investment con artists and fast-buck operators who want nothing more than to separate you from your hard earned money.
Regulators in Canada and the United States has mounted important new programs to stop cyber-fraud, but there are still many places on the Internet for swindlers to set up shop. This does not mean that cyberspace should be avoided, but it does mean that investors should be alert to improper practices such as:
The law requires that people in the business of trading or advising in securities be registered or licensed in the state or territory in which they do business.
Increasingly, dealers from abroad are advertising their services over the Internet and the World Wide Web and are accepting clients and conducting business in jurisdictions where they are not registered.