An investment firm is under investigation by the Manitoba Securities Commission, after some investors say they ended up in financial situations they did not understand.

The securities commission is alleging that World Financial Group (WFG) "acted improperly and contrary to the public interest," according to documents obtained by the CBC News' I-Team.

A preliminary hearing recently wrapped up and a panel is currently discussing admissibility of evidence. It is unclear how many investors are involved.

Novice investor Clarissa Parto said she was sold an investment package by World Financial Group.

It wasn't the money that caught Parto's attention: her marriage was failing and she said her husband's cousin, who had recently become a dealer for WFG, promised he could save her relationship.

"They said that this is something that would help your marriage…. This would make you and your husband very happy in the future. You would have a million [dollars] by the time you retire," Parto told CBC News.

Took out $150,000 loan for investment

Parto was sold a leveraged investment. Leveraged investments are any investment you have to get a loan to afford, such as a mortgage.

Parto said she took out a loan for $150,000, the money was invested on her behalf, and she was told the returns on the investment would be enough to pay off the loan.

Investor Clarissa Parto says she signed an investment from World Financial Group in the hopes it could help save her marriage. (CBC)

But Parto said her investments started losing money.

Although leveraged investments are common, the level of risk increases depending on the type of investment, said Philippe Cyrenne, chair of the Economics Department at the University of Winnipeg.

In addition, Cyrenne said, "You always have to make those payments, whereas if you owned it you would just suffer the loss of wealth. So that's what makes it dangerous when you're highly leveraged."

Thinking only about how the investment might help her marriage, Parto said she signed on the dotted line.

"It was miserable. I was in tears. Confused. Desperate. And I wasn't even paying attention," she said.

"I don't think I could comprehend anything, to the point that they needed to point to the place where I needed to sign."

Safeguards in place

There are safeguards in place to protect people from investing in things they do not understand.

WFG establishes and is supposed to abide by certain regulator-approved standards, and the broker fills out a "Know Your Client" form with the client to ensure the investor has the knowledge and resources about the investment.

For example, a client's investment knowledge must be classified as good or excellent. As well, they must have a risk tolerance of "medium" or higher, and the amount of money borrowed should not be more than 40 per cent of the their net worth.

Parto said she "never invested in anything before … well, maybe a little bit of RRSPs, but that was about it."

Parto's "Know Your Client" form indicated that her net worth was $497,000, when in fact, she had a mortgage for nearly that amount, reducing her net worth to almost zero.

Parto said she has spoken to WFG and right now they are preparing a settlement, but she said she has no idea what that settlement might be and has yet to see any details.

WFG has not returned requests from CBC News for an interview.