Beware of bogus derivatives regulator, says CSA

Regulatory group warns public of website ostensibly used by fraudsters to fool prospective investors

Beware of bogus derivatives regulator, says CSA

The Canadian Securities Administrators (CSA) has issued a warning to the public about an entity that falsely claims to regulate derivatives in the country.

In a statement, the CSA flagged the website of the non-existent “Canadian Office of Derivative Trading.” The site contains numerous false statements, claiming that the CODT:

  • regulates “the futures contract market in Vancouver”;
  • oversees “all financial related activities of all business entities covered by this commission within British Columbia”;
  • “supervises, and at all times regulates and inspects all financial-related institutions within its covered area of responsibility”; and
  • “develops financial regulations that directly applies to the administration of the Canada's banking institutions, trust companies, insurance companies and investment business”

“In Canada, securities and derivatives trading is overseen by provincial and territorial securities regulators,” the CSA noted.

The regulatory group believes that the site is being used by fraudsters who tell prospective investors that they can go there to check the registration status and disciplinary histories of the investment entities being promoted for certain schemes. The site uses the British Columbia provincial crest, which could lead investors to believe it is legitimate.

The CSA said that the site yields fake search results indicating that a certain entity has no regulatory issues. “That positive search result may encourage the investor to invest,” the regulatory group said.


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