(May 16 – 14:45 ET) – The OSC was one of 21 securities regulators from eighteen countries around the world who co-ordinated their efforts, as part of an “International Surf Day,” to identify securities and futures fraud and abuse on the Internet. Regulators concentrated on fraudulent solicitation of investors, manipulation, the circulation of false or misleading information and insider trading.

Over 220 staff members from the 21 participating authorities visited over 10,000 sites, totalling nearly 1,000 hours of global participation. Of these sites, approximately 1,000 were identified for follow-up review, including almost 400 sites involved with cross-border activity. That review is now underway and could result in enforcement action.

Colin McCann, of the OSC’s Enforcement Branch, indicated that five staff members surveyed a total of 257 Web sites. From this, they identified a number of websites dealing primarily with possible unauthorized offerings of securities, several in connection with offshore banking and investment services. The majority of offerings appeared to overstate the potential earnings while giving little or no mention of risk or suitability.

“The Internet can be an invaluable tool for investors and offers a wealth of information about financial markets and personal investing,” said McCann. “However, investors who venture onto the World Wide Web should keep in mind that it is also being exploited by investment con-artists and fast-buck artists.”

The Ontario Securities Commission is urging investors to be alert to signs of fraud and to refer to the “Investor Alert” section on the OSC’s Web site.

Following up on the OSC announcment, the Investment Funds Institute of Canada notes that it has
recently published a “Best Practices Notice for Internet Web Sites” for its members addressing such issues as jurisdiction, which documents to post to a web site, protecting the integrity of documents on web sites, security, confidentiality, privacy statements, and chat groups. The IFIC guidelines can be found at www.ific.ca.
-IE Staff