New Brunswick Securities Commission

Illegal distributions and registrant misconduct top 2009 complaints list (10/02/05)

NB 161

Feb. 5, 2010

SAINT JOHN (CNB) - Illegal distributions and registrant misconduct were the main focus of investigations by the New Brunswick Securities Commission (NBSC) in 2009. Most investor complaints were about investment solicitations by telephone, email and through the Internet.

The majority of complaints were regarding individuals or companies offering securities that they were not registered to sell in New Brunswick. The investments offered included gold, oil and gas exploration ventures, and international real estate development.

Investors also reported potential misconduct by advisers and brokers, including complaints that insufficient information was being provided, or that there was an inconsistency between what the investor thought they were buying and what they actually bought. There were also some complaints about potential misuse of leveraging for investments.

"The NBSC is the place to call to report any suspected investment fraud or improper conduct," said Rick Hancox, executive director of the NBSC. "The sooner we know about a potential threat the quicker we can act to prevent further harm to New Brunswick investors."

"This message is reinforced by our Invest in Knowing More investor protection awareness campaign," he said.

Complaints to the NBSC are assessed to determine if there is a potential violation of securities law which requires further investigation. Complaints that are not securities-related are referred to the appropriate agency.

"We are proud to say that every complaint received in 2009 was addressed by our enforcement team and that we did not have to turn anyone away due to resource limitations," said Jake van der Laan, director of enforcement. "The NBSC has extensive powers to investigate any alleged breaches of the New Brunswick Securities Act, to issue orders to protect the public and to enforce compliance with the regulations."

In 2009, the NBSC started using an Internet surveillance tool that identifies potentially fraudulent investment websites. This tool, developed in-house, generates alerts for staff to follow up. These alerts have led to investigations, have added new entities to the NBSC's online caution list, and have generated referrals to other jurisdictions.

The Canadian Securities Administrators (CSA) released the 2009 Enforcement Report on Feb. 1. The report highlights enforcement activities and provides statistical data and case summaries that illustrate the work of CSA members.

The report is available on the CSA website and the NBSC website.


MEDIA CONTACT: Michelle Robichaud, communications officer, New Brunswick Securities Commission, 506-643-7045.