The demographic profile of victims of investment fraud

Purpose – The purpose of this study is to examine the demographic characteristics of investors who have been victims of investment fraud in Canada from 1984 to 2008. Design/methodology/approach – Data for this study come from the Investment Dealers Association's tribunal cases that were decided between 1984 and June of 2008. The cases were retrieved from the Securities Regulation Tribunal Decisions database in Quicklaw . Data were collected to examine the demographic profiles of the investors. Findings – The findings indicate that the victims were not particularly rich and a significant proportion borrowed money and opened margin accounts to invest. Those most vulnerable were investors who were retired and had limited investment knowledge. Many also dipped into their savings to fund their future retirement needs. Practical implications – The study is useful for regulators in the securities industry because it paints a demographic portrait of the investors who are more vulnerable to investment fraud. Thus, as part of their investors' education mandate, regulators can tailor their fraud prevention programs to the needs of specific subsets of investors. Originality/value – This is the first study of its kind in Canada that provides a detailed demographic profile of victims of investment fraud. For the first time, data are available to show the occupational classifications, types of accounts and investment objectives of investors who were victims of investment fraud.