News Release
Updated - Investor Alert: Aggressive stock promotion exploits fears of coronavirus recession
Apr 08, 2020
Vancouver and Calgary – The British Columbia Securities Commission (BCSC) and the Alberta Securities Commission (ASC) are warning the public to exercise extreme caution about aggressive promotion of Crestview Exploration Inc., a B.C. gold mining company.
A mailing sent in early April from a “stock analyst and geologist” to residents of B.C., Alberta, Manitoba and Saskatchewan makes exaggerated claims about Crestview, predicting that its stock price “will soar as the recession hits.” The letter comes in an envelope, without a return address, that says in bold red letters, “CORONAVIRUS AFFECTING MARKETS: READ NOW.”
“The short-term upside potential for investors buying shares of Crestview Exploration today is around 500% while long-term shareholders (12+ months) could see gains exceeding 2,400%,” the letter says.
Crestview, listed on the Canadian Securities Exchange and the Frankfurt Stock Exchange, issued a statement April 8 stating that it was not responsible for the promotion, and said the letter contained “unfounded forward-looking statements.” The company urged investors and potential investors to verify any statements, and the source of such statements, contained in buy recommendations.
UPDATE - MAY 28, 2020: A very similar letter headlined, “A RECESSION IS AROUND THE CORNER,” was sent to Canadian households last week. The letter refers to the “irreparable financial damage” caused by the lockdown, and then goes on to make the same recommendation of Crestview.
The BCSC and the ASC remind investors to exercise caution when considering aggressive promotions as a basis for investment decisions, as these promotions may make false claims of large profits and baseless stock price projections. Most aggressive stock promotions in recent years have been done through unsolicited email or social media, but promotions delivered through the mail carry the same risks.
The BCSC and the ASC encourage anyone who is considering buying or selling an investment to do research or talk to their registered investment advisor to ensure it is an appropriate decision. For information on how to become better informed about investment products and services, please visit InvestRight at www.investright.org or Checkfirst at www.checkfirst.ca.
More information about the BCSC’s response to the COVID-19 crisis is available here.
More information about the ASC’s response to the COVID-19 crisis is available here.
About the British Columbia Securities Commission (www.bcsc.bc.ca)
The British Columbia Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:
- A securities market that is fair and warrants public confidence
- A dynamic and competitive securities industry that provides investment opportunities and access to capital
About the Alberta Securities Commission (www.albertasecurities.com)
The ASC is the regulatory agency responsible for administering the province's securities laws. It is entrusted with fostering a fair and efficient capital market in Alberta and with protecting investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada's capital markets.
Learn how to protect yourself and become a more informed investor at www.investright.org and checkfirst.ca.
For Media Inquiries:
Brian Kladko
British Columbia Securities Commission
mediainquiries@bcsc.bc.ca
Hilary McMeekin
Alberta Securities Commission
403-592-8186
BCSC Public inquiries
604-899-6854 or 1-800-373-6393 (toll free)
inquiries@bcsc.bc.ca
ASC Public Inquiries
Toll Free: 1-877-355-4488
inquiries@asc.ca