On August 19, the North American Securities Administrators Association (NASAA) reported on the activities of its COVID-19 Enforcement Task Force (Task Force), which has initiated actions to disrupt 200 schemes intended to profit fraudulently from the pandemic. Modelled on NASAA’s 2018 Operation Cryptosweep, the Task Force includes investigators from 44 jurisdictions in Canada, Mexico and the United States. Canadian Task Force members accounted for more than one quarter of the actions taken to date.

According to the Task Force, many of the fraudulent offerings share characteristics, such as preying on fear while promoting safety amid uncertainty, promising monthly payments to appeal to cash-strapped investors, and/or involving cryptocurrency-related investment products, foreign exchange, and/or other products unfamiliar to inexperienced investors. We think the Task Force’s work may of interest to participants in Canadian capital markets, since it shows how North American securities regulators can act swiftly, in a coordinated way, to address emerging risks.

August 31, 2020