The demographic profile of victims of investment fraud: an update
| DOI | https://doi.org/10.1108/JFC-09-2020-0191 |
| Published date | 09 November 2020 |
| Date | 09 November 2020 |
| Pages | 647-658 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial crime |
| Author | Mark Eshwar Lokanan,Susan Liu |
The demographic profile of
victims of investment
fraud: an update
Mark Eshwar Lokanan and Susan Liu
Faculty of Management, Royal Roads University, Victoria, Canada
Abstract
Purpose –This study aims to examine the demographic factors of investors, contributing to financial
victimizationthat occurs in Canada from June of 2008 to Decemberof 2019.
Design/methodology/approach –In all 235 cases disclosing the details of financial crimevictims are
collectedfrom the Industry Regulatory Organization of Canada (IIROC)enforcement platform between June of
2009 and December of 2019 for the analysis. The study used a descriptive analysis to showcase the
demographiccharacteristics of investors who have beenvictims of financial crimes in Canada.
Findings –The findings indicate that theseinvestors of age 60 and above were more likely to fall prey to
various types of financialcrime. The results also disclosed that retirees and investorswith limited investment
knowledgeincrease the probability of being vulnerable to the perpetratorsthan others.
Research limitations/implications –Overall, the study helpsregulators in the securities industry gain
insights into demographic portraits of the more vulnerable investors. Hence, more precautionary measures
could pitchinto these concerns to protect specific subsets of investorsfrom investment fraud.
Originality/value –Individuals who are more vulnerable to investment fraud might not be entirely
comparable withthe stereotypical victims that most studies portray.The research gap could cause individual
investors who appear to be at lower risk to unconsciously fall prey to investment fraud.The IIROC study,
detailing the demographic factorsof victims, can fill the gap and improve understanding of the tendency of
victims.
Keywords Self-regulation, Exploitation, Victimization, Investment fraud
Paper type Research paper
Introduction
“Easy money: How fraudsters can make millions off Canadian investors, get barely
punished and do it again”(Robertson and Cardoso, 2017); “Canadian securities regulators
my money’: Woman says broker ‘churns’her account, rakes in over $250,000”(Johnson,
2017). These headlines highlight the public perception that ‘light touch regulation’failsdue
to weak securities laws, inadequate penalties, and the regulatory will to enforce securities
laws in Canada (Lokanan,2014a, 2017;McKenna, 2017). Regulators owe it to Canadians to
do a better job of protecting their investments. One such regulator is the Investment
Industry Regulatory Organization of Canada (IIROC). To fully understand the investment
fraud problem that has plagued Canada’s capital markets for decades, it is an opportune
time to study the enforcement performance of IIROC. IIROC is the national self-regulatory
organization (SRO) that is responsible for setting and enforcing rules regarding the
professional conduct of dealer firms and their registered employees that trade in Canada’s
The Social Sciences and Humanities Research Council of Canada.
Profile of
victims of
investment
fraud
647
Journalof Financial Crime
Vol.28 No. 3, 2021
pp. 647-658
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-09-2020-0191
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