To show how easy it is to fall prey to an investment scam, the Alberta Securities Commission staged a fake investment seminar that promised attendees could “profit like the experts.”

Mid-way through the seminar, held Feb. 22 and attended by 22 prospective investors, an actor posing as “British-born financier” Jonathan Fisher — a persona created by the regulators along with his fake company Maplestock Investments — revealed the trickery.

“People continue to fall for investment schemes and we really felt we had to do something bold to get people’s attention,” Alison Trollope, director of investor education at the ASC, said in an interview.

The commission now plans to broadcast a video of the faux seminar to get the lesson out to investors at large.

The ASC went to great lengths, tapping the annual budget for fraud prevention month to hire an agency to help design the ruse, print professionally designed stationary and business cards, targeting 165,000 people via social media including Facebook and Craigslist, and lay out a “free” lunch for prospective investors.

An event web page was created and visited by 8,500 people, and 48 registered for the fake seminar.

Trollope said the commission had some reservations about tricking people, and consideration was given to how angry some might be at being fooled by an agency that is there to protect their interests.

“Not only were we tricking people, but in a poor economic climate, we really don’t want to trick people,” she said.

But she noted that “real-life scam artists go to these extreme lengths all the time to convince people to hand over their hard-earned money” and the regulator’s objective was “to show people how easy it is to appear legitimate.”

Five per cent of Albertans reported falling victim to investment fraud, according to a 2016 study conducted by Innovative Research for the ASC, though Trollope says the figure is probably higher because investors who get burned are often reluctant to report it.

In a poor economic climate, we really don’t want to trick people

“People are embarrassed or don’t think anything can be done,” she said, adding that even the 5 per cent figure means more than 200,000 Albertans have fallen victim to investment fraud, and that’s “too many.”

Trollope said the ASC’s stunt didn’t get an angry response from the audience at the fake investment seminar.

“The vast majority stayed and talked to us afterwards and asked questions about how they can protect themselves from investment fraud,” she said, adding there was a member of the regulator’s enforcement staff on hand at each table to speak with attendees.

“The large majority of them thanked us. We had planned for a lot of scenarios – that was one scenario we had not planned for,” she said.

Financial Post