nb-rick-hancox

Rick Hancox, executive director of the New Brunswick Securities Commission, warns people should be wary of investments that seem too good to be true. (CBC)

The New Brunswick Securities Commission is warning people about so-called boiler room operations, following a complaint by a resident who invested more than $12,000 in purported gold options.

A cease-trade order has also been issued against two companies connected with the case — Crainshaw International Ltd. and Osbourne Worldwide Limited, which have purported offices in Belize.

A boiler room is a type of fraudulent investment scheme where victims are contacted by phone and encouraged to send money to invest.

Victims are often told they can expect large profits on their investment and the callers use high-pressure sales tactics.

"New Brunswickers should contact the commission before sending any money, particularly out of the country, for investments that seem too good to be true," Rick Hancox, the commission's executive director, said in a statement.

Commission staff allege the sales tactics used by representatives of Crainshaw International Ltd. and Osbourne Worldwide Limited to solicit investments indicated a possible boiler room operation.

The companies did not respond to the allegations or attend the commission hearing on Dec. 18.

"The panel found that it was in the public interest to issue the cease-trade order, noting that this may help other New Brunswickers from suffering losses to boiler room activity," the release states.