The Commission has had a new twist to an investment scam brought to its attention and wishes to warn local investors about it.
Over the past few years a number of local residents have been "cold called" by brokers from outside the Island attempting to get people to invest in shares in small overseas companies. The general pattern has been for the value of these thinly traded shares to dwindle and for the investor to be stuck with them either not wishing to realise the loss or simply finding it impossible to sell. In some cases investors have not been properly registered as shareholders.
A recent development that has been reported is for the investors to be contacted by a different overseas broker who offers to buy their shares at an inflated and very tempting price. However, before the deal can be completed, the investor is asked to provide a substantial amount of money for a "refundable bond" and they are asked for their bank account details. Far from resulting in recovery of the investor's money, responding to this kind of approach is likely to lead to even greater losses.
Firms conducting investment business in the Bailiwick are required to be licensed by the Commission to do so. If residents are approached by cold callers or by follow up operations as described above, they are strongly advised to contact the Investment Business Division or Enforcement Division through the switchboard number of 712706.
The Commission's warning from June 2002 about cold calling can also be viewed by clicking on the article called "Cold Calling - 1 June 2002" which can be found at the bottom of this list. Similar warnings and advice on other types of investment scams have been issued by other international regulators including the Australian Securities and Investments Commission and the United States Securities and Exchange Commission.
The Commission advises that investors do not part with any money on the back of such approaches. However, if anyone has paid over any money in these circumstances they are asked to contact the Commission's Enforcement Division with details.