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March 30, 2004
For immediate release

PEI Securities Office Issues Securities Warning to Investors

Office of the Attorney General

The PEI Securities Office is warning the public of individuals using boiler-room style sales tactics to take money from investors while claiming to offer "exempt" securities.

The Prospectus Exemption, part of Multilateral Instrument 45-103 under Securities law, lets some companies sell shares without filing a prospectus. The rule is beneficial to the economy, as it makes it less expensive for small businesses to raise money. The rule also protects investors; only Accredited Investors (those who can afford to risk and possibly lose their entire investment) qualify to invest.

You can qualify as an Accredited Investor if you have more than $1,000,000 in financial assets (not including your home). You can also qualify if your annual income was more than $200,000, or if you and your spouse had an annual income of at least $300,000 for the last two years and you expect to exceed that income in the current year.

When they call, individuals may claim, as an example, that Multilateral Instrument 45-103 means that you can invest in their promising small business before shares are available to the public. You may be told that the company will soon list on the stock exchange, with a share price much higher than the current price. You may be told that the company has a much higher price listed on the Internet.

To make it seem like they are complying with securities laws, the individuals may encourage you to sign a form stating that you qualify as an Accredited Investor, even if you don't qualify. They use high-pressure sales tactics and glossy brochures to sell you shares based on claims of a revolutionary product but there is usually no real product involved. In reality, these individuals have only one business in mind pocketing your money.

You can avoid being a target if you watch out for:

- Promises that a company is about to "go public" or list on a public stock exchange. Obtaining a listing is a complex, lengthy process and never a sure thing. Promoters know that stories of "hot" initial public offerings are tempting and may hook reluctant investors.

- Unsolicited phone calls. Don't be afraid to tell a salesperson not to call again, or simply hang up.

- High pressure sales tactics and repeat callers. Take the time to research any investment opportunity and get a second opinion. Don't rely on Internet information you don't understand.

In addition:

- Never sign documents you have not read, or do not accurately reflect your financial situation. If someone asks you to fill out a form with false information, they are not someone you should rely on for investment advice.

- Check the registration of the person or company offering the investment before you invest. Call the PEI Securities Office at (902) 368-4552.

-30-
Media Contact: Jennifer MacLeod
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