(November 16 – 14:15 ET) – The Ontario Securities Commission and the RCMP have issued a warning to investors about jargon used to lure individuals into illegal investment scams. Advisors should alert their clients to be aware of such scams.

According the OSC, official sounding terms, such as “Prime Bank Notes”, “Prime Bank Debentures” or “Roll-Over Programs” are being used to lure investors into illegal schemes. These schemes sometimes claim affiliations with major international organizations, like the International Chamber of Commerce and International Monetary Fund.

The OSC says persons promoting these schemes lead prospective investors to believe that they are being allowed to participate in an otherwise secret trading regime. Often some part of the schemes would be transacted through a country regarded as a secrecy haven. This “offshore secrecy” feature conceivably enables investors to avoid paying any taxes on proposed investment returns.

Promises are made to investors of above average returns or guarantees of unrealistic rates of return within a short period of time, completely risk free.

The OSC and the RCMP would like to remind investors that when in doubt about the legitimacy of a proposed investment, one can usually rely on the basic principle of investing: “If it sounds too good to be true, it probably is”.

Anyone solicited to invest in a “prime bank” investment scheme or anyone having information pertaining to this or a similar scheme, should contact the Commercial Crime Section of their local RCMP division and the OSC or their local securities regulatory authority.
-IE Staff