The Alberta Securities Commission (ASC) is warning Alberta residents of a possible investment fraud that is carried out through affiliations with religious groups.
Due to recent inquiries made to the ASC, investors are being warned to be cautious of individuals who use their affiliations with religious organizations to solicit members of such groups for investment opportunities.
“Religious affiliations aside, investors should be taking care in selecting their investments and investment advisers. There is nothing wrong with dealing with an adviser who shares your religious beliefs, but using that as your only criteria for selecting an investment is not enough,” said Wayne Alford, ASC Director of Enforcement.
“There are many unscrupulous individuals who will use any method to gain your trust and take your money,” Alford said. “Because religion relies on faith, scam artists can often obtain trust through that faith.”
Alberta investors are warned to look out for the following warning signs:
- Predictions of imminent financial or social crisis;
- Claims to reinvest portions of profits in worthy causes;
- Investment salespeople who equate faith in their investment opportunity to religious faith;
- Requests to keep your investment confidential;
- Promises of high returns and low risk.
“Many people think that because an investment has been referred to them from someone who shares their faith or religious beliefs, that it’s a safe investment.” says Alford. “That is simply not the case. No matter who the recommendation comes from, people need to investigate before they invest.”
To prevent yourself from becoming a victim of investment fraud:
- Call the ASC to verify that the seller is registered to sell investments;
- Never invest in something you don’t understand;
- Ask questions and obtain a second opinion from a third party;
- Always ask for documentation for any investment and read it carefully before investing;
- Don’t allow yourself to be pressured into an investment decision.
Religion-based or “affinity” scams are not a new phenomenon in Canada. From 1995 to 1997, former Seventh Day Adventist church pastor, Gary Stanhiser used his religious affiliation to bilk more than $11 million from 300 investors in British Columbia and California.
If you have questions about the legitimacy of an investment or an investment salesperson, call the ASC at (403) 297-6454.
The Alberta Securities Commission is the industry funded regulatory agency responsible for administering the Alberta Securities Act. Its mission is to foster a fair and efficient capital market in Alberta and, together with the other members of the Canadian Securities Administrators, develop and operate the Canadian Securities Regulatory System.
- 30 -