You ASC'd Blog
We’ve created this blog to present you with answers to some of the more common questions we receive from investors. We'll have different subject matter experts blogging about what they know best and we'll update it as new blog topics arise. We hope you'll find it interesting and helpful.
In the second blog of our series showcasing the people at the ASC and the roles they play in investor protection, we spoke with Janet McCready, Team Lead, Litigation, about herself and her role at the ASC.
What led you to become a lawyer for the ASC?
I actually did a degree in Zoology and worked at the Calgary Zoo talking about the pandas in 1988. However, there weren’t many full time opportunities in Zoology, so I started considering law as it was an area I had interest in. After I received my law degree from Dalhousie University in Halifax, N.S., I worked in different roles for a few years, ending up at a small litigation firm. After 15 years in practice I was ready for a change, so when a friend suggested that I apply to the ASC, I did, and it was such a great decision!
What gets you up and into work every morning?
In addition to going after the bad guys, it’s refreshing to work with people who are so passionate about public service. Investors who have been the victim of fraud don’t usually get their investment back as the money is gone. That said, it’s very satisfying and motivating to let fraudsters know they can’t get away with it – and stop them from taking from others. It also sends a message and hopefully educates more investors. The denial of some who are accused of misconduct and their inability to take responsibility for their actions drives me crazy! I’m glad we have a strong regulatory system so if people want to invest money, they can do it with their eyes open and with full disclosure. Their money is their money and nobody else is entitled to it.
What is your team responsible for?
Our primary role is to take allegations to a hearing after an investigation has been conducted. As Staff counsel, we appear before a panel of the Commission and introduce documents and witness testimony in support of the allegations made. We also consult with other ASC teams when there’s a legal issue arising during an ongoing investigation. This can mean applying for early relief, such as an Interim Cease Trade Order (ICTO) to temporarily pause trading or a Freeze Order to preserve assets while further investigations continue, providing recommendations, preparing for hearings, court applications and appeals.
What is your proudest accomplishment at the ASC?
Soon after I started, I helped work on a case where fraud was discovered early and there was over a million dollars left in the fraudster’s bank account. We obtained a receivership order from the court, worked with the receiver, and when it was settled, some of the investors actually got some money back – up to 50 cents on every dollar they invested. While that doesn’t fully pay back all they’ve lost financially or emotionally, it is a help. Overall, the dedication of the team and collaboration with others allowed us to minimize the financial harms the victims suffered.
How do you feel you help Albertans?
I would say through information and deterrence – shining a light on what’s going on. Once a matter goes to a hearing, it’s open to the public. Sometimes investors come to the hearings so they gain information this way, as well as through various ASC communications. I hope this information helps people become more skeptical and to not simply trust what they are told. Do your homework. Call the ASC or visit our website if you have any questions or concerns. Before investing, check your advisor’s registration. There are resources available to help ensure that you’re doing all you can to protect your money.
Research shows that Albertans are the most-at-risk Canadians for investment fraud. Alberta has a booming market filled with many great opportunities, but with that comes financial fraudsters looking to take advantage.
One of the best ways for Albertans to protect themselves is by improving their financial literacy. Here at the ASC, we work to provide a wide variety of unbiased, informative educational resources that Albertans can access on-demand to fill whatever informational gaps they might have. Because as the old saying goes, “knowledge is power.”
While it is important to have a firm grasp of financial terminology, we also know that there’s a laundry-list of other activities (like taking out the garbage or raking the leaves) that we would rather do then to study it. Recognizing this, the ASC is launching a fun and engaging campaign and contest to help Albertans brush up on their knowledge during Financial Literacy Month.
Leveraging our informative videos featuring personal finance expert Kelley Keehn, Albertans can participate in a contest to determine how financially ‘Keehn’ they are. The contest will run via Facebook and Instagram advertisements – so keep your eyes peeled! – to participate all you need to do is fill in a missing “blank” from a featured Kelly Keehn video clip, and follow the contest rules and regulations. All participants who provide an answer on Facebook will be entered into a draw for a chance to win a Sonos One – Voice Controlled Smart Speaker®. Click here to learn more about the contest and how to participate.
For more helpful information and resources that can help you increase your financial literacy, we recommend visiting CheckFirst.ca. The website has a wealth of information including a glossary of common terms related to financial literacy, six Investing 101 videos with Kelley Keehn and so much more!
If there’s one key takeaway from Financial Literacy month, it’s to remember that you can improve your financial literacy, and by doing so, help protect yourself and your hard-earned money from investment fraud. The ASC is here to help, offering free, unbiased resources for all Albertans to increase their financial knowledge and make investment decisions. While we can’t tell you exactly what to do, we can help provide the information you need to make a wise investment.
How financially ‘Keehn’ are you?
The air has turned crisper and the leaves are changing colour. You spent the end of summer getting the kids ready for school – you checked off the supplies on their list, prepared lunches, packed bags, signed them up for extra curricular activities, and dropped them off.
Their scholastic journey has begun and they are prepared for future success. Or are they? When planning for their school needs, did you consider what happens when they graduate high school? Do you have a plan to help finance post-secondary education? And is this money secure and safe?
Costs for post-secondary education – universities, trade schools, colleges – are rising every year. One way to help your kids out for their future education needs is through a Registered Education Savings Plan (RESP). If you don’t already, September is a good time to consider investing in one as you prepare them for school and their future.
Why should I consider a RESP for my child?
Contributing to a RESP can make a big difference in terms of how much it will cost you and your child in the future for education. RESPs have many benefits specifically geared to students that other savings plans may not. These include:
- Affiliated government grants. You can apply to the federal and provincial government for grant and tax incentive programs, which will match a portion of the money saved in a RESP.
- Tax-deferred growth. You can contribute up to $50,000 per child to a RESP without any taxes payable on the money earned until it is used. When the money is withdrawn, income earned is taxed at the student’s tax rate – which could be minimal as most students have little or no income.
In addition, by starting early in your child’s life to contribute to an RESP, the more that can be saved due to the impact of compounding interest. For example, you can earn an additional $20,000 by beginning contributions when your child is age 1 versus age 10*.
Making safe RESP investments
You’ve decided to set up an RESP for your child. Great! Now how to do it…
Start by talking to your financial advisor or financial institution. Most banks, credit unions, mutual fund companies, investment dealers and scholarship plan dealers offer RESPs. They can help you plan for future needs and pick out the type of investments that are appropriate for your situation. When considering a provider, ask:
- What fees am I expected to pay, and when?
- When and how much do I have to contribute?
- What kind of investments can I put in the RESP and what are the risks?
- When and how do we receive payments?
- What happens if my child doesn’t go on to further education?
- What if I change my mind?
A handy RESP Checklist can be found on the ASC website that discusses fees, investment risks, and researching RESP providers. The Government of Canada also provides useful information on the program and their grants.
As with any investment, make sure you follow the ‘Check. Protect. Invest’ steps on the ASC’s CheckFirst website to protect yourself and your child’s future from potential investment fraud. Check that the individual or firm is registered to sell securities in Alberta, and if there has been any enforcement history with them. Protect yourself by asking the right questions about any potential investment and watching for red flags of potential fraud. Once you’re confident the investment is right for you and your child, proceed with the final step and…
…invest. Just like when you held their hand on their first day of school, your investment in an RESP will continue to protect and help them as they step out into the world on their own.
*Assumes $200 monthly contribution and a 6% rate of return compounded annually until the age of 18
Red Flags of Investment Fraud
Canada Revenue Agency
The ASC is the regulatory agency responsible for administering the province’s securities laws and is entrusted with fostering a fair and efficient capital market in Alberta while protecting investors. But have you ever wondered who are the people at the ASC, and the roles they play in investor protection? To help answer that question, recently caught up with Dolores Ivany-Fagan, a dedicated 18-year ASC employee currently serving as an Assessment Officer, to learn more about her role and her passion for helping Albertans.
What does your team do the for the ASC?
The assessment team is the first point of contact for the public when they have a concern about an investment they’ve made. Here, we start by receiving complaints from investors and begin the process to determine if it’s an issue that the ASC can assist with. Things move forward from there.
What is your role on the assessment team?
I listen to complaints, discuss the issue with the investor and then begin the overall review process. I read everything potentially related to the situation, gather the individual’s information, do background searches and then combine it all to make an assessment. From there, I make a recommendation as to whether the issue needs to be investigated or redirected to a more appropriate organization.
Why are you passionate about your role at the ASC?
I don’t like the fact that there are dishonest, conniving, and deceitful people who try to take other people’s money for improper purposes. When you’re telling someone you’re going to take their money and invest it, do that. Don’t take it to your bank account and do with it what you please. We all know how hard it is to earn money.
What are your biggest accomplishments?
Two cases that come to mind are ‘WealthStreet’ and ‘Shire’. I had a bad feeling about the two complaints that I couldn’t shake. I searched and found information that helped support moving them forward as cases of fraud. As a result, we were able to take enforcement action on both of them.
What threats do you see right now for Albertans?
A big area of concern is real estate investments – people believe that when their name is on a lease or mortgage agreement they own part of the building. They don’t realize that they are probably in second or third positions of ownership, which can cause issues in terms of getting their money back if something goes wrong. The way offering memorandums are written can be confusing; they are often quite large documents and written in complex legal terms that not everyone understands. It’s so important to understand what you’re signing.
What is your best advice for Albertans who are looking to make solid investments?
Please make sure you check the registration status of your advisor and the registration status of the company. Don’t be fooled by high pressure tactics and do some research. People will spend six months researching a new vehicle, go to the dealership and haggle for $500. Do the same for your investments – that is going to make a lot more of a difference in your future financial security than a car. If, after that, you have a level of confidence that the investment is sound and a good fit for your financial goals, only then go through with it.
The dog days of summer are here, allowing time to relax, rejuvenate and reflect on life. Maybe you’d like to learn something new. Or you’ve picked up a motivational book you wanted to read. Maybe you’ve seen a Ted Talk that got you thinking. Maybe you’ve signed up for a self-help seminar or presentation from a visiting inspirational speaker – perhaps a popular talk show host, an international celebrity or even someone you saw on social media.
It’s empowering to hear how someone overcame adversity or became successful. You feel revved up, inspired, excited – ready to make changes to your life. While you’re at this type of seminar, you’ll likely see other presenters or exhibitors encouraging attendees to learn about whatever ‘expert’ self-improvement advice they have – how to improve your self expression, be a more aware person or improve your financial stability.
Hard stop. You know the headline speaker is genuine/authentic and the event legitimate, but that doesn’t mean that the other ‘expert’ speakers or presenters have been thoroughly vetted. It’s time to think critically – especially if one of the lesser-known speakers is promoting their own wealth management system, selling their books and/or offering up a discounted rate to their own investment sessions, software, or investment opportunity.
Before you sign up with someone who promises to “change your life” financially, be wary:
- Don’t assume that the individual promoting a financial opportunity is legitimate
- Be skeptical of financial promises, especially concerning ‘guaranteed high returns and no risk’ – investments that tout this are scams.
- Don’t feel pressured to ‘buy today’ or believe threats that you’ll ‘miss out’
- Ask yourself if the proposed investment fits with where you are financially in life
- Watch out for the red flags of investment fraud
- Check if they are registered to sell securities or investments and if they’ve ever had any disciplinary action taken against them in the past
Armed with these tips, go enjoy these events and gain new knowledge, ways of thinking and skills to help improve your life. Just make sure that any investment opportunities being presented are legitimate and fit with your future goals before you get swept up in the excitement and feelings of empowerment.
Red Flags of Investment Fraud
Recognizing and Avoiding Scams
The number of seniors in Alberta is growing, and Albertans aged 55 and over report being approached with potentially fraudulent investments more often than any other age group. Recognizing this, the ASC ran a strategic month-long campaign to connect directly with Alberta’s senior community.
The campaign was comprised of several elements to increase and expand our reach beyond seniors to include caregivers, family members and the general public, as well as to expand outside major cities to secondary and rural markets.
As part of the campaign, the annual Investor Index survey was completed that included a new oversample of Albertans 55 years of age and over. Key findings from the survey were leveraged throughout the campaign to drive Albertans to the CheckFirst.ca website.
We also revised the seniors page on CheckFirst.ca to better direct people to our free, unbiased resources and new items related to the campaign, including a revised ‘How Safe is Your Nest Egg’ quiz/contest and “Spot and stop senior investment fraud” brochure. A total of 678 people took the quiz – three of which are receiving a prize of a $50 Visa gift certificate!
Our CheckFirst booth appeared at events in St. Paul, Alberta and, once again, for Grandparents’ Weekend at Calaway Park. At both events, we highlighted the resources we have available to help senior Albertans increase their financial literacy and avoid investment fraud. In addition, we reached out to seniors associations and community groups in both urban and rural centres, providing details of the online quiz/contest, the CheckFirst.ca/seniors web page and other seniors resources. This represents a key step to building stronger relationships with many small communities across Alberta.
Key to extending our reach to Albertans is working with media. Our initiatives were covered in over 45 urban and rural publications, including two television interviews (CTV and Global) and CBC story related to our Calaway Park pop-up and senior fraud. In addition to driving significant interest to the CheckFirst.ca website, we reached over 1.5 million Albertans through media coverage alone in June.
Overall, we’re pleased with the number of Albertans we were able to reach– either in person or through other means – and look forward to continuing our work with the senior community throughout the year!
Spot and Stop Senior Investment Fraud
As an informed investor, you research investment opportunities before taking the leap with your hard-earned funds. You utilize online resources and tools, and review materials provided by your financial institution or unbiased third parties like the Alberta Securities Commission.
You also might take advice from the people you trust most like a family friend, fellow congregation member or neighbour. Unfortunately, while none of us like to think about it, investment fraud is sometimes perpetrated by people we know and trust. When scam artists prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups, it’s called affinity fraud, and it happens more often than you might suspect.
There are a number of things you can do to determine if the investment being offered through a personal relationship is real or not. Before you consider investing in something, make sure you review the following checklist in order to help you spot affinity fraud:
- Be suspicious of investments described as ‘exclusive’ or only offered to particular groups (i.e. congregation members or club members only).
- Watch out for advisors who exploit a personal connection: while you might know the advisor from your local religious group or community center, be sure to research backgrounds and credentials regardless before making investments.
- Beware of referrals: while your friends might be singing the advisor’s praises, they might not have conducted background checks and could have been selected by the scam artists as early influencers, who then spread the word about the scheme.
- Don’t be hooked by spectacular returns and low risk: if it sounds too good to be true, it likely is. Make sure you get a prospectus, financial statements or other written information about the opportunity and review it carefully.
- Consult a knowledgeable third party not involved in the investment such as a lawyer, banker, accountant or registered financial advisor before deciding to participate in an investment.
Remember that the most important step in ensuring your protection in any investment is to first check your advisor’s registration, and then consider the above items. Don’t let someone exploit your trust or friendship for their own financial gain.
Spot and Stop Senior Investment Fraud
It’s estimated that by 2035 there will be more than one million seniors in Alberta (65 years of age and older), which equates to one in five Albertans. While many of us have the utmost respect for the seniors in our lives, unfortunately there are those who will exploit seniors’ often polite and trusting natures for financial gain. As such, the ASC is hosting a Seniors’ Month Campaign to provide key information and resources on financial matters to as many Alberta seniors, family members, caregivers and others who work with this important group as possible.
Early in the month, the ASC will release the results of a new research survey with specific data pertaining to seniors and their perspective on investing, financial fraud and financial abuse. Keep an eye out on this blog for more details on the data, key learnings and useful information.
We will also be offering a fun and interactive quiz for individuals 55+ years of age and older to test their financial and investment knowledge called ‘How Safe is Your Nest Egg,’ and provide prizes of $50 gift cards to five lucky people. To brush up on your knowledge before you take the quiz, the ASC encourages you to browse checkfirst.ca/seniors to read relevant materials with unbiased and helpful information. For your chance to win a $50 Visa gift card, visit checkfirst.ca/seniors from June 4 to 29, 2018 to take the quiz.
You will find our investor education team popping up across Alberta during the month, including Grandparent’s Weekend at Calaway Park on June 23 and 24. The ASC will be on site to provide information and resources, while distributing free cotton candy and games vouchers. Can’t make it to Calaway Park? The ASC will also be present at the annual Family and Community Support Services seniors event in St. Paul, Alberta.
Keep an ear out for ASC messages on radio stations across the province this month as we highlight information about how seniors can keep themselves safe when investing.
Finally, if you’re part of a seniors group in Alberta that could benefit from financial fraud or financial abuse information or resources, please connect with us directly at firstname.lastname@example.org. We also encourage you to browse our CheckFirst.ca website for additional information, tools and unbiased resources. Let us help you empower yourself and your loved ones to make wise investment decisions and avoid financial fraud.
When you think of spring cleaning, a seemingly endless list of household tasks come to mind. Wash the windows, declutter your home, or tackle a long-overdue project. But have you ever considered applying that same mindset to your finances? May is the perfect time to review your finances, including your investments, to set you up for success for the year ahead.
Here are the ASC’s top tips for spring cleaning your finances:
Organize your financial documents – Spring cleaning is all about organizing and you can do the same with your financial documents. Sort through all your documents, destroy items you no longer need and organize everything you keep into a filing system that makes sense for you. If you prefer to manage your finances electronically, do the same on your computer, but be certain to backup all documents onto an external hard-drive or secure cloud service.
Review your financial statements – It’s easy to allow financial documents like bank or investment statements to pile up unopened. Take the time to open all your financial documents that you’ve received and comb through your statements. Be sure you understand the investment fees you’re paying, and how your portfolio is performing. Be sure to note any questions you have for your financial planner or investment advisor. Follow up if there are any changes to your accounts or new investments that you do not recall making.
Connect with your financial advisor – After reviewing all of your documents and compiling a list of questions, reach out to your financial planner or investment advisor for an annual check-in. This is a great opportunity to not only address the questions you have from your statements, but to also review your investments based on any life changes you’ve recently had (promotion, new job, marriage, new child, etc.) and to adjust your course accordingly.
If you don’t have a financial advisor or investment advisor? If you decide to go this route, consider meeting with a few individuals to see who might be a good fit for you. Be sure to check the registration of any investment advisor you meet with in advance. Visit CheckFirst.ca for more information on questions to ask a potential advisor and how to check registration.
Re-evaluate your budget – With 2018 into its fourth quarter, now is an excellent time to review your finances to see how you’re tracking against your goals for the year and plan ahead for any upcoming expenditures. Consider checking your budget against a worksheet like the one on CheckFirst.ca.
For more information on making wise investments, or to learn more about investing in Alberta visit CheckFirst.ca for helpful tools and resources.
The law is a complex thing. There are civil, criminal and administrative branches. There are also practice areas that may seem similar but are completely different (e.g. corporate law, tax law, securities law) and various regulatory organizations. If you have an issue, or think you’ve been scammed, how do you know who to contact? Understandably, it can be confusing, so in honour of Law Day, we wanted to offer more clarity around securities law, and what exactly the ASC does and does not do.
Who is the ASC?
The ASC is the regulatory agency responsible for administering the province's securities laws. It is entrusted with fostering a fair and efficient capital market in Alberta and with protecting investors.
The Securities Act (Alberta) is the legislation designed to ensure that Alberta’s capital market operates fairly and efficiently for participants and that investors have timely, accurate information on which to base investment decisions. It also ensures that those who sell securities in Alberta are registered and that they conduct themselves according to applicable laws and professional standards.
What is a security, actually?
Generally speaking, “securities” are issued in exchange for investing in a business. These kinds of transactions must comply with securities laws. Loans, promissory notes, shares, and units are just a few of the examples of things that are considered securities. In a nutshell, if you give someone money and expect to make a profit from their efforts or those of a third party, it’s probably a security and they’ll need to comply with securities laws.
In addition, anyone in the business of helping to find investors for persons or companies needing funding or advising people about investing may also be subject to securities laws. They may need to be registered, for example, as an investment dealer, adviser or an exempt market dealer – unless they are relying on an exemption from the registration requirement.
The bottom line is, if people are being asked to make a loan or other investment, securities laws need to be followed.
What do people mistakenly contact the ASC about?
The ASC does not administer any laws other than those under the Securities Act (Alberta), but we often receive inquiries regarding matters don’t fall under our jurisdiction. While we’re always happy to point people in the right direction, ultimately, you’ll need to connect with the appropriate organization to address questions or complaints that aren’t securities-related. Here are some issues that the ASC is often approached in regards to, and where they should be directed instead.
There are multiple variations on this scam:
A call purportedly from the Canada Revenue
Agency (CRA) saying you owe money, and threating to take severe action if it is
not paid immediately.
A communication purportedly from the CRA requesting
personal information (social insurance number, credit card number, bank account
number), or urging you to visit a (fake) CRA website to input this information,
so you can receive a tax refund.
Canadian Anti-Fraud Centre
A job advertisement posted on Kijiji or other internet
site states that the applicant has to supply money to be considered.
Any questions related to segregated funds
The insurance representative who sold you the fund
Alberta Insurance Council (AIC) 403-233-2929
An email or text from a bank (RBC, CIBC, Scotia, etc.) saying your account is locked
Anything related to the licensing of security
Solicitor General – Government of Alberta
Any issues related to the purchasing of goods or
services, which are not securities/investments on Kijiji, Craigslist, EBay or
other online sale sites
Help Desk/Fraud Desk for the specific website on which
you made the transaction; contact information will be on each site
Anything related to Olympia Trust or other trust
companies in Alberta
Disputes regarding fees, accounts, etc.
Superintendent of Financial Institutions Alberta
If you do have a question related to securities and investments, contact our Public Inquiries Office toll-free at 1-877-355-0585 or via email at email@example.com. Happy Law Day!
The Canadian Bar Association
Law Day Alberta