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T&T Securities and Exchange Commission: Don’t fall prey to schemes
Officials of the T&T Securities and Exchange Commission (TTSEC) are appealing to citizens to be responsible and not fall prey to investment schemes. The strong warning came from Arlene Stephen, TTSEC’s director of corporate communications and Raphael Romany attorney-at-law, Legal Advisory and Enforcement Division, when they spoke at the University of the West Indies (UWI) Alumni Association’s investor education programme at the St Augustine campus, St Augustine.
Stephen educated the audience on the role of the TTSEC, whose mandate is to be the regulator of the industry and to empower the investor, promote integrity and transparency of the securities and market, by educating citizens on their rights to make informed decisions on investments. She also told them of the differences between various investment instruments and alerted the audience to many scams that appear to be legitimate, including Internet scams, boiler room, pyramid and ponsi schemes.
Stephen made reference to Bernard Madoff’s US$6.48 billion scheme for which he was eventually caught and sentenced in November 2008. Another example was a local pyramid scheme orchestrated by Tour company, which was established since 2005, where they were offering the public three products paying up to 15 per cent every 15 days. She said there were more than 3,700 subscribers with a total investment of $43.5 million in that scheme.
Romany warned citizens against being too gullible when offered investment opportunities. He advised them to follow the ABC rules of the TTSEC—ask questions, be aware of investment fraud and check the TTSEC first.
He said the TTSEC is working behind the scenes, not only to help investors, but to stop scams through their marketing surveillance and intelligence programme. He said they investigate and pick up discrepancies through simple avenues like advertising, billboard information and articles printed in the daily newspapers. Romany explained that all organisations must be registered with the TTSEC before engaging in any kind of trading and investment activity. “All information must be disclosed to the TTSEC as well,” he said.
He said investors must check to see if any individual or companies are registered with the TTSEC and what they are registered to do before engaging in any transaction, make sure the company has solid referrals and ask a lot of questions. Romany said the Securities Act 2012 has been amended and includes very rigid requirements for disclosure. “This is to ensure that people are qualified and have the financial backing to engage in any trading or investment activity,” he said.
The fines and penalties in the amended Securities Act have increased significantly, he said. For example, for each breach in the Act, the fine increases from $50,000 to $500,000 and for market manipulation up to $2 million and five years imprisonment.
Romany referred to other examples of how the TTSEC managed to intercept underhand dealings by companies registered with the Commission and how they were brought to justice. He said one company was registered just to give investment advise, but engaged in trading for which they did not have a license.
They were caught through the TTSEC’s market intelligence strategies. Another company was caught after the TTSEC noticed a billboard advertisement and decided to investigate, he said. Romany said the company was bringing a particular product to T&T and they were not going through Customs and Excise, or any legitimate postal services. The products were offered to customers at a particular price, but when that customer brought in another person, the share increased.
He said the TTSEC investigated and halted all operations. It turned out that the product was fake.
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