Impersonating a government agency function
The Canadian Securities Administrators (“CSA“), which is an organization of the provincial and territorial securities regulators in Canada, has issued a warning to alert the public about a website purportedly in Vancouver that is fraudulently claiming to function as a securities regulator – in effect, that seems to be committing a fraud against the securities regulators.
The CSA warning indicates that the fake securities regulator is called the Canadian Office of Derivative Trading. Its website has not been taken down by law enforcement yet. It is here. It registered with Godaddy on September 11, 2019. The website is not impersonating any one securities regulator by name but it is impersonating the role and function of a securities governmental agency, which is tantamount to an impersonation of a government agency. For example, it claims to regulate derivatives, stock exchanges, market intermediaries, insider trading and securities legislation.
There is no “Canadian Office of Derivative Trading” (“CODT“) authorized to regulate any securities, let alone derivates. In fact, there is no federal securities regulator in Canada. Securities regulation is provincial jurisdiction in Canada.
Use of coat of arms of British Columbia
The CODT logo contains a blurry coat of arms of the province of British Columbia, perhaps to give it the illusion of being a government agency. It is an offence under the Provincial Symbols and Honours Act, to use the British Columbia coat of arms without consent or to use it or a facsimile of it, to induce the public into believing that an organization has authority from the government or is exercising a function of the government. The Provincial Symbols and Honours Act authorizes the removal by injunction of the illegal use of the provincial coat of arms irrespective of the commencement of proceedings in connection with the offence of misusing it.
Among its purported governmental authority and activities, the CODT purports to:
- regulate the futures market in Vancouver;
- contribute to Vancovouer’s economic reputation;
- warn the public against dealing with bogus entities;
- protect the integrity of the financial services sector; and
- monitor and enforce money laundering activities.
Fake due diligence portal
The CSA believes the fake website was erected to deceive investors into obtaining comfort in respect of some companies that are “listed” on the CODT website as having no regulatory issues in order to induce the public to invest in those companies. Presumably, those CODT listed companies, or one or more of them, may be the creators of the CODT website.
Who are those companies? Well they can be ascertained by entering search terms on the CODT website. For example, entering search terms such as “trust”, “capital” or “company”, yields over 20 companies. However, out of the 20 “capital” companies listed, only the profiles of five of them function to yield an alleged clean slate for each of them.
It is possible that some or most of the entities listed are not part of the fake securities regulator site and may have no knowledge of being included in the website’s search database. For example, CODT claims to licence the financial entity Squirrel, which does not even operate in Canada, and which is regulated as a financial entity in the UK. Squirrel likely has no knowledge that it is listed as being allegedly licensed by CODT.
FIU and other claims
CODT also claims, indirectly to be an FIU and says that it is a member of Egmont.
No doubt the CODT website will be taken down fast, given that there is triple harm occurring – one set of harm to the reputation and integrity of multiple provincial and federal agencies who regulate securities, anti-money laundering law and financial institutions, and the other set of potential harm to the investing public. There is also the reputational harm to companies in the search database that are not affiliated with CODT.
Surge in government agency impersonations
The US Federal Trade Commission here warned against the increase of scammers impersonating government agencies, and since Covid-19, law enforcement agencies all over the US and some in Canada, have reported a large increase in incidents involving the impersonation of law enforcement officers and medical personnel during the pandemic for the commission of numerous crimes. Corona virus fraud schemes are surging all over, on multiple fronts, around the world.