BCSC warns of possible ‘recovery room’ scheme

first_img Don’t believe the hype: BCSC proposes new rules for stock promoters “Recovery room schemes involve companies that contact investors who may be losing or may have lost money in a current investment with an offer to buy their shares at an inflated price or exchange them for shares in a different company. Once investors agree to the deal, the operators of the scheme ask the investor to first pay a fee for the transaction, or some other kind of cost to exchange the shares,” the BCSC explains. In this case, regulators say a Thailand-based company called G.W. Trust and Transfer is directly soliciting Morgan Dragon investors by e-mail and phone, claiming that it is acting as a purchaser wishing to buy back the units/shares from investors; but demanding an upfront fee. The OSC and ASC issued warnings about a possible advance fee scheme in this case last month. Following similar alerts from the Ontario Securities Commission (OSC) and Alberta Securities Commission (ASC), regulators in British Columbia are also warning about a possible “recovery room” scheme targeting investors in Morgan Dragon Development Corp. The B.C. Securities Commission (BCSC) issued a warning Tuesday about G.W. Trust and Transfer related to what it says appears to be a recovery room scheme that is targeting investors who purchased securities from Morgan Dragon, which is currently subject to an OSC cease trade order. Related news Keywords Investor protection,  Investment scamsCompanies British Columbia Securities Commission Facebook LinkedIn Twittercenter_img OSC finalizes DSC ban Retail trading surge on regulators’ radar, Vingoe says James Langton Share this article and your comments with peers on social medialast_img read more