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Mounties charge man in $100M alleged Ponzi scheme

From Toronto Star, the regulator is puzzled as to why people do not do easy due diligence, which would helped avoid this ponzi scheme by Brost.

In 2007, the commission ordered a lifetime market ban and fined Brost $650,000 for "fraud on investors."

The securities panel said Brost was "at the centre of this fraudulent scheme" to lure public investors into putting money into a shell company which the panel said was intended to finance Sorenson's offshore mining ventures.

At the time of its decision, the panel said, "Brost not only does not recognize the seriousness of his misconduct, but is also prepared shamelessly to overlook it."

The alleged scheme should be a warning to other potential investors, Mattson said.

Just doing a few minutes of research into the proposed investment could save you thousands of dollars, he said.

"People take so much more time actually buying a car than they do putting a couple thousand dollars into something like this," Mattson said.

"People should really look at what's available before they make those rash judgements."

If you understand that the regulator's job is not to prevent fraud, but rather, as Erving Goffman understood, was to Cool out the Mark, then this nasty dig at the victims makes perfect sense.

The regulator is blaming the victims for being involved with a "noted" con criminal. Never mind that the ponzi scheme ran from 1999, and it took until 2007 for the regulators to issue their pointless securities ban.

The point of having governmental regulation is to make the victims look bad, stupid or greedy: regulators do nothing to actively prevent fraud.

The regulator's entire job is to a) close down frauds when the complaints are too high, and b) blame the victims for being in the way of a psychopath.  The reason for this is, paradoxically, to maintain trust in systems that can be easily abused con criminals.

I am not blaming regulators for the ineffective ways in preventing fraud.  No doubt they are well meaning, but puzzled about fraud.  Their role is to prevent a single incident of mistrust from unravelling the bullwarks of modern society: the ablility to trust people who are outside your social circle and the weapons of shaming, blaming, and outing.

But consumers, investors, and buyers of franchises, business opportunities, and affiliate marketing schemes have to understand that years of civilization has not eliminated the intra species predator: the con criminal.

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• Mounties charge man in $100M alleged Ponzi scheme (ctv.ca)
• Mounties charge man in $100M alleged Ponzi scheme (thestar.com)
• Senate Hearing on Madoff's Ponzi Scheme (bizop.ca)
• Two Albertans accused of $100 million Ponzi scheme (canada.com)
• New Canadian scandals highlight old scam (cbc.ca)
• More than 3,000 bilked in $100M scheme; locals charged (calgaryherald.com)
• White-collar crime crackdown coming (cbc.ca)
• How Madoff got away with it: SEC report, phone transcript reveal all (dailyfinance.com)
• Justice system, investigators roasted (thestar.com)

Full post as published by Misleading Advertising Law on September 15, 2009 (boomark / email).