Private: Copy of Module 16: Avoiding Fraud

Previous Lesson
Next Lesson

16.12 – What to Do If You Suspect an Investment Scam

If you suspect a scam, take important steps before accepting any money into trust, especially money from third-party investors. Accepting money into trust can be a critical turning point, making withdrawal of your services much more complicated.

Ask yourself these questions:

  • If this is such a powerful and unique opportunity, why was I picked as the lawyer for the project?
  • Is this work outside of my practice area?
  • What real legal services am I being asked to perform, and how do they relate to the project?
  • Have I made reasonable inquiries about the client, the subject matter, the objectives of the retainer, and about the client’s source of money for the project? Have I made a record of my inquiries?
  • Do I understand the deal? Does it make sense? Do I need more information, including more supporting documents?
  • How does this investment produce a profit beyond simply generating further investment money?
  • Why can’t I meet the powers behind the financial institution or why does my client control all my communications with the alleged powers?
  • Who are some of the other lawyers that represented this client in the past, and may I contact them? If not, why not?
  • Am I in a position to provide assurances of the nature I am being asked to give?
  • Is this individual on the Saskatchewan Financial Services Commissions Disciplined List or the subject of a current proceeding?
  • Consider whether you need to seek your own counsel before taking further steps or contacting anyone else. 
  • If you have no issue with your own potentially improper involvement, run the scenario by another trusted lawyer or a staff lawyer at the Law Society.
  • If you suspect a scam, withdraw from acting for the client. Again, seek assistance from counsel if necessary, or a staff lawyer at the Law Society, if you have issues with withdrawal and especially so if you have money that has been received from third parties.
  • Consider whether you need to make a report to the Saskatchewan Lawyers Insurance Association (SLIA).