Securities regulations DO apply on the Internet
The power of the Internet has tempted many new ventures to try to sell securities to the public illegally. In Canada, and in many other countries, the general rule is that securities can be distributed to the public only after the regulators have vetted the company's prospectus. The failure of companies, dealers or advisors to comply with regulations should be a red flag that alerts you to a potential investment scam.
Your securities regulator can tell you whether an individual or company is registered to trade or advise in your area and whether the company selling the securities has filed a prospectus. Even then, the securities must be distributed through a registered dealer. You can check a person's registration by contacting your securities regulator.
Some simple precautions can keep you from becoming a victim of Internet investment fraud: