Amid rising reports of frauds, scams and misconduct related to the effects of Covid-19, Canadian and U.S. securities regulators have announced a joint enforcement effort.
The North American Securities Administrators Association (NASAA) has formed a task force made up of provincial and state securities regulators to ferret out potential threats to investors due to the pandemic.
“The objective of the task force is to proactively identify Covid-19-related threats to investors […] and to disrupt, discourage and deter those activities,” said Christopher Gerold, president of NASAA.
The group reported that the task force is seeking out websites and social media posts that tout fraudulent offerings, investment scams and unregistered activities.
In particular, the task force will examine a recent spike in internet domain names linked to the pandemic, NASAA said.
“The task force has identified as many as 200,000 coronavirus-related domains,” the group said, noting that most of these were created in the past three months.
“Through the task force, state and provincial securities regulators will be analyzing these domains to identify those offering securities and/or investment advice, and will pursue those that appear to pose a viable threat to investors,” NASAA said in a statement.
The cross-border enforcement effort is being modelled on NASAA’s previous initiative to combat fraud and misconduct in the emerging digital asset sector, known as Operation Cryptosweep.
“Just as state and provincial securities led the way in protecting investors from fraudulent cryptocurrency-based schemes in 2018, we stand ready to protect investors from Covid-19-related schemes during this unprecedented time,” Gerold said.