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

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INVESTOR OFFICE

Protect Your Money

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INVESTOR OFFICE

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OSC

We are an independent crown corporation that regulates the securities

industry. We aim to protect investors

from practices that are unfair, improper

r 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.

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We heard from investors

Common issues and concerns

Investment fraud
What is an advisor responsible

for

Lack of understanding of fees

paid to advisors and investment performance

Restitution
Outliving savings and losing

money

Dealing with unexpected events

that could impact retirement

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Financial issues of

lder Canadians

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This is a divider slide

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Enforcement Branch

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Agenda

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

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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

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In cases of wrongdoing

We can:

reprimand, issue cease trade
rders, 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

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In 2014-15

Commenced 28 proceedings

involving 41 individuals and 27 companies

8 cases alleged fraudulent

activity

Concluded 36 proceedings against

50 individuals and 36 companies

8 cases involved fraudulent

activity

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Investment Fraud Overview

Fact: 1 in 20 Canadians is a victim of investment fraud

Investment fraud is an

underreported crime Fact: Almost 3 in 10 Canadians have been approached with a potential fraud.

Fraud doesn’t just impact

your wallet – can affect your mental and physical health, relationships, quality of life

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Warning signs

f 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

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Common types of fraud

Affinity
Ponzi/pyramid
Boiler room
Pump and dump
Double dip

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Affinity fraud

Target: Groups sharing a common identity (e.g., cultural, religious,

ccupational, 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

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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

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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

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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

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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”

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Do a background check before you invest

aretheyregistered.ca 1-877-785-1555

Investor alerts
Concluded and ongoing

disciplinary proceedings

Investment fraud checklist and
ther related materials

www.osc.gov.on.ca Google (search) names

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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

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This is a divider slide

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Working with your advisor

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Partnering with a financial advisor

CheckBeforeYouInvest.ca

First question

Are you and your firm registered?

Also ask…

What are your qualifications?
How much experience do you

have?

What products and services do

you offer?

Who are your clients?
What is your investment

philosophy?

How are you paid?
How will you work with me?

Before investing with anyone, check their registration and credentials.

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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

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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!

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Before you invest

Your advisor should answer the following questions for you

How does this investment work?
Why should I buy it?
How will it help me reach my

goals?

What’s the level of risk?
What are the costs to buy, hold

and sell it?

What are the costs to buy, hold and

sell it?

When can I sell it?
Will I pay fees or penalties if I need

to get my money out sooner?

Don’t invest if you don’t understand the product, the risks and how much it costs.

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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

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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
ver time

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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

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How to make a complaint

1. Talk to your advisor and their

manager

2. Escalate your complaint within

the firm in writing

3. Contact the Ombudsman for

Banking Services and Investments at 1-888-451-4519

r obsi.ca

Need help? OSC Contact Centre

1-877-785-5555
Inquiries@osc.gov.on.ca

We operate in English but are able to handle enquiries in over 200 languages.

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GetSmarterAboutMoney.ca

An investor education site designed to help Canadians better understand investing and have meaningful conversations with their advisors.

Free calculators, planning tools,

budget sheets, quizzes and videos

Reader-friendly articles, blogs and

infographics

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Other resources and tools

Brochures
Investor News – get the