Financial regulators are warning Manitobans about a letter delivered to mailboxes in what is known as an attempt to exploit fears of a recession related to the COVID-19 pandemic.
The Manitoba Securities Commission issued an investor alert on Thursday “warning the public to exercise extreme caution regarding the aggressive promotion of Crestview Exploration Inc., a British Columbia gold mining company,” said a news release. of the MSC.
The promotion came in the form of a letter sealed in a white envelope without return address, marked in bold red letters, “CORONAVIRUS AFFECTING MARKETS: READ NOW”.
Copies have been delivered to homes in Manitoba, Saskatchewan, Alberta and British Columbia. this week, said the MSC.
The letter from someone describing himself as a “market analyst and geologist” makes “exaggerated statements about Crestview, predicting that its stock price” will skyrocket as the recession hits, “” said the MSC.
The regulator received complaints about the letter this week, said Jason Roy, a senior investigator with the MSC.
Crestview Exploration, listed on the Canadian Stock Exchange and the Frankfurt Stock Exchange, released a statement on Wednesday saying it was not responsible for the letter.
“… To the best of our knowledge, no officer and / or director has been involved in the dissemination of this letter,” said the press release.
Latest local news:
“Crestview did not pay any compensation, nor did it ask this analyst to approve the company or its actions.”
The company urged investors to visit its website for up-to-date information on the company and its mining assets.
“Crestview advises all investors and potential investors to properly verify the information provided by any individual and / or third party regarding purchase recommendations,” said the statement.
Roy told CBC News that the MSC investigation is underway and that he has not yet determined who distributed the letters. He said he has not yet determined whether the person named in the letter uses a pseudonym.
The investigation will examine whether it is a “pump and discharge” case, said Roy.
In this scenario, the MSC claims that anonymous people are talking about a stock that belongs to them, citing supposed “inside information”. When people buy into the hype and start buying stocks, its value increases.
“The original promoters sell their shares at inflated prices and the share price drops rapidly. The rest of the group is left with shares that are worth much less than what they paid for,” said the MSC on its website. Internet on investment fraud.
Roy said the MSC wanted to send a warning to Manitobans during the investigation.
Other provincial securities regulators, including those in Alberta and British Columbia. also issued warnings on the letters.
The securities commission stressed the importance of researching before buying or selling an investment, adding that aggressive promotions “can make false statements of material profits and baseless stock price projections”, a declared the MSC.
“Most of the aggressive share promotions in recent years have been done via unsolicited email or social media, but promotions delivered by mail carry the same risks,” said the regulator.
Manitoba Securities Commission Investor Alert: