Nova Scotia Warns Canadians of Getting Scammed by LeadingPips
The Nova Scotia Securities Commission (NSSC), one of the thirteen provincial financial regulators in Canada, has issued a warning alert for investors, adding the forex firm LeadingPips to its Investment Caution List.
This time, the firm under the spotlight of NSSC offers clients a range of financial services which includes forex, binary options, cryptocurrencies, as well as unrealistic payouts are associated with its affiliate programs, which compensate clients for attracting new traders.
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“LeadingPips website raises a number of red flags characteristic of investment scams. LeadingPip claims its accounts are guaranteed and profits will be quickly realized with no risk. Remember if something seems too good to be true, it probably is. These claims carry the hallmarks of investment fraud,” says Stephanie Atkinson, Acting Director of Enforcement for the Commission.
The chief regulatory body for the Forex market in Canada has recently proposed regulatory framework that provides clarity for derivatives activities, including Forex and CFDs products. Among other things, all highly leveraged products offered to retail clients must be approved in advance by IIROC. Brokers must obtain prior approval for their leveraged products either when releasing new instruments or introducing any changes to the current offerings.
The regulator also said its updated rules would ‘harmonize’ IIROC requirements with product approval requirements introduced in Europe by ESMA, which banned offering binary options and restricted leverage on CFDs.
A dangerous place to shop for investments
Getting back to the warning, the Nova Scotian watchdog said LeadingPips is not registered to trade in or advise on securities or exchange contracts in the province. LeadingPips was also flagged for cold calling Nova Scotia residents offering to establish derivate trading accounts, in a manner that bears the hallmarks of an overseas broker scam, the regulator said.
After briefly explaining certain risks related to derivatives products, the provincial authority noted that online advertising services are a dangerous place to shop for investments and recommends exercising extreme caution when dealing with firms that are not registered in Nova Scotia.
The NSSC is the independent provincial government agency responsible for regulating securities trading in Nova Scotia through the administration of the Securities Act. The regulator website provides information, tools, and resources for investors, including investor warnings about individuals and companies that appear to be engaging in unauthorized activities.
To fulfill its mandate, NSSC also works in close co-operation with the securities regulatory authorities across Canada through the Canadian Securities Administrators (CSA). The CSA is the umbrella organization for the 13 securities regulators of Canada’s provinces and territories that work together to coordinate and harmonize the regulation of Canada’s capital markets.
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