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November 6, 2003
For immediate release

CRIME PREVENTION WEEK Investment Fraud: The Best Defence is a Good Offence

Office of the Attorney General

As part of Crime Prevention Week in Prince Edward Island, the Office of the Attorney General and the Canadian Securities Administrators (CSA) are urging Island investors to take steps to protect themselves against investment fraud. This type of securities offence is widespread – Canadians lose more than $5 billion to fraud annually. Investors should equip themselves with the tools and information available to avoid becoming victims.

“Many Islanders invest their hard earned money to ensure a prosperous future for their families and to plan for retirement,” said Attorney General Jamie Ballem. “Crime Prevention Week is an opportunity to promote investor awareness and education to protect our families and our financial well being.”

The first step is to ensure that the dealer is registered and is in good standing with the securities regulator of the province or territory, and that the investment product proposed is legal.

Furthermore, investors should not rely on marketing material to assess the legality of an investment. Instead, they should read the prospectus, the document that provides potential investors with information that is essential in making a decision to buy an investment product. It includes details on the issuer such as its senior management, operations, business and investment plans, risk factors, and intended use of proceeds from the share issue. The prospectus, which is a mandatory document for most share issues, is filed with the securities regulator and is publicly available on The System for Electronic Document Analysis and Retrieval (SEDAR) at

Investors should be mindful of the most common indicators of investment fraud when considering an investment. Red flags include:

• Unrealistic promises of spectacular returns on investments, higher than current bank rates, with little or no risk;

• Enticing offers of tax avoidance through offshore investment opportunities;

• Ads or seminars promoting unregistered investments;

• High pressure sales tactics, e.g., claims that the offer will expire shortly or that you are one of the lucky few to be invited to invest.

To prevent being taken advantage of, it is essential to use good judgment. If an offer seems to be too good to be true, it most likely is.

Investors who fall prey to investment fraud do have legal recourse. They can file a complaint with the securities regulator who may investigate the matter or refer it to the appropriate authority. However, securities regulators are not mandated to compensate investors for financial losses. In order to recover their money, investors must often resort to legal action.

“Investors should be aware that a court case can be a difficult and time-consuming process and offers no guarantee of recouping losses,” noted Stephen Sibold, Chair of the CSA. “The old saying, the best defence is a good offence applies here. “

The CSA offers reading material and tools that provide information on investment basics such as choosing a dealer, planning for your financial future, and understanding the stock market. To obtain these documents free of charge, contact the PEI Securities Office at or visit the CSA Web site at

Media Contact: Jennifer MacLeod
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