New Brunswick residents are receiving an increased volume of investment solicitations from companies that are not registered to sell investments in the province, warns the Financial and Consumer Services Commission (FCNB).
The enforcement division of FCNB is concerned about reports that two companies, MagellantradingFX and Magellan Trading Group, have been cold calling New Brunswickers and soliciting their investments. These companies are not registered to sell investments in the province. They appear to be located offshore and claim to specialize in foreign exchange, options and futures trading, all investments that traditionally are high risk and not for the average investor.
“Before making any investment, it’s important to check to make sure that both the company and the salesperson are registered to sell securities in the province,” said Jake van der Laan, director of enforcement with FCNB. “No matter where they are located, persons or companies selling investments to New Brunswick residents are required to be registered with us, unless they qualify for specific exemptions.”
“Once you’ve sent money overseas, it becomes very difficult to get your money back,” said van der Laan. “Taking precautions, such as checking registration before investing, could help save your financial future.”
There are many illegitimate entities out there looking to convince people to invest with them. They often try to lure investors by:
- using company names which sound official and that sound similar to legitimate companies;
- using professional looking websites, which appear on their face, to be very legitimate; and,
- using the method of cold calling which is the sales technique of approaching potential investors who have no expectation of the contact, typically by phone, but which can also be done by email or through social networking sites.
It is important to use caution when approached to purchase investments from an unknown or an unfamiliar person or company. There are restrictions on the types of telephone solicitations allowed in New Brunswick.
New Brunswickers who have been approached by these companies or other unregistered companies soliciting investments are encouraged to contact FCNB immediately through FCNB.ca.
Residents can use the Registration Search Tool on the FCNB.ca website to check if a person or company is registered. The site also has resources and information to help New Brunswickers make informed financial and consumer choices.
The Financial and Consumer Services Commission provides protection to consumers and investors from unfair, improper or fraudulent practices. It brings together regulatory authorities for securities, insurance, pensions, consumer affairs, co-operatives, credit unions, caisses populaires, and loan and trust companies. It is an independent Crown Corporation self-funded by the fees and assessments paid by the regulated sectors.