How to Avoid Becoming a Victim of Affinity Fraud

Financial fraud can take many forms including Boiler Room scams, Pump and Dump Schemes, Ponzi and Pyramid schemes. Affinity Fraud ranks among the most predominant in operation globally, particularly within a close-knit society or community, and can thrive or even go unreported.

The United States Securities and Exchange Commission defines Affinity Fraud as ‘investment scams that prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are - or pretend to be - members of the group’.

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TTSEC – How We Protect the Investing Public    

Over the course of this article series, the Trinidad and Tobago Securities and Exchange Commission (TTSEC) has sought to educate the market and the public on its role and functions; and to demystify the operations of the local securities market, in order to engender greater levels of trust and confidence among investors. There has been significant focus on the measures utilised by the TTSEC to afford protection to investors, as provided for under the Securities Act, Chapter 83:02 (SA), and emphasis is placed on the important role of the individual, in ensuring his/her own investment interests are safeguarded by exercising due care and attention prior to any investment decision. 

The TTSEC’s core divisions play a major role in the preventative aspects of regulation by providing guidance to market participants, conducting surveillance and investigations, initiating enforcement action for breaches of the securities legislation and through an aggressive investor education and public outreach programme. We will now look at the specific functions associated with preventative regulation.

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The Role of Compliance and Inspections in Enforcing the Securities Law   

The Securities Act, Chapter 83:02 (SA), provides the Trinidad and Tobago Securities and Exchange Commission (TTSEC) with the power to take enforcement action against any registrant for failing to comply with the SA. Where, during the course of a compliance review (or inspection) in accordance with section 89 of the SA, a registrant is found to be in contravention of (or contravening) the relevant legislation, the matter may be referred for enforcement action. Under Section 7 (1) (h) and (j), of the SA, the TTSEC has the power to take “enforcement action against any person for failing to comply with the Act”; and to “formulate, prepare and publish notices, guidelines, bulletins and policies describing the views of the Commission regarding the interpretation, application, or enforcement of this Act”. 

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The Investment Process  

As we continue our focus on competent investment management, this week’s article considers the investment process, that is, the sequence of steps involved in constructing and implementing a portfolio in order to achieve the investor’s goals; whether that be wealth maximisation or income generation. Quite often individual securities are purchased without considering the process behind the investment decision.According to the European Commission, “sustainable finance refers to the

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Sustainable Finance and Regulatory Expectations  

In the wake of the COVID-19 pandemic, governments are discussing how to rebuild their economies. It should be noted that the pandemic has not stopped the climate emergency and it will not prevent the risks from extreme weather events as well as other climate-related shocks that threaten us now and in the future. This article discusses what can be expected from a securities regulator for sustainable finance development.

According to the European Commission, “sustainable finance refers to the

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