Securities Newsletter
November/December 2022
In this issue, we report major updates on two different joint investigations led by our Securities Division in partnership with the US Attorney’s Office for the Western District of North Carolina. In the first, Austin Delano Page and Brandon Alexander Teague were sentenced in federal court on Dec. 6th in a $4 million investment scam. Page and Teague represented their Kings Mountain Company, D&T Investment Group, as a hedge fund that was investing clients’ money in the stock of well-known companies like Apple. In reality, D&T was not a hedge fund. The company held no securities licenses or registrations, and Page and Teague were not licensed to sell securities and had no background related to the sale of securities. In the second case, Gustavo Guzman is facing charges in an alleged $2 million investment fraud scheme following an investigation by the FBI in Charlotte and the Secretary of State’s Securities Division. Guzman, 59, previously of Fullerton, Calif., made his initial appearance in federal court in Charlotte following his extradition from Australia. Guzman is facing wire fraud, securities fraud and transactional money laundering charges. He allegedly executed a scheme to defraud approximately 10 investors of at least $2 million, by falsely representing that he would use the investors’ money to trade in options and other similar investments. Instead of investing the funds as promised, Guzman allegedly stole a substantial portion of the investors’ money and used it to fund his personal lifestyle, including to make large credit card payments and cash withdrawals, and to pay for personal expenditures. We also report that the Secretary of State’s Rural RISE NC Initiative continues to expand across North Carolina to provide a roadmap to an array of free or low-cost resources to help businesses prosper – and now the initiative has a home on the Agency’s website to give business owners around the state an easy way to search for resources available in their county. We include alerts about important steps investors to take regarding their investment accounts if they become victims of identity theft or a data breach. We also report that more than 150 registered investment advisers attended voluntary 3-hour compliance webinars, entitled "Compliance in the Time of COVID, 3rd Edition," offered by the Secretary of State’s Securities Division on December 7th and 9th. Also included are our regular features, News from the Regulators and Enforcement News.
October 2022
In this issue, we report on various educational outreach events that Secretary of State Elaine F. Marshall and her staff participated in, including anti-fraud Scam Jams in Wendell and Roanoke Rapids and a podcast on so-called “finfluencers,” unregulated influencers who promote investing or investment-related activities via social media. We also report on the Business Roundtable Secretary Marshall convened in Kinston as part of her Rural RISE NC initiative. RISE stands for Resources for Innovators, Start-ups, and Entrepreneurs. The project connects new business creators with mentors, business counselors and funding opportunities, both locally and elsewhere. A checklist for new businesses can be found on the Department’s website. We also remind all businesses that may have registered an assumed business name BEFORE December 1, 2017, that they must re-file an assumed name certificate with their county Register of Deeds Office BEFORE December 1, 2022 or risk losing its registered assumed business name and expose the owner to damages associated with the cost of identifying them if litigation is brought against them by another party. Businesses that filed assumed name certificates AFTER December 1, 2017 do NOT have to refile. We provide our usual cybersecurity tips as well as the information from the North American Securities Administrators Association (NASAA) and US Securities and Exchange Commission (SEC).
August/September 2022
In this issue, NC Secretary of State Elaine F. Marshall introduces our latest investor alert about so-called “finfluencers,” or financial influencers who often are paid to promote various investments – including investments related to cryptocurrency - on social media. Later in the newsletter, we also include investor advisories about investments made in the “metaverse,” as well as romance scams. We also report on a small business event Secretary Marshall and some of her staff members participated in that was sponsored by the Harnett County Chamber of Commerce and the Small Business Center at Central Carolina Community College in Lillington, NC. Secretary Marshall highlighted her NC Rural RISE (Resources for Innovators, Start-ups and Entrepreneurs) Initiative as a way her office is helping small businesses succeed. We also include tips from the US Securities and Exchange Commission (SEC) on ways teachers can invest for their retirement. In our Cybersecurity Corner, we provide lots of resources for small businesses to be better prepared to thwart cyberattacks. And we include our regular features, News from the Regulators as well as our Enforcement News.
July 2022
In this issue, we provide a link to Secretary Elaine F. Marshall’s comments made during the World Elder Abuse Awareness Day conference hosted by the NC Department of Health and Human Services about her and her department’s efforts to protect seniors from elder financial abuse. We also provide a link to a program on cryptocurrency-related scams sponsored by AARP North & South Carolina and the US Securities and Exchange Commission’s (SEC) Atlanta District Office. Andy Penry, Director of the NC Department of the Secretary of State’s Securities Division, was one of the panelists on this program. We include important information about a deceptive mailing that people with recent financing statement filings with the Department’s Uniform Commercial Code Section may have received. We include an announcement by the North American Securities Administrators Association (NASAA) regarding two new publications it has released free to the public about the use of a power of attorney in managing one’s financial affairs. We also include information about the landmark remote online notarization bill Governor Cooper signed into law that allows notaries to use internet technologies to identify people and notarize their signatures remotely. This significant legislation means homebuyers will soon be able to close loans and buy houses from the comfort of their couch, marking a major advance in Secretary of State Elaine F. Marshall’s twenty-five year effort to lead the digital transformation of North Carolina’s business environment. We also include a link to “Investomania,” the SEC’s latest public awareness campaign that uses the game show concept to playfully illustrate that investing is not a game and that investors need to do their due diligence when making investment decisions. Finally, we include several items of interest in our Cybersecurity Corner and News from the Regulators sections.
May-June 2022
In this edition we report on two enforcement cases the NC Department of the Secretary of State were involved with. The first involves Delano Page and Brandon Teague, the founders of a supposed Kings Mountain “hedge fund” called D&T Investment Group. The pair pleaded guilty on April 27th to federal charges for orchestrating a $4 million Ponzi scheme that defrauded hundreds of investors, some of whom were at or near retirement age, following a joint investigation by the NC Secretary of State’s Securities Division, the FBI and US Postal Inspection Service. The second case involves Marlin Hershey and Dana Bradley, both of Cornelius, NC. Hershey and Bradley were charged with mail and wire fraud conspiracy, mail fraud, securities fraud, and money laundering conspiracy. They are alleged to have induced dozens of victims to invest millions of dollars in unregistered securities offerings, promoted by the defendants through Performance Holdings and other entities controlled by the defendants and other individuals, including Performance Retire on Rentals, LLC, Distressed Lending Fund, LLC, Moteng Funding, LLC and Southeast Lot Acquisitions, LLC, among others. We also report on the Rural RISE NC (Resources for Innovators, Start-ups, and Entrepreneurs) program, a new initiative announced by Secretary of State Elaine F. Marshall that seeks to connect new businesses with crucial resources for success. We also include news from the US Securities and Exchange Commission, the North American Securities Administrators Association, and the Federal Trade Commission.
March-April 2022
In this edition, we spotlight the conclusion of the criminal case against Russell Joseph Mutter, a former investment adviser who was found guilty of defrauding 12 victims, many of them elderly, out of more than $3.3 million. Mutter was charged with 41 counts of Investment Adviser Fraud, Financial Exploitation of an Older Adult, and Obtaining Property by False Pretenses. The multi-year investigation led by law enforcement agents with the North Carolina Secretary of State’s Securities Division with the assistance of the US Postal Inspection Service ended in February with Forsyth County Superior Court Judge David Hall sentencing Mutter to a minimum of 16 years, 3 months and a maximum of 22 years, 5 months in prison for his role in the scam. Secretary Elaine Marshall provides tips on how to give generously but wisely to help Ukrainian refugees displaced by Russia’s invasion of Ukraine, as well as to be on the lookout for investment scammers who seek to capitalize on rising energy and fuel prices by pitching risky or fake investments in the energy sector. We also include a link to an interview that J.W. Simmons, host of WCLN’s “We Should Know” program, conducted on cryptocurrencies with Shawn Pruett, Secretary of State Special Agent in Charge of Special Investigations and Forensic Services, and John Maron, Director of Investor Protection and Education. We also include a link to the North American Securities Administrators Association’s (NASAA) new webcast series, “NASAA’s Senior Issues and Diminished Capacity Committee Presents.” The inaugural webcast is entitled, “Cognition: Problems and Solutions.” We also provide a link to an informative video about spotting and avoiding romance scams that was produced by the Montana Securities and Insurance Commission. With the Russian invasion of Ukraine, we provide information from various federal agencies that warn about the heightened risk of cyberattacks and what people and businesses should do to prepare themselves. We also include different notices from NASAA, the Securities and Exchange Commission (SEC), and the Financial Industry Regulatory Authority (FINRA) requesting comments on various proposals and rule changes.
January-February 2022
In this edition, we feature a listing of top investor threats for 2022 and information on a coordinated enforcement action taken just this week to stop an alleged fraudulent precious metals scheme that targeted seniors in North Carolina and across the nation. The action focuses on Safeguard Metals, LLC and Jeffrey Santulan (a/k/a Jeffrey Hill) who are alleged to have solicited investors in North Carolina and across the nation by touting precious metals at grossly inflated prices that were not disclosed. We also provide information on testimony offered by a senior FINRA Foundation official before the Senate Special Committee on Aging as part of its examination of trends regarding financial literacy among older adults. We include a link to “Deep Learning: The Future of Market Manipulation Surveillance Program,” the latest episode of FINRA’s “Unscripted” podcast. This episode discusses how FINRA uses artificial intelligence to detect market misconduct. In our “Cybersecurity Corner,” we include information about efforts the SEC is taking to shore up the financial sector’s cybersecurity defenses. In related SEC news, we report on the Commission’s proposed rulemaking to better protect investors and enhance cybersecurity by bringing more Alternative Trading Systems (ATS) that trade Treasuries and other government securities under the regulatory umbrella. We also report that NASAA has named Kristem Hutchens as Director of Policy and Government Affairs. Finally, we include our regular Enforcement News segment.
December 2021
In this edition, Secretary of State Elaine F. Marshall spotlights the 2020-2021 Charitable Solicitation Licensing Division Annual Report, which found that 78.07% of North Carolinians’ donations went directly to the charities we regulate, just shy of last year’s all-time record of 80.53%. We also report that Joshua Matthew Houchins, a Raleigh real estate developer, was sentenced on November 15th to ten years in prison on charges of Wire Fraud and Possession of a Firearm by a Felon. The Secretary of State Securities Division helped investigate the case. We also remind all NC-registered investment advisers that they must ensure their renewal fees are on deposit with the IARD by December 13th. We also announced that the next round of compliance workshops for NC-registered investment advisers will be conducted via WebEx on January 11th and 14th. Additional information will be provided after January 1st. We publish our latest Informed Investor Bulletin, “Bank to the Future: Decentralized Finance (DeFi) Defined.” We include several notices from the US Securities and Exchange Commission (SEC), including a warning about fake communications that trick recipients into believing the messages came from the SEC; and explanation of how stocks are actually traded; amendments to the Holding Foreign Companies Accountable Act; and information about firms using inaccurate information to solicit investors. In our Cybersecurity Corner, we spotlight the 2021 NASAA Fintech and Cybersecurity Symposium which is open to the public. Registration details are included. Finally, we include news about the most recent enforcement cases with which the Securities Division has been involved.
September-October 2021
In this edition, we report that the National Association of Secretaries of State (NASS) reappointed NC Secretary of State Elaine Marshall as Co-Chair of the NASS Securities Committee and as the organization's representative to the Uniform Law Commission (ULC) Advisory Committee. We also report that the NC Conference of District Attorneys has published the first-in-the-nation handbook for state District Attorneys on prosecuting all forms of elder abuse and exploitation. A representative of the Secretary of State Securities Division was among the many collaborators on this project. The Division is grateful to the North American Securities Administrators Association (NASAA) for granting permission to include information from its enforcement manual with regard to conducting financial investigations. We include an investor alert that was jointly issued by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and NASAA recommending that investors choose a “trusted contact” so that their financial firms might contact that individual when there are concerns about activity in the investor’s account or if the firm has been unable to reach the investor after numerous attempts. We include information about an upcoming free, virtual program hosted by the SEC entitled, “Money and Markets: Trends and Risks for Retail Investors.” We also include information about the Financial and Investment Education Program PBS Books offers. October is Cybersecurity Awareness Month, so our Cybersecurity Corner section includes links to resources to help keep individuals and businesses safe. There is also specific cybersecurity information for investment advisory firms. We also include information about the nationwide poster contest the Multi-State Information Sharing & Analysis Center (MS-ISAC) is sponsoring for all K-12 students. In our News from the Regulators section, we include information from FINRA about new rules addressing brokerage firms with histories of misconduct; an investor alert from the SEC about cryptocurrency and digital assets scams; and a report on the findings of a joint study undertaken by FINRA, the Better Business Bureau’s (BBB) Institute for Marketplace Trust and the University of Minnesota examining why some consumers are more vulnerable to scams than others. Finally, we include the latest enforcement actions undertaken by the Securities Division to protect investors.
July-August 2021
In this issue, we focus on cybersecurity and provide many opportunities and resources for individuals and businesses to learn more about ways they can protect themselves, including a Tele-Town Hall featuring NC Secretary of State Elaine F. Marshall and Kathy Stokes, AARP’s Director of Fraud Prevention Programs. Be sure to check out this month’s “Cybersecurity Corner” section for links to helpful resources. We also include a link to a “Focus on Business” interview host Lea Strickland conducted with Secretary Marshall. The interview covered the Department’s ongoing historic increase in business creation filings, which is further illustrated by a report Secretary Marshall released showing that there were 96,000 new businesses created between January-June 2021, an 80% increase over the number created during the same period last year. We also include our latest investor alert explaining how expense ratios are calculated and why they are important for investors to understand. We also include information about investor education programs that the Financial Industry Regulatory Authority (FINRA), the US Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) have launched aimed at protecting both new investors and vulnerable seniors. We also include our regular News from the Regulators and Enforcement News sections.
May 2021
In this issue, Secretary Elaine F. Marshall invites readers to join her and representatives of AARP North Carolina, FINRA and Mecklenburg County for a virtual “Financial Nightcap” on Tuesday, May 25th. Hosted by AARP North Carolina, the focus will be on reinforcing one’s financial foundation as we emerge from the COVID-19 pandemic. The event is free, but registration is required. See the newsletter for details. We also invite Facebook followers of the Secretary of State’s Office to join in the Facebook Live event focusing on retirement readiness for military families that will stream on the Department’s Facebook page on Friday, May 28th at 1 pm. Produced by the Investor Protection Trust and PBS Books, the event will talk about the steps young servicemembers can take now to prepare for their long-term financial security. We also include a link to FINRA’s latest “Unscripted” podcast, this one dealing with how FINRA’s Advertising Regulation Department helps protect investors by helping ensure that broker dealers’ communications with the public – including their websites, social media and print advertising – are fair, balanced and not misleading. We also feature a report on the 2.5-day long virtual annual conference that the NC Partnership to Address Adult Abuse held this month. Among the many engaging sessions was one that spotlighted the Secretary of State’s involvement in a joint effort with the NC Department of Health and Human Services’ Division of Aging and Adult Services on the development of the HelpVul web portal that promotes communication and collaboration between financial institutions, county Adult Protective Services, and the Secretary of State’s Office on suspected cases of financial abuse and exploitation aimed at vulnerable adults. We include links to the recorded session. We also provide information about the SEC’s upcoming 40th Annual Small Business Forum, as well as other information from the regulators. We also include our latest Enforcement News.
March-April 2021
In this edition, we report on the sentencing of Anthony Wayne March of Wake Forest, NC, to 135 months imprisonment for his role in an $8.1 million Ponzi scheme. The NC Department of Secretary of State Securities Division assisted in the investigation and prosecution of March. We also unveil the Top Investor Threats for 2021 as compiled by the North American Securities Administrators Association (NASAA), and include the link to an investor protection presentation hosted by AARP Western North Carolina. We also feature information about the next installment in the “Boomers to Zoomers” Facebook Live series that will take place at 1 pm on April 23. This series is jointly presented by the Investor Protection Trust, PBS Books and Detroit Public Television and is free to all. The Secretary of State’s Office will stream the conversation on its Facebook page, @NCSecState. We also feature new investor alerts about “SPACS” and “ESG Investing.” What do those initials mean? Learn what they are and how to protect yourself from scams. We also include information relating to and new study by the FINRA Investor Education Foundation (FINRA Foundation) and the Center for Economic and Social Research (CESR) which provides new evidence that repeated exposure to concise, online educational interventions can reduce susceptibility to investment fraud among U.S. adults. Finally, we include our regular Calendar of Upcoming Events, News from the Regulators, our Cybersecurity Corner, and our Enforcement News.
January-February 2021
In this edition, we discuss issues investors should consider before succumbing to hype about certain investments they see on social media platforms. We provide an Investor alert from the SEC about this as well as a link to an NPR Planet Money podcast explaining the recent GameStop "short squeeze." We also inform NC attorneys about our free CLE program. We include another SEC investor alert warning people about how the isolation of the elderly during the COVID-19 pandemic has led to an increase in the number of investment scams. We include a link to the NC Secretary of State Securities Division's latest Informed Investor Alert about protecting one's online accounts. We include a notice that AARP North Carolina is conducting a Facebook Live event at 10:00 am on March 1 with Secretary of State Elaine Marshall and Attorney General Josh Stein. They will be discussing fraud prevention. Details are included. In our Cybersecurity Corner, we feature FINRA's 2021 Risk Monitoring and Examination Activities Report, which addresses 18 regulatory areas, including cybersecurity for member firms to be mindful of. Finally, we include our regular News from the Regulators and Enforcement News sections.
November-December 2020
In this issue, we pay tribute to Cape Fear Council of Governments Area Agency on Aging Director Jane Jones who retired last month. Secretary of State Elaine F. Marshall attended the virtual ceremony and presented Jane with the Order of the Long Leaf Pine Award in recognition of Jane's 25 years of dedicated service to the citizens in her region and around the state. Jane’s leadership has been instrumental in protecting seniors across the Cape Fear Region and raising awareness of the dangers of elder financial abuse by hosting anti-fraud events such as "Modern Times, Modern Crimes" Scam Jams. We report that NASAA has voted to adopt a model rule to set parameters by which NASAA members could implement continuing education programs for investment adviser representatives in their jurisdictions. While there is no current requirement that IA Representatives registered in North Carolina get continuing education training, the NC Secretary of State's Securities Division has been offering voluntary "best practices" workshops since 2010 and plans to continue offering these workshops for the foreseeable future. We include an Investor Bulletin from the SEC that explains "fractional share investing." We also warn NC businesses that the Department is aware of some misleading mailings going to businesses soliciting them to use a private company for filings with the NC Secretary of State’s Business Registration Division. We remind all business owners that they can file their annual reports and other required paperwork with our Business Registration Division without paying a private company an additional fee (see https://www.sosnc.gov/divisions/business_registration/annual_report). In our Cybersecurity Corner, we provide information from FINRA warning member firms of an ongoing phishing campaign that involves fraudulent emails that include the domain “@invest-finra.org”. FINRA recommends that anyone who clicked on any link or image in the email immediately notify the appropriate individuals in their firm of the incident. We also include a link to FINRA's podcast on the use of artificial intelligence in the securities industry. We also feature our usual News from the Regulators and Enforcement News sections.
September-October 2020
In this issue, we highlight the Department's role as one of the content presenters for the virtual 2020 Caregivers Conference, the annual conference organized by Transitions Guiding Lights. We provide information about changes a new temporary law passed by the NC General Assembly has made to the notary’s role in the absentee ballot process for this fall’s election. We provide the findings of NASAA's annual Enforcement Report, and warn investors about scams that often follow natural disasters. In our "Cybersecurity Corner," we include a warning for securities firms (and others) to be on the lookout for a new type of cyber-attacks known as "credential stuffing." We also inform consumers that United Way of North Carolina and the Cybercrime Support Network has teamed up to launch North Carolina's first cybercrime support and recovery hotline. Now North Carolina consumers and businesses can simply dial 2-1-1 if they suspect they have been a victim of cybercrime. And we have our regular News from the Regulators and Enforcement News segments.
August 2020
In this edition, we announce that the Secretary of State’s Office has a process for requesting an appointment for in-person service. We include information about the 2020 Census and urge all who have not yet submitted to their census forms to do so before the September 30th deadline. Having an accurate count ensures that North Carolina receives its fair share of the federal tax dollars its residents send to Washington every year. We feature two criminal enforcement cases with which the Securities Division helped bring to positive conclusion. We include information for state-registered investment advisers about our upcoming series of WebEx “best practices” presentations. And we include timely alerts, tips and other news and information from some of our other partner agencies, including the US Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the North American Securities Administrators Association (NASAA).
July 2020
In this edition, Secretary Marshall reminds readers how important it is to the State’s economy that they complete their 2020 census forms. She also talks about her participation in a tele-town hall on June 15th to mark World Elder Abuse Awareness Day (WEAAD). The tele-town hall was hosted by AARP North Carolina and focused on preventing financial fraud in North Carolina. The conversation was recorded and a link is included to the recording. We also note that Secretary Marshall is the 2020 recipient of the NC Bar Association’s Chief Justice I. Beverly Lake Jr. Public Service Award. The award honors an exceptional lawyer practicing in North Carolina who has contributed to the community with exemplary public service. We also report that the rules governing how small businesses wishing to raise up to $25K through the Local Public Offering provision of the NC PACES Act (crowdfunding) may operate have been temporarily extended effective July 1, 2020. This extension will allow the Secretary of State’s Office the ability to pursue permanent rulemaking to extend this provision for at least another five years. We also include a link to FINRA’s latest Unscripted podcast which focuses on how FINRA is working to protect senior investors from fraud. We also include an alert urging investors to be wary of fraudsters targeting their retirement accounts as the result of federal legislation permitting early withdrawals due to the COVID-19 pandemic. In enforcement news, we spotlight the case involving Joseph Maurice Deberry of Charlotte, NC, and his recent guilty plea in connection with his role in a fraudulent investment scheme targeting more than a dozen investors. We also include our regular Cybersecurity Corner, News from the Regulators and Enforcement News features.
June 2020
In this edition, we report that Secretary of State Elaine F. Marshall will be participating in a special Tele-Town Hall marking World Elder Abuse Awareness Day (WEAAD) 2020 on June 15th. The live event is hosted by AARP North Carolina and will focus on investment fraud, fake charity scams and the danger of rogue online pharmacies. We include several different warnings and advisories about scams related to the COVID-19 pandemic and the associated turmoil it has caused the global marketplace. We update an alert we first issued in 2013 about private placement offerings. Our “Cybersecurity Corner” features an article about some of the security concerns related to teleworking and the consequences this may have on the cybersecurity insurance policies some businesses carry. We also feature our regular “News from the Regulators,” ‘Calendar of Upcoming Events,” and “Enforcement News” segments.
April/May 2020
In this month’s issue you can listen in to a recent interview with Secretary Marshall, where she shared some timely advice to steer clear of financial fraud related to COVID-19, as well as a FINRA podcast looking back on five years of investor protection through the Helpline for Seniors. Our Cybersecurity Corner this month features a great write-up walking you through what you need to know to keep your data safe when it’s time to say goodbye to your old computer. We have information on an upcoming public hearing regarding the proposed extension of rules related to the Local Public Offering (LPO) option of the state crowdfunding law (NC PACES). Be sure to check out the news on NASAA’s recently-released Annual Report on State-Registered Investment Advisers, as well as our write-up on a great new nonprofit partnered with state government to get deliveries to seniors and others at heightened risk from COVID-19. And as always, please be sure to check out our regular features, News from the Regulators, Enforcement News and our Calendar of Upcoming Events.
March 2020
In this issue, Secretary Elaine F. Marshall explains how her office is operating during the State of Emergency period caused by the Covid-19 pandemic. Earlier this month, Secretary Marshall joined NC Department of Revenue Secretary Ronald G. Penny for a Tele-Town Hall sponsored by AARP North Carolina. See the video of Secretary Marshall talking about the different kinds of scams that her Department investigates. She also warns investors to watch out for Covid-19-related scams and provides tips about how to spot potential scams. We also provide information about an upcoming webinar offered by the National Cyber Security Alliance about how to be safe while teleworking during the Covid-19 crisis. In our Cybersecurity Corner, we discuss ransomware and how to avoid being a victim of these malicious attacks. We include our regular features, News From the Regulators, Enforcement News and our Calendar of Upcoming Events.
February 2020
In this edition of the Securities Division newsletter, Secretary of State Elaine F. Marshall invites readers to join an important tele-town hall being hosted this Friday by AARP North Carolina in which Secretary Marshall and NC Department of Revenue Secretary Ron Penny will answer questions and offer some helpful tips to avoid tax season scams. Secretary of State Securities officials conducted an informative Continuing Legal Education (CLE) seminar last week updating attorneys on our work regarding investor education, securities enforcement, and capital formation. Please note items on two recent investment scams making their way through federal court. Our Investment Advisor community may be interested in submitting comments to NASAA regarding a proposal to create a continuing education program for IA representatives. The public comment period on that proposal closes on March 30. Our recurring Cybersecurity Corner shines a spotlight on the Business Email Compromise scam that recently cost Shark Tank Judge Barbara Corcoran nearly $400,000. If it can happen to a Shark Tank Judge, it can happen to anyone! We also include our regular News from the Regulators and Enforcement News features.
January 2020
In this edition of the Securities Division newsletter, Secretary of State Elaine F. Marshall greets readers with a video message in which she offers tips on how to be a safe investor. Representatives of the Secretary of State’s Office recently participated in the NC Department of Military and Veterans Affairs’ first Military Spouse and Family Expo that was conducted at Ft. Bragg on January 30th. As we begin the new year, the Securities Division provides a list of the Top Investor Threats for 2020. Many of the threats are familiar, including Ponzi schemes, fraudulent promissory notes and real estate investments. We also provide an update on the Department’s participation in a federally-funded project to pilot a new platform for brokerage firms and banks to report suspected cases of financial fraud and exploitation against vulnerable adults. We also warn NC business owners about a scheme designed to mislead them into paying a Michigan-based company $90 extra to file an annual report the business can file quickly and easily itself though the Secretary of State’s website without the added cost. In our recurring Cybersecurity Corner, we spotlight the release of the Attorney General’s 2019 annual report on data breaches. We also include our regular News from the Regulators and Enforcement News features.
December 2019
In this edition, we report on the launch of our revamped Securities Division Newsletter. We also report on an exciting new pilot project that will help combat elder financial abuse and exploitation. North Carolina is one of a small handful of states that’s been chosen to pilot this voluntary reporting platform. Development of the platform was funded by a U.S. Department of Justice grant to enhance collaboration between financial firms and enforcement agencies, including the NC Secretary of State’s Securities Division. The platform is designed to automatically route reports from broker/dealer firms to the Secretary of State’s Office and/or Adult Protective Services for appropriate review and processing. The platform will allow representatives of each agency to communicate about and/or coordinate on cases as appropriate. We also report that Wake Forest Investment Adviser Anthony Wayne March was indicted in federal court in late November following an investigation by the NC Secretary of State’s Securities Division and the IRS Criminal Investigation Division into an $8.1 million alleged Ponzi scheme. We also report that the NC Secretary of State’s Securities Division has launched a Cybersecurity Outreach Initiative for investment adviser, or IA, firms. The initiative is designed to help North Carolina’s registered investment advisers become more cybersecure by thinking more critically about their cyber policies and procedures. The growing trend of cyberattacks is putting investment advisers, their business records and clients' funds at risk. We also include our regular features, "News from the Regulators," "Enforcement News," and our "Calendar of Upcoming Events."
September-December 2018
In this issue we feature the latest installment in the “Get in the Know” video series that raises awareness about the risks of cryptocurrency-related investment products. With the recent spate of hurricanes, we provide warnings about hurricane-related investment and charity scams. We introduce the newest member of our Investor Education team, Ms. Ann Elmore, and we provide recaps of our activities involving the NC State Fair and our most recent round of “best practices” workshops for state-registered investment advisers. Speaking of which, we remind our registered advisers that the deadline to fund their renewal accounts is December 17, 2018. We also feature a podcast produced by the FINRA Foundation entited, “Millennials and Money: How to Get Started on the Road to Investing”. We include the latest installment in our “Informed Investor” series of alerts. This one explains how promissory notes are used in investing. With the holidays coming, we provide tips on how to stay cybersecure for on-the-go travelers. We republish an alert warning investors not to be fooled by false claims that federal or state regulators have endorsed the investment. Other alerts deal with variable annuities and variable life insurance. Finally, we have our usual features including our Calendar of Upcoming Events, Latest Enforcement Actions, On the Docket and News from the Regulators.
May-August 2018 Newsletter
In this edition, we report on the keynote address Secretary Elaine F. Marshall gave at the Annual Conference of the North Carolina Partnership to Address Adult Abuse (NCP3A) in May. We include links to her videotaped remarks as well as to her breakout session on investment fraud. We also report on two recent enforcement cases. One involves Russell Joseph Mutter of Clemmons, NC. Mutter was arrested and charged with four felony counts each of investment adviser fraud, obtaining property by false pretenses, and financial exploitation of an older adult. He is currently in custody in the Forsyth County Detention Center on a $5 million secured bond. The other case involves John Jerome Palczuk and his wife Karen Elizabeth Palczuk, both of Raleigh. They pled guilty to selling unregistered securities and were given a sentence of 6-17 months in prison, which was suspended for 12 months of probation. We also report that two companies have become the first in North Carolina to qualify to offer their securities under two different provisions of the state’s crowdfunding law known as the NC PACES Act. We include several investor alerts and bulletins from the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Topics include how victims may recover their money, what investors need to know about Initial Coin Offerings (ICOs), the details of FINRA’s new “trusted contacts” rule, and how to tell if your broker is trying to sell you securities that have not been authorized by his or her firm (also known as “selling away”). We include news from the North American Securities Administrators Association (NASAA) and the cybersecurity roundtable they will be holding in October, as well as information about the crackdown on cryptocurrencies that member jurisdictions like North Carolina participated in. We include an open invitation to all NC-registered investment advisers and their representatives to attend an upcoming “Best Practices” workshop. Finally, we include our regular features: Calendar of Upcoming Events, On The Docket, and News from the Regulators.
March-April 2018 Newsletter
In this edition, we update readers by informing them that our Cease and Desist Order against Power Mining Pool became permanent on April 19. Power Mining Pool represented that it was a cryptocurrency mining operation and that investors could share in the profits generated by the company's mining activities. During its investigation, the NC Secretary of State's Office found no evidence that such mining was taking place. We include investor alerts on Initial Coin Offerings (ICOs), "unicorns," investment clubs, SEC impersonators, ETFs vs. mutual funds, and Ponzi schemes targeting the elderly. We report on some of the outreach activities we have conducted over the past couple of months and provide information about upcoming events you will not want to miss. We have updated information about other enforcement cases and we provide other important information from some of the other securities regulators.
January-February 2018 Newsletter
In this edition, we delve into the emerging issue of cryptocurrencies and the potential risks they pose for investors. For instance, the NC Department of the Secretary of State issued a temporary cease and desist order against investment programs operated by BitConnect. Follow our link to read more about our Order. We also include various investor alerts about investments relating to cryptocurrencies. We also announce that the Department’s website, www.sosnc.gov, has a new look as of our major update in December. We include an investor bulletin explaining investment adviser sponsored wrap fee programs and what investors need to know about them. We also include a couple of different resources for finding and working with an investment professional, including the “Interview an Advisor” program jointly sponsored by AARP and the North American Securities Administrators Association (NASAA). Our updated Calendar of Upcoming Events is growing, so check it out to see if a departmental representative will be conducting an educational program near you.
August - September 2017 Newsletter
In this issue, we report on the sentencing in federal court of Robert Louis Winecoff of Huntersville, NC, to 51 months in prison for his role in a fraudulent investment scheme in which he scammed 12 investors out of approximately $343,000. We also ask readers to take an online survey about our newsletter in an effort to improve it. We announce big improvements in the way the Department provides information and services to its customers. We report that Secretary Elaine Marshall was the recipient of the Charlotte Business Journal's 2017 Lifetime Achievement Award for her work on international trade, and that John Curry, the Securities Division's Special Agent in Charge, received his Advanced Law Enforcement Certificate. We include important information for consumers affected by the Equifax data breach. We include alerts from the US Securities and Exchange Commission (SEC) about scams in the wake of the recent hurricanes that have hit the US and Puerto Rico, what the new "T+2" settlement cycle means for investors, and how investors can avoid scams involving companies making "Initial Coin Offerings". We also include a list of resources prepared by the Financial Industry Regulatory Authority (FINRA) designed to help older adults steer clear of investment fraud. Finally we include our regular features: the Calendar of Upcoming Events, our Recent Enforcement Actions, cases that are On the Docket and News from the Regulators.
July 2017 Newsletter
We begin this month’s newsletter with the SEC’s warning issued on July 25 that digital coins and tokens are subject to federal securities laws. We have also reprinted the SEC’s useful Investor Bulletin on the potential risks of Initial Coin Offerings (ICOs). Also please check out the first of the CFTC’s new video series, “True Fraud Stories.” Federal employees and retirees participating in the Thrift Savings Plan (TSP) are encouraged to check out the SEC’s Investor Alert, included on page 9, for handy tips to avoid investment scam artists who may pretend to be affiliated with a government agency to gain access to your retirement fund. We’re also reprinting the SEC’s Investor Bulletin providing helpful information about the basics of retirement investing through 403(b) and 457(b) plans. And as always we hope you'll check out our calendar of upcoming educational events - we may be in your neighborhood soon! - as well as our On the Docket, Enforcement Actions, and News From the Regulators sections.
May-June 2017 Newsletter
The May/June SOSNC Securities Newsletter begins with a writeup from Triangle Family Service's May 18th Scam Jam in Wake Forest. In observance of World Elder Abuse Awareness Day we're including a NASAA study that takes a close look at financial fraud and exploitation targeting seniors, and how broker-dealer procedures can help protect senior clients. If you're considering investing in a crowdfunding venture, please check out the SEC Investor Bulletin focusing on what you need to know about so-called SAFEs (Simple Agreement for Future Equity" ). We hope you'll check out some interesting new stats released by the Consumer Financial Protection Bureau on financial literacy among American teens. We're also including a writeup from NASAA on last week's Cybersecurity Roundtable in Washington, D.C. As people here in North Carolina and all along the Atlantic Seaboard brace for Hurricane season, we have some timely advice from FINRA about avoiding scams in the wake of hurricanes and other natural disasters. Also check out news from NASAA about additional securities firms that have agreed to provide a fee disclosure schedule for clients based on a NASAA model. We're also including news from the Commodity Futures Trading Commission's approval of amendments to its Whistleblower Rules that will strengthen the agency's anti-retaliation protections for whistleblowers. And please check out our calendar of community workshops - we may be in your town soon! - as well as our "News From the Regulators" section.
April 2017 Newsletter
This month's newsletter begins with the sentencing of former Raleigh resident Ronald McCullough in a $2 million foreign currency trading scheme. We're also including news from the SEC regarding recent amendments to the federal JOBS Act. Also check out the link that we have included to a writeup in the Raleigh News & Observer on the Limited Public Offering option under North Carolina's new crowdfunding law. We also bring you news this month from the Department of Justice on its actions to dismantle the Kelihos Botnet. If you frequently read articles on investment research websites, you'll want to check out an informative alert from the SEC that we're reprinting in this edition that urges caution in following stock recommendations from those sites. And we're including a handy recovery checklist from FINRA for victims of Investment fraud. And we hope you'll check out our Calendar of Upcoming Events and News from the Regulators.
March 2017 Newsletter
In this issue, we report on the federal criminal indictment of Alan Peter Darcy, 78, of Murphy, NC, with wire fraud and for orchestrating an $800,000 investment fraud scheme that induced multiple victims into investing in a variety of bogus financial instruments and products., such as fraudulent "cash flow contracts," "Joint Participation Agreements," and leased "Bank Guarantees." We also report that the Secretary of State's Securities Division is now accepting filings under the State's new crowdfunding law, known as the NC Providing Access to Capital for Entrepreneurs and Small Business (PACES) Act. We have established a special page on our website that includes links to the statute, rules, forms and FAQs. Investors and businesses are strongly encouraged to read and bookmark and visit our crowdfunding webpage often as it will be updated as needed. We also report on Secretary Elaine F. Marshall's address to the NC Association on Aging conference that was held earlier this month in Winston-Salem. We include a news release from the North American Securities Administrators Association (NASAA) which outlines NASAA's 2017 legislative priorities. We include a link to a new video that the British Columbia Securities Commission has produced that cleverly educates people about investment fraud. It is very entertaining and highly commended. We include investor bulletins from the US Securities and Exchange Commssion (SEC) about robo-advisers and their website, Investor.gov, as well as the Financial Industry Regulatory Authority (FINRA) about binary options follow-up schemes. We also include a notice from FINRA indicating that they are now accepting applications for their highly successful Military Spouse Fellowship program. We spotlight three fellows from North Carolina. Finally, we include a jam-packed calendar of upcoming investor education events as well as our usual features, On The Docket, Recent Enforcement Actions, and News from the Regulators.
February 2017 Newsletter
In this issue we report on the sentencing of former ZeekRewards CEO Paul Burks to more than 14 years in federal prison for his role in operating a $900 million Ponzi scheme. In addition, Burks, from Lexington, NC, was ordered to pay $244 million as restitution. We also report on the public hearing the Securities Division convened this month on the proposed rules for the state crowdfunding law, known formally as the NC Providing Access to Capital for Entrepreneurs and Small Business (NC PACES) Act. We also share the results of an AARP investment fraud vulnerability study that sought to identify key differences between known investment fraud victims and the general investor population in three discrete areas: psychological mindset, behavioral characteristics and demographic characteristics. We share news that the US Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) have signed an information-sharing agreement for crowdfunding and other types of offerings. The NC Department of the Secretary of State is a NASAA member jurisdiction. As we look to the start of America Saves Week, we include an Investor Bulletin designed to help members of our Armed Services make informed savings and investing decisions and avoid common scams. The article includes links to lots of free, unbiased information. We also include an Investor Bulletin explaining what alternative mutual funds are and how they differ from traditional mutual funds. Finally, we include our usual features: Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators.
December 2016-January 2017 Newsletter
In this issue, we report on the sentencing of Charles Caleb Fackrell to more than five years in federal prison after pleading guilty to one count of securities fraud. He was also ordered to repay nearly $820,000 to his victims. We also encourage readers to view our YouTube channel where we have posted several informative how-to videos, including ones detailing the qualifications to be a notary, the process to become a notary, how to complete an application to become a North Carolina Notary Public, and how to file corporate annual reports. With tax filing season just around the corner, we include information about the Tax Identity Theft Awareness Week (Jan 30 – Feb 3) activities that the Federal Trade Commission (FTC) has planned. We also include a link to a podcast about crowdfunding that you won’t want to miss. We include news about Richard Wyatt Davis, Jr., a Mecklenburg County man who is facing federal charges in connection with an investment scheme that defrauded 100 victims of $19 million. We include informational bulletins from the Securities and Exchange Commission (SEC) dealing with the top investment tips for 2017 as well as how to tell if your broker is conducting excessive trading in your account merely for the purpose of generating sales commissions for him- or herself. We also include a summary report of an in-depth analysis of US investors conducted by the Financial Industry Regulatory Authority (FINRA). We also include our regular Calendar of Upcoming Events, On The Docket, and News from the Regulators features.
October-November 2016 Newsletter
This month's newsletter includes news from NASAA’s annual report, giving some great insight into enforcement from state securities regulators. We are also sharing several helpful investor bulletins and reports, covering how fees and expenses affect your investment portfolio, what you should know about binary options, the danger of precious metals fraud and the risk of “recovery” scams. We also have news from the Consumer Financial Protection Bureau, which is asking to hear from you if you use online financial services that require giving companies access to your digital financial data for investment management or other financial services. And as always we hope you'll check out our calendar of upcoming educational events - we may be in your neighborhood soon! - as well as our On the Docket, Enforcement Actions, and News From the Regulators sections.
August-September 2016 Newsletter
This month's newsletter begins with news of national recognition that our SOSNC Securities Agents have garnered for their work on the $75 million investment and mortgage fraud scheme known as “Operation Wax House.” We’re also bringing you news from a recent informative consumer protection seminar in Charlotte where Secretary Marshall offered valuable tips for avoiding investment scams. Also please check out a timely alert from the SEC to help avoid fraud related to the recent flooding in Louisiana. We’ve also included informative alerts regarding what you need to know about asset recovery companies, and tips to avoid being burned by a boiler room scam. Our readers who may be considering investments through the EB-5 program should check out our new Informed Investor Alert for tips to protect yourself. This edition also includes an SEC Bulletin on variable annuities and buyout offers. And check out our regular features: the Calendar of Upcoming Events, On the Docket, Recent Enforcement Actions, and News from the Regulators.
July 2016 Newsletter
This month's newsletter begins with coverage of North Carolina's new crowdfunding bill, which was just signed into law last week. We also have an update on the Ronald Earl McCullough Forex scheme case. Also please note news from the US Attorney's Office about a major conviction in the ZeekRewards Ponzi scheme, as well as the conviction of a Macon County man in a Forex scheme. We also have a write-up on a great educational summit held in Asheville recently with the goal of helping financial professionals head-off elder abuse. We hope our IA readers will check out an informative piece from the SEC regarding a new proposed rule to require Investment advisers to adopt and implement business continuity and transition plans. We've also included a timely investor alert from FINRA on "Brexit" and market risk. And check out our regular features: the Calendar of Upcoming Events, On the Docket, and News from the Regulators.
June 2016 Newsletter
We begin this month’s newsletter with an update on Ronald Earl McCullough, who remains at large in an alleged Ponzi scheme perpetrated in North Carolina between 2009 and 2012. The FBI is now offering a $5,000 reward for information that leads to McCullough’s arrest. June 15 marked World Elder Abuse Awareness Day. This month’s edition includes Secretary of State Elaine F. Marshall’s appeal to citizens to join the fight against elder financial abuse. Also included is news of a Connecticut case where a man’s accused of using online dating sites in an investment fraud scheme. We also include a summary of a series of helpful investor bulletins from the SEC on what you need to know when reading through a mutual fund prospectus. And of course please check out our regular features: the Calendar of Upcoming Events, On the Docket, and News from the Regulators.
May 2016 Newsletter
Federal crowdfunding regulations, which went into effect across the nation this month, headline the May edition of the NC Securities Newsletter. Federal crowdfunding rules – and the possibility of state crowdfunding legislation – were the subject of a couple of interesting CLEs in Wake County this month. We have a write-up on the major points covered in those seminars. We’re also including an expansive alert from FINRA covering what investors need to know as they consider equity crowdfunding. We hope you’ll also check out the model rule from NASAA to provide more guidance for crowdfunding issuers. That proposed rule is now open for public comment. But not all the news is about crowdfunding this month! We hope you'll check out the news from a community workshop that brought state and local officials - including Secretary of State Elaine Marshall - to Columbus County this week to talk to seniors about how to avoid the perils of financial crime. We also republish FINRA's Cybersecurity Checklist as a courtesy to state-registered investment advisers who, as fiduciaries, have a duty to safeguard their clients' personal financial information. Also note two informative bulletins from the SEC covering what you need to know about stop-loss orders and stop-limit orders, as well as master limited partnerships. And of course please check out our regular features: the Calendar of Upcoming Events, On the Docket, and News from the Regulators.
April 2016 Newsletter
This month's newsletter begins with news of a major conviction in a $1.4 million Ponzi scheme in Yadkin County. We report on our very successful First Annual NC Investor Day, as well as our hosting of the quarterly meeting of the Business Resource Alliance, our participation in the "Modern Times, Modern Crimes" anti-fraud workshop in Wilmington, and our participation in a day-long workshop on investigating investment fraud designed specifically for law enforcement officers that was jointly sponsored by the FINRA Investor Education Foundation and the National White Collar Crimes Center (NW3C). We include information about - and a link to - a new report from FINRA on digital investment advice (also known as "robo investing") which all investors are encouraged to read. We've also included a couple of important bulletins from the SEC on the topics of performance claims and fraudulent stock promotions. Also included is an important NASAA Investor Alert regarding pension advance scams. We're also including a link to some timely recommended reading - a recent New York Times story shines a spotlight on the issue of disclosures against stockbrokers. A recent academic paper found some stats that may surprise you. And as always we hope you'll check out our calendar of upcoming educational events - we may be in your neighborhood soon! - as well as our On the Docket, Enforcement Actions, and News From the Regulators sections.
March 2016 Newsletter
In this issue we encourage investors and entrepreneurs and small businesses alike to register for our 2016 North Carolina Investor Day day-long conference that will be held on April 19 at the NC Biotechnology Center in Research Triangle Park, NC. We also report on the successful financial workshop that was conducted for about 100 Camp Lejeune Marines and their families on March 18. This was the second of a planned series of educational events the NC Department of the Secretary of State Securities Division is conducting in partnership with the USO of North Carolina. In a related article, we include information on the FINRA Investor Education Foundation's Military Spouse Fellowship Program that is taking applications through April 22 for its education and training program needed to earn the Accredited Financial Counselor® (AFC®) designation. We include a reprint of an article from the Consumer Financial Protection Bureau (CFPB) about how to work with financial institutions to help prevent the financial abuse and exploitation of older Americans. We also include investor alerts about scams relating to the Zika crisis and to government impersonators. We also remind people to update their bookmarks to the NC Department of the Secretary of State's website because we have officially changed our domain name from "sosnc.com" to "sosnc.gov". Likewise, all departmental email addresses will change from ".com" to ".gov". We also want people to follow, share, and like our Facebook, Twitter, LinkedIn and Youtube social media sites. Finally, we include our regular features, the Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators.
February 2016 Newsletter
In this issue, Secretary of State Elaine F. Marshall highlights the seven “Sweetheart Swindles” of 2016. We also include information about Barry Carlton Taylor, 64, of Franklin, North Carolina, who recently pleaded guilty to fraud by commodities pool operator and concealment of money laundering charges. According to the criminal bill of information, Taylor defrauded his investors of approximately $2.5 million. In recognition of “Military Saves Week”, we include fraud prevention tips for military retirees. We remind people to follow us on Facebook, Twitter, Youtube and LinkedIn. We also announce that public comments are now being accepted for initial classification of proposed new administrative rules for the NC Secretary of State’s Securities Division (18 NCAC 06). Comments from the public will be accepted through Monday, April 25, 2016. The public comment period is also open for Notary Public and E-Notary rules (18 NCAC 07) until April 15, 2016, and for E-Commerce rules (18 NCAC 10) until April 20, 2016. We include an in-depth investor bulletin published by the Securities and Exchange Commission (SEC) explaining the new rules about investment crowdfunding. We also announce two upcoming conferences. The first is the 13th Annual Caregiver Education Conference at Barton College in Wilson on March 8, and the second is the 2016 North Carolina Investor Day in Durham (RTP) on April 19th. Registration information is included in this newsletter. Finally, we include our regular features, the Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators.
January 2016 Newsletter
In this issue, we report on the sentencing in federal court of David Christopher Mayhew, of Raleigh, to 320 months imprisonment, followed by 3 years of supervised release for his role in a $2 million investment fraud case. Mayhew was also ordered to repay his victims. We also report on the Continuing Legal Education (CLE) seminar on crowdfunding that Secretary of State Elaine F. Marshall and Leo John, Investor and Business Outreach Legal Specialist, co-presented to the Orange County Bar Association. The Department of the Secretary of State will be conducting several free CLEs this year, so please periodically check our Calendar of Upcoming Events (http://www.secretary.state.nc.us/sec/Calendar.aspx). We include the Securities and Exchange Commission's (SEC) Investor Bulletin on the ten investor tips for 2016 and a joint SEC-FINRA alert on securities-backed lines of credit. We report that the registration renewal compliance rate for investment advisers was the best we've seen in the past five years. Only two investment advisers failed to renew their registrations for 2016 by the December 31, 2015. The Securities Division has made outreach and education a particular priority in recent years. We also report that the North American Securities Administrators Association (NASAA) has launched a new website, www.ServeOurSeniors.org, that is designed to provide senior-focused resources in investors, caregivers, industry and policymakers. We encourage everyone to bookmark it. We also recommend a recent Wall Street Journal article entitled, "The Ethical Challenges Facing Entrepreneurs". It expounds on the ethical risks entrepreneurs face at every stage of a company's life. We also include a list of the SEC's examination priorities for the coming year. Although specifically directed to industry professionals, it should give investors an idea of some of the questions they should be asking their brokers. We conclude with our regular features, including the Calendar of Upcoming Events, On the Docket, Recent Enforcement Actions and News from the Regulators.
December 2015 Newsletter
In this issue, NC Secretary of State Elaine F. Marshall announces the release of an investor alert cautioning fraud victims about third-party asset recovery firms. We also report on the sentencing of Michael Francis Egan, formerly of Charlotte, to 24 months in prison on securities fraud and wire fraud conspiracy charges. We remind people to follow the Department on various social media platforms, and we include a link to an excellent article about the soaring popularity of fixed-indexed annuities and the importance of paying strict attention to the details of annuity contracts. With the holidays fast-approaching, we also remind citizens that this is also the time of year that scammers are especially active. We also issue one last reminder to investment advisers and their representatives that December 18th is the deadline for receipt of Preliminary Renewal Statements. We also include investor bulletins on exchange-traded notes (ETNs) and variable annuities. Finally, we include our regular monthly features: the Calendar of Upcoming Events, On the Docket, Recent Enforcement Actions and News from the Regulators.
November 2015 Newsletter
In this issue, we report on Secretary Elaine F. Marshall’s recent address to an entrepreneurial effort sponsored by the Morrisville Innovation Foundation. The Foundation’s HOTTovation program is designed to give entrepreneurs with a good idea the business expertise they need to ‘percolate’ their ideas into fully formed strategic plans to help their start-ups grow and thrive in the real world. We also provide the latest information about the Securities and Exchange Commission’s adoption of rules permitting companies to offer and sell securities through crowdfunding. Also, as part of her activities during the week of Veterans Day, Secretary Marshall spoke to attendees of a specially designed program sponsored by the Better Business Bureau of Southern Piedmont to educate veterans and members of the military about frauds aimed at them. We also report on the indictment of a Michigan man who has been charged by the U.S. Attorney for the Western District of North Carolina with wire fraud conspiracy for operating a $6.8 million Internet Ponzi scheme, as well as the sentencing of Daniel H. Williford of Fleetwood, NC, and Chuckie Beaver of Ellenboro, for their roles in separate securities fraud schemes. We also feature the latest installment in the “Informed Investor” series of alerts. The latest alert, entitled, “The Next Big Thing,” warns investors to be careful when considering investing in three products recently making news: marijuana-related investments, binary options and digital currency. We also provide a reflection on the success of the 2015 NC State Fair and the fact that the Department handed out over 47,000 brochures and other materials to fair-goers. We also remind investment advisers and their representatives that now is the time to renew their registrations for 2016. We also report on the action taken by the Financial Industry Regulatory Authority (FINRA) against five firms which orders them to pay $18 million in restitution to charities and retirement accounts which were overcharged for various mutual funds. Finally, we also include our regular features, our Calendar of Upcoming Events, On the Docket, Recent Enforcement Actions and News from the Regulators.
October 2015 Newsletter
In this month's issue we report on the 2015 Campbell University Law Review Symposium on Investment Crowdfunding, including featured remarks from Secretary of State Elaine F. Marshall on the importance of approving state crowdfunding legislation. We also highlight the North American Securities Administrators Association’s (NASAA) recently released 2015 Enforcement Report and its finding that senior investors continue to be a top target for investment scam artists. Also note important news from NASAA and FINRA regarding separate actions they are taking to help protect seniors and other vulnerable adults from financial exploitation. And please check out our piece on NASAA honoring SOSNC’s recently retired Securities Director Dave Massey with the prestigious Blue Sky Cube Award. We also report in this issue on SOSNC’s latest round of successful educational workshops for investment advisers, along with a new NASAA report finding signs of improved IA compliance from IA exam sample data reported by state regulators across the nation. Concerns about cyber-security are highlighted in our coverage of the recent National Cyber-Security Alliance Conference in Research Triangle Park, which included remarks from SOSNC Chief Deputy Secretary Rodney Maddox and an expert panel that included SOSNC Investor Education Program Director John Maron. And of course please check out our regular features: the Calendar of Upcoming Events, On the Docket, Recent Enforcement Actions, and News from the Regulators.
September 2015 Newsletter
In this month’s newsletter we are happy to announce the appointment of Kevin Harrington as SOSNC’s new Securities Division Director and Deputy Securities Administrator. We also have write-ups on two successful investor education events, one for residents of Columbus County and one for military families at Fort Bragg as part of a new partnership between SOSNC and the USO of NC. We’ve also included a piece from the Federal Trade Commission about the risk of affinity fraud targeting military families and how to avoid it, and a link to a helpful alert from the Consumer Financial Protection Bureau about a very useful free service that's available to service members to help protect them from identity theft during deployments. We also are reporting this month on the success of SOSNC’s new business outreach efforts, as well as our ever-growing investor education outreach. Also please note an invitation to the “Two Steps Ahead” cybersecurity conference being held in Research Triangle Park next Monday, September 21 by the National Cyber Security Alliance. And as always please check out our regular features: the Calendar of Upcoming Events, On the Docket, Recent Enforcement Actions, and News from the Regulators.
August 2015 Newsletter
In this issue we bid a fond farewell to NC Securities Director David Massey as he prepares to retire at the end of August. We are also report on the sentencing in federal court of Claude McDougal in a Ponzi scheme that cost victims in Charlotte and elsewhere $2.5 million, and of James H. Macy in a $4.7 million Ponzi scheme. Please note in our News from the Regulators Section at the end of the newsletter that the CFTC is now accepting whistleblower award claims in the Mason case. The NC Secretary of State’s Office investigated and prosecuted both the McDougal and Mason cases in coordination with the FBI and US Attorney’s Office. Please note we’ve included helpful tips on what to ask when you’re considering a new investment. Also this month we’re including an insightful article from Crowdfund Insider about how crowdfunding is changing the landscape for female entrepreneurs. This month’s issue also includes news on the selection of NC Secretary of State Elaine F. Marshall to the head the Securities Committee of the National Association of Secretaries of State, and information on the White House Conference on Aging. We have a story on the Secretary of State's work with the USO of North Carolina to provide a series of vital financial readiness training sessions for North Carolina's military. Also please note two helpful Investor Alerts regarding cybersecurity and understanding broker-dealer fees, as well as an Investor Bulletin from the SEC to educate investors about the recently amended Regulation A. And as always please check out our regular features: the Calendar of Upcoming Events, On the Docket, Recent Enforcement Actions, and News from the Regulators. Enforcement Actions, and News from the Regulators.
July 2015 Newsletter
This month's edition includes news from the SEC on action it has taken against a self-directed IRA provider in connection to the Ephren Taylor Ponzi scheme, as well as a link to a timely investor alert on the issue of self-directed IRAs and fraud risks. We also include news from the US Attorney's Office on the federal wire fraud charges against Kristine Louise Johnson in a scheme that has allegedly defrauded more than 10,000 investors, including many in the Charlotte area, as well as on the conviction of David Christopher Mayhew of Raleigh in a $2 million investment fraud scheme. Also featured is a report from a conference that drew experts and investigators to Charlotte this month to study the latest trends in financial crime, and a link to a survey of investment adviser firms that shows worries about cybersecurity on the rise in the financial industry. And check out our regular features: the Calendar of Upcoming Events, On the Docket, Recent Enforcement Actions, and News from the Regulators.
June 2015 Newsletter
This issue puts a spotlight on several major enforcement actions that culminated in lengthy prison sentences last month in state and federal court, as well as the growing concern about financial elder abuse. We report on the conviction and sentencing of Michael Anthony Jenkins in a $1.79 million commodities futures scam. Jenkins pleaded guilty on May 26 to three counts of felony securities fraud and one count of obtaining property by false pretenses, and was sentenced to a minimum of nine years and eight months in prison. We also report on the sentencing in federal court of several key players in the wide-ranging "Operation Wax House" investment and mortgage fraud scheme. This issue also highlights the growing concern about financial fraud aimed at the elderly as we prepare to mark the 10th anniversary of World Elder Abuse Awareness Day. Secretary of State Elaine F. Marshall is urging people to keep a keen eye out for financial elder abuse and report it when they suspect it. We also include a link to a disturbing report from the Pew Charitable Trust’s Stateline news service on this growing problem, as well as a helpful Consumer Advisory from the Securities and Exchange Commission on planning for possible diminished financial capacity. This month we also note the retirement of longtime Secretary of State Investor Education Specialist Barbara Bennett, and introduce readers to two new members of our investor education team who are offering IE workshops around the state. We have reprinted a release from the International Organization of Securities Commission (IOSCO), which has published the results of its Survey on Anti-Fraud Messaging, describing the investor education strategies of securities market regulators. Also note a report on FINRA’s launch of a new national ad campaign for its BrokerCheck free online tool for investors. And of course please check out our regular features: the Calendar of Upcoming Events, On the Docket, Recent Enforcement Actions, and News from the Regulators.
May 2015 Newsletter
In this issue we report that the NC Secretary of State's Office issued an advisory in recognition of Financial Literacy Month to help raise investor awareness about fees charged by broker-dealer firms for services and maintenance of investment accounts. The advisory, entitled "Understanding Broker-Dealer Fees" is part of the Department's "Informed Investor" series of alerts. We also report that the US Department of Labor is seeking public comment on a proposed rule that seeks to protect consumers from conflicts of interest in the retirement investment marketplace. Under the proposed rule, retirement advisers would be required to act as fiduciaries and put their clients' best interests before their own. We also feature the findings of a report jointly issued by the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) to help broker-dealers assess, craft, or refine their policies and procedures for investors as they prepare for and enter into retirement. We also include information about a toll-free Securities Helpline designed specifically for older adults by FINRA. The new helpline is available from Monday through Friday from 9:00 AM to 5:00 PM ET. We report on two alerts issued by the SEC. The first is for investors to beware companies who misuse the SEC's official seal in order to deceive investors into believing that the SEC is endorsing a particular security or company, something the SEC never does. The second alert is designed to educate investors about what happens when a publicly traded company declares bankruptcy. We include a notice from FINRA in which it is reported that the FINRA Board of Governors has approved changes to FINRA's Communications With the Public rules, as well as amendments to the Trading Activity Fee for firms with no customers that are engaged solely in proprietary trading activity for their own accounts. Finally, we include our regular features, the Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators.
March-April 2015 Newsletter
In this issue, we report on the arrest of Micah Christopher Wilson, 59, of Gastonia who was charged by investigators from the NC Securities Division with two counts of felony securities fraud and two counts of obtaining property by false pretenses. Investigators allege Wilson defrauded victims out of hundreds of thousands of dollars. We include a notice from the US Commodity Futures Trading Commission (CFTC) that it is conducting its first-ever SmartCheckSM Week. During the week of April 6-12, 2015, CFTC staff will highlight efforts to encourage investors to check the background of financial professionals before investing their money. We also report that four defendants have been sentenced to between 34 months to 54 months in prison for their roles in the Operation Wax House fraud investigation. To date, 91 people have been charged and 89 defendants have either pleaded guilty or have been convicted following trial and two are international fugitives. Of the 89 defendants convicted, 11 remain to be sentenced. We also report that the CFTC has filed a civil enforcement action in the U.S. District Court for the Middle District of Florida, charging Defendants Maverick International, Inc. and its principals, Wesley Allen Brown and Edward Rubin, with operating a fraudulent commodity pool and other violations of federal commodity laws. Brown currently resides in North Myrtle Beach, South Carolina, and Rubin resides in Winnabow, North Carolina. We include a summary of a new research report issued by the FINRA Investor Education Foundation that found that nearly two-thirds of self-reported financial fraud victims experienced at least one non-financial cost of fraud to a serious degree--including severe stress, anxiety, difficulty sleeping and depression. We have reprinted two Investor Bulletins from the US Securities and Exchange Commission (SEC) explaining options and options accounts. We also report on the FINRA Investor Education Foundation's Military Spouse Fellowship Program, which is accepting applications through April 17 for its 2015 class of military spouses. We also include our regular features, Calendar of Upcoming Events, On the Docket, and News from the Regulators.
January-February 2015 Newsletter
With the number of cyber-attacks aimed at various financial institutions growing each day, the Department of the Secretary of State Securities Division urges investors to contact their own financial services providers -- including their brokers and investment advisers -- to find out what policies and procedures each firm has implemented to safeguard the investor's personal financial information. Included in this issue is a cybersecurity alert with a list of just some of the questions investors should ask. We also report on the latest in the on-going series of workshops the Division recently conducted in Charlotte and Raleigh for those investment advisers subject to the Division's regulatory oversight. We also mark America Saves Week by encouraging investors to think and talk about their personal finances. To help investors do just that, we reprint two investor bulletins from the U.S. Securities and Exchange Commission, one offering tips on how to better manage one's finances, and one detailing how investors harmed by fraudulent investment schemes may recover some of their money. Finally, we include our regular features, our Calendar of Upcoming Events, information about criminal cases that are On The Docket, our Recent Enforcement Actions, and News from the Regulators.
November 2014 Newsletter
In this issue we report on the sentencing of Sean F. Mescall, of Charlotte, to over 16 years in prison for orchestrating a Ponzi scheme that defrauded victims of more than $1.5 million. We also report on the arrest of 19-year old David Alan Topping, of Oak Island, NC, on one charge of felony securities fraud. NC Securities Division investigators allege that Topping defrauded victims out of more than $100,000. We also report on the indictment of former ZeekRewards president, Paul Burks, of Lexington, NC, on federal charges for operating an Internet Ponzi scheme that took in more than $850 million. We feature a report that identifies the top persistent and emerging threats facing investors in 2015. We also feature a report from the North American Securities Administrators Association (NASAA) showing a rise in the number of enforcement actions against licensed broker sales agents over the past year. We include another installment in the continuing "Informed Investor" series of alerts. The latest alert is about so-called "high-yield investment programs", or HYIPs. Learn what you should know about these types of Ponzi schemes. We also reprint two alerts issued by the Securities and Exchange Commission (SEC), one providing information for military personnel and one explaining how private placements under Regulation D work. We also reprint a NASAA alert warning investors to beware of Ebola-related investment schemes. Finally, we include our regular features: Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators.
September-October 2014 Newsletter
In this edition we report that Ephren Taylor, II, and his co-defendant, Wendy Jean Connor, both have pled guilty in U.S. District Court in Atlanta, GA, for participating in a conspiracy to defraud hundreds of investors of more than $7 million. Both are scheduled to be sentenced by the Court on December 18, 2014. Because Taylor used his standing in the African-American and faith-based communities, he case is an example of what the Securities Division refers to as "affinity fraud." We include a link to one of our informational brochures explaining affinity fraud and how to avoid falling victim to it. We also include two announcements from the North American Securities Administrators Association (NASAA), one requesting public comment on a proposed model rule for registered investment advisers, and one stating that a working group consisting of regulators and industry representatives had been convened to develop improved broker-dealer fee disclosure. We reprint an Investor Alert from the U.S. Securities and Exchange Commission (SEC) warning investors to be watchful for "advance fee fraud," and we include an Investor Alert on frontier funds that was issued by the Financial Industry Regulatory Authority (FINRA). Finally, we include our Calendar of Upcoming Events, and On The Docket, Recent Enforcement Actions and News from the Regulators features.
June-July 2014 Newsletter
In this edition, we report on the conviction of Steven Jones, of Charlotte, the latest person to be convicted of crimes related to Operation Wax House, an investigation which began in 2007 and has netted 91 defendants to date, 86 of whom have pleaded guilty or been convicted following a trial. The NC Department of the Secretary of State Securities Division has been an active partner in Operation Wax House. Mr. Jones was convicted of racketeering conspiracy, securities fraud, wire fraud scheme to defraud investors and money laundering conspiracy. We also report that the North American Securities Administrators Association (NASAA) is actively seeking public comment on a proposed model rule for the electronic filing of Form D and other securities registration or notice filing documents. Comments are due on or before July 30, 2014. We also include a link to NASAA's 2013-14 annual report detailing the activities NASAA and its member jurisdictions, including North Carolina, have undertaken over the past year to protect investors while promoting innovative ways to foster small business capital formation. We also include a new Investor Bulletin ("Transferring Your Investment Account) and Investor Alert ("Check Out Your Financial Professional") published by the Securities and Exchange Commission (SEC). We also have included an alert published by the Financial Industry Regulatory Authority (FINRA) entitled, "Nutraceutical Stock Schemes--Don't Supplement Your Portfolio with These Companies". We also include our regular features: Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions, and News from the Regulators.
April-May 2014 Newsletter
In this edition, we include an investor advisory on virtual currency, information about a state-wide effort to combat elder fraud the Securities Division is undertaking with other partners and a notice about a free fraud prevention program in Wilmington. We also include the results of a survey conducted by the North American Securities Administrators Association which highlights the wide disparity in how broker-dealers disclose the fees they charge their customers and the questionable practices some broker-dealers engage in with regard to fees and markups. Also included is an update on the effort by state securities regulators to streamline a multi-state coordinated review protocol to ease regulatory compliance costs on small companies attempting to raise capital under a provision of the Jumpstart Our Business Startups (JOBS) Act. We also include an update in the case involving Mitchell Brian Huffman of Charlotte, North Carolina. Mr. Huffman has been ordered to pay a $2.1 million civil monetary penalty for operating a fraudulent commodity pool scheme that defrauded customers of more than $3.2 million in connection with exchange-traded commodity futures contracts. We include an Investor Bulletin originally published by the US Securities and Exchange Commission on how to open a brokerage account. Finally, we include our usual Calendar of Upcoming Events, Recent Enforcement Actions and News from the Regulators.
February-March 2014 Newsletter
In this edition, we update the case involving Michael Anthony Jenkins, a Raleigh man accused of conducting a Ponzi scheme involving E-mini futures. He was recently ordered by Judge James C. Fox of the US District Court for the Eastern District of North Carolina to pay restitution and penalties totaling over $5.2 million as the result of a civil case brought against Jenkins by the US Commodity Futures Trading Commission (CFTC). Law enforcement agents of the NC Department of the Secretary of State Securities Division arrested Jenkins on August 17, 2012, on three counts of securities fraud. He has been in Wake County Jail under a secured bond awaiting trial ever since. Also in this edition, Secretary of State Elaine F. Marshall announces the Top 10 financial products and practices that threaten to trap unwary investors and small business owners during 2014 as compiled by the North American Securities Administrators Association (NASAA), of which North Carolina is a member. We share five tips compiled by FINRA that can help everyone achieve greater financial security. We also provide an in-depth analysis of the SEC's proposed rule on so-called Regulation A+ securities offerings and why the proposed rules, if implemented, would be harmful to investors and small businesses alike. We also reprint SEC Investor Bulletins on how fees and expenses affect your investment portfolio and on things you should know about variable annuities. Finally, we include our regular features: Calendar of Upcoming Events; On The Docket; Recent Enforcement Actions; and News from the Regulators.
January 2014 Newsletter
In this issue, we devote considerable attention to the issue of equity crowdfunding. Last October, the SEC proposed rules on equity crowdfunding in accordance with the federal JOBS Act. We provide background information on this topic as well as links to the SEC's proposed rules. We also provide information every investor and small business alike should consider before jumping into equity crowdfunding. We also include a FINRA investor alert on closed-end funds. We report that Daniel H. Williford of Stateville is facing federal charges for his role in a multi-million-dollar Ponzi scheme, as are Dawn Wright-Olivares and step-son Daniel Olivares, both lately of Arkansas, for their role in the ZeekRewards Ponzi and pyramid scheme. We also include an SEC investor bulletin on how to interpret the credit ratings of debt securities like bonds, notes and other debt instruments. We also include our regular features: On The Docket; Recent Enforcement Actions; and News from the Regulators.
November 2013 Newsletter
In this issue, we report on the arrest of Rondell Scott Hedrick of Lexington, NC. Law Enforcement agents with the North Carolina Secretary of State Division of Securities charged Mr. Hedrick, 48, of Lexington on October 27, 2013, with 27 felony counts related to an alleged precious metals investment scheme. He was placed the Davidson County Jail under $150,000 secured bond. We also report on efforts to introduce the principles of financial literacy into the state’s public school classrooms and provide links to useful resources. We also report that we have posted two newly updated resources on our website that are designed to help investors better understand the responsibilities of—and differences between—the various investment professionals they may encounter. We report that state securities regulators around the country are calling on Congress to take a balanced approach to capital formation proposals to restore investor confidence. We also report the findings of a national survey conducted on behalf of the FINRA Foundation which reveals that over 80 percent of respondents have been solicited to participate in potentially fraudulent schemes, and over 40 percent of those surveyed cannot identify some classic red flags of fraud, costing Americans about $50 billion annually. We also include links to new guides for advocates of financial crimes victims, for commodity futures fraud whistleblowers, and for caregivers charged with managing money for their loved ones. We also report on a survey of state securities regulators showing little difference in the type or frequency of deficiencies between existing state investment advisers and those advisers who switched from federal to state oversight as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act. We also provide updates to our recurring sections, Calendar of Upcoming Events, On The Docket, and News from the Regulators.
April-May 2013 Newsletter
In this issue, we report on the success of “Elder Abuse: A Multidisciplinary Approach to Justice,” the first multi-jurisdictional conference devoted to the topic of elder abuse. We include an update in the on-going “Operation Wax House” racketeering case that involves a total of 92 defendants, many of whom are North Carolina residents. We report on the arrest of James H. Mason of Graham, NC, on charges that he solicited $4.7 million from at least 500 victims in a foreign currency exchange Ponzi scheme. In a similar but separate case, we report that a federal judge has ordered Timothy Bailey of Monroe and Michael Hudspeth, formerly of Statesville, to pay over $1.8 million in restitution and fines in connection with an off-exchange foreign currency Ponzi scheme that solicited at least 22 people. This spate of foreign currency (forex) schemes has prompted the Securities Division to re-issue an investor alert warning investors about the potential dangers associated with forex trading. We also report that fifteen North Carolina-based employers have opted to enroll some or all of their employees in the third round of the Investor Education in Your Workplace® Program. Once again the NC Department of the Secretary of State is making this 10-part, online investor education program available free-of-charge to up to 1185 people across the state. In this issue, we also unveil the two newest advisories in our “Informed Investor” series. One advisory deals with changes that are anticipated with the way private placement offerings may be marketed. The other advisory helps explain the differing duties and responsibilities of various financial service providers. This segues into the findings of a study conducted by the Consumer Financial Protection Bureau (CFPB) confirming that senior citizens are confused by the array of titles used by financial service providers. We also announce an upcoming series of seminars on business essentials for small businesses. Finally, we include our regular features: Calendar of Upcoming Events; On The Docket; Recent Enforcement Actions; and News from the Regulators.
March 2013 Newsletter
In this issue, we report on the Temporary Cease and Desist Order the NC Secretary of State Securities Division issued to Roman Novak, Radoslav Novak and Inter Reef LTD d/b/a Profitable Sunrise to bar them from offering and selling or attempting to sell securities in North Carolina. We also report that Gary D. Martin of St. Augustine, FL, and formerly of North Carolina, was sentenced to ten years in prison and ordered to pay $31.7 million restitution for his role in the $32.5 million Queen Shoals Ponzi scheme. The Queen Shoals mastermind, Sidney S. Hanson, is currently serving a 22-year federal sentence for his involvement in the scheme. We also announce that the North American Securities Administrators Association (NASAA) is teaming up with AARP to conduct a webinar on Tuesday, April 23, 2013, at 2:00 PM, on ways to avoid financial fraud. Registration details can be found in the newsletter by clicking the link above. We also provide a look at how well North Carolina participants did in the "Investor Education in Your Workplace® Program". We are also pleased to announce that we will be sponsoring another round of the program beginning May 6. Registration details are included in the newsletter by clicking the link above. We also republish an investor alert prepared by the Securities and Exchange Commission (SEC) concerning understanding what it means to grant your investment adviser "custody" of your investment assets. Finally, we include the usual features: Calendar of Upcoming Events, On The Docket, and News from the Regulators.
January-February 2013 Newsletter
In this issue, we report on the sentencing of two men, Mitchell Brian Huffman and Robert S. Moss, both of Charlotte, to prison for operating separate Ponzi schemes. We also provide an update on the status of the Investor Education in Your Workplace® Program in North Carolina. The Securities Division announces that it is sponsoring another round of the program to start in May and which will run until August. Interested employers wishing to bring the program to their employees should contact John Maron for more information. We also report that Barbara Bennett, Investor Education Specialist with the Securities Division, was named as the Department's "2012 Employee of the Year". We also report on an effort by the Department's Corporations and Securities Divisions to provide training to members of the state community college system's Small Business Center Network. We provide information about investor education resources available to citizens and members of the armed services and report on activities undertaken by the Division as part of Military Saves and America Saves Week. We report on efforts taken by the National Futures Association (NFA) to help investors research the professional backgrounds of their commodities brokers. On that theme, we reprint an article published by the Commodities Futures Trading Commission (CFTC) providing consumer information about commodity trading systems that are sold on the Internet. We also reprint an investor bulletin originally published by the Securities and Exchange Commission (SEC) explaining credit risk as it relates to municipal bonds. As usual, we list our Calendar of Upcoming Events, cases that are On The Docket, Recent Enforcement Actions and News from the Regulators.
December 2012 Newsletter
In this issue, we report on the seminar the NC Department of the Secretary of State conducted at the Mountain Area Health Education Center (MAHEC) focusing on preventing elder financial fraud. Secretary Elaine F. Marshall joined Dr. Jan Busby-Whitehead in this special seminar entitled “Elder Investment Fraud and Financial Exploitation (EIFFE) Prevention Program.” We also report on the findings of a new study conducted by the UCLA Brain Research Institute which sheds light on why older adults become fraud victims more often than they younger counterparts. We also provide the latest update on the progress of the Investor Education in Your Workplace® Program. We also provide information about a hot topic in the world of investing, crowdfunding, and we re-print an advisory to small businesses about crowdfunding. We also re-print an updated Investor Alert issued by the Securities and Exchange Commission warning investors about fake government websites. Finally, we provide our usual features, including an updated Calendar of Upcoming Events and On The Docket with an update on the federal conviction of Sean Fitzgerald Mescall on charges of securities fraud, wire fraud and money laundering. We report on the issuance of a Temporary Order to Cease and Desist against Rondell Scott Hedrick and Hedrick Consulting, Incorporated. Finally, we include the latest News from the Regulators.
November 2012 Newsletter
In this issue, we report that Carolyn Willis Grant has been charged with and has pleaded guilty to one felony count of mail fraud in connection with a criminal investigation that was conducted by the Securities Division of the North Carolina Department of the Secretary of State and the U.S. Postal Inspector’s Office. In a separate case, also being conducted by the Securities Division, we report that the Commodity Futures Trading Commission has filed civil enforcement action against Michael Anthony Jenkins who was indicted on August 20 on three counts of securities fraud and who is in custody and awaiting trial. We also report on a fraud seminar in Matthews, NC, that was sponsored by the Better Business Bureau Consumer Foundation of Southern Piedmont at which Secretary of State Elaine F. Marshall spoke. We also report on the release of a Government Accountability Office (GAO) report calling on various federal agencies to put together a strategy to effectively combat elder financial exploitation. We report that David Massey, Deputy Securities Administrator and Director of the NC Securities Division, has been reappointed to a new two-year term representing the North American Securities Administrators Association (NASAA) on the Financial Stability Oversight Council (FSOC). We also report on the early results of the Investor Education in Your Workplace ® program that is currently underway in North Carolina. We include investor bulletins on affinity fraud and on how to read confirmation statements. We also preview a new print advertisement that the Securities Division is sponsoring in the Triad- and Triangle-area Retirement Resource Guide. We also include a warning for investors to be aware of schemes relating to Hurricane Sandy relief efforts. Finally, we include our regular features, the Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators.
September-October 2012 Newsletter
In this double-issue, we report on the tenth in the on-going series of compliance workshops the Division has conducted for registered investment advisers and their representatives. We also report on the Division’s latest investor education initiative to train local law enforcement investigators about securities-related schemes. We report on the NC Senior Consumer Fraud Task Force’s 2012 Public and Private Sector Award winners, which includes the Division’s own John Maron. We include information about the Elder Investment Fraud and Financial Exploitation (EIFFE) Prevention Program training the Division is sponsoring at the Mountain Area Health Education Center (MAHEC) on November 31. Registration details are included. We also recount the Department’s involvement with the 2012 NC State Fair. We provide an update on the status of the Investor Education in Your Workplace® program the Department is sponsoring for a second year. Nearly 1000 employees of over 20 North Carolina-based employers, including the North Carolina National Guard, are participating in this year’s program. We also report on “Operation Wax House,” a joint investigation being conducted by the Federal Bureau of Investigation (FBI), the Internal Revenue Service (IRS), the NC Department of the Secretary of State, and the U.S. Attorney’s Office for the Western District of North Carolina, in which 81 defendants have been charged for their alleged involvement in what prosecutors are calling a criminal organization operating principally in Charlotte and Waxhaw, NC, which stole more than $75 million from investors and mortgage lenders. We also provide information about FINRA’s 2013 Web CRD®/IARD™ renewal procedures. We include two investor alerts, one issued by the Securities and Exchange Commission on what investors can do about lost or stolen securities, and one issued by FINRA concerning what investors need to know about trading halts, suspensions and other interruptions. Finally, we include our regular features, the Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators.
August 2012 Newsletter
In this issue, we report the arrest of Michael Anthony Jenkins of Raleigh on three felony warrants for securities fraud. We also provide important information for investors of ZeekRewards.com now that the Securities and Exchange Commission has announced fraud charges and an emergency asset freeze against Rex Venture Group, LLC d/b/a ZeekRewards.com, and its owner, Paul R. Burks of Lexington, NC. We also spotlight the Investor Education in Your Workplace ® program and encourage employers to sign up for the Fall 2012 campaign. We reprint a cautionary article by Secretary Elaine F. Marshall about how referral fees could trigger important investment adviser licensing rules. We also announce the implementation of Legal Files, a powerful case and management software system that will enable the Securities Division to administer and enforce the state’s securities laws more effectively and efficiently, thereby resulting in greater investor protection. We publish updated answers to some of the frequently asked questions we receive from investors about securities. We republish the findings of a survey conducted by the Investor Protection Trust and the Investor Protection Institute concerning the financial exploitation of seniors. We also announce that the Securities Division will conduct another training session for medical professionals on this topic at the Mountain Area Health Education Center (MAHEC) in Asheville on November 30. Details will follow. We also reprint an investor alert published by FINRA dealing with public non-traded real estate investment trust (REITs). We also update our regular features, the Calendar of Upcoming Events, On The Docket, and News from the Regulators.
July 2012 Newsletter
In this issue, we announce the Securities Division’s continued participation in the Investor Education in Your Workplace ® program, a ten-part online course of instruction that provides unbiased information that has already been field tested by nearly 8,500 employees in hundreds of workplaces in North Carolina, Pennsylvania and Wisconsin. Employers wishing to enroll their employees may do so for free on a first-come, first-served basis. The NC Securities Division is covering the cost for up to 1500 people to participate in the program. For more information about the program, turn to page two of the newsletter or go to www.ieiyw.com/webinars to sign up for an informational webinar. We also report that the Securities Division recently conducted its ninth compliance workshop for investment advisers. Additional workshops are being planned and the schedule will be announced when it has been finalized. Last October, we re-printed an investor alert jointly produced by the U.S. Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) concerning some of the risks associated with self-directed IRAs. On July 18th, NASAA and the Retirement Industry Trust Association (RITA) jointly conducted an hour-long webinar about the challenges and opportunities for self-directed IRAs. We include a link to the audio recording for the webinar which will help investors better understand how these investment products work and the risks associated with them. We also announce that the Securities Division has updated its Frequently Asked Questions (FAQs) for investors. We include an investor alert from FINRA concerning Exchange-Traded Notes (ETNs) and two alerts from the SEC concerning newly approved safeguards to address market volatility and ways investors can get information about international investments. We also announce that the Division has added five new titles to its library of free investor education materials. These new titles deal with derivatives, social networking, exchange-traded funds (ETFs), gold and peer-to-peer lending. We also include our updated Calendar of Upcoming Events, Recent Enforcement Actions, and the latest News from the Regulators.
June 2012 Newsletter
In this issue, we report on the investor education event Secretary Elaine Marshall attended in Concord, NC, on June 7. We include video excerpts of her keynote speech. We also include a Request for Information published by the Consumer Financial Protection Bureau (CFPB) regarding senior financial exploitation. We also include an interview with David Massey, Director of the NC Securities Division, about the upcoming “IA Switch” and other topics of investor education and protection. We include two SEC Investor Bulletins, one explaining how to read an 8-K, the form companies must file whenever there is a significant corporate event that triggers a disclosure, and one explaining the role of the Depository Trust Company and what “chills” and “freezes” are and what effect they have on an investor’s ability to hold and trade securities. Finally, we include our regular Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators features.
May 2012 Newsletter
In this issue, we invite people in the Charlotte/Concord area to attend an investment fraud seminar at the Embassy Suites Charlotte-Concord Hotel on June 7 from 5:30 p.m. until 8:00 p.m. The event is free and dinner is included, but registration is required. See the newsletter for registration details. We also report on a bill pending in the U.S. House of Representatives that would require investment advisers to become members of a self-regulating organization (SRO). The bill has advisers and their clients alike concerned because, if enacted, the bill would impose a new layer of regulation on advisers and require them to fund the SRO's activities through membership fees. We also include an investor alert about "crowdfunding" and explain how it works and things investors should be wary of when considering a crowdfunded investment opportunity. We are also pleased to report that the Investor Education Program has now successfully completed its goal of providing an educational presentation in all 100 of North Carolina's counties. You will have to read the newsletter to see which county pushed us over the top! With June 15th being World Elder Abuse Awareness Day, we provide information for people to use to report suspected elder abuse. We also include an investor alert from FINRA concerning nutraceutical stock schemes and one from the SEC concerning ways seniors can protect themselves from schemes when using social media. We include the usual Calendar of Upcoming Events and hope you will join us when we come to a location near you. We also provide updates on current pending criminal cases as well as the latest news from other regulators.
April 2012 Newsletter
In this issue, we announce that the Secretary of State's homepage has been given a makeover and that we have added a second domain name: www.sosnc.gov. We also report that Gary Bartko, a former securities attorney from Atlanta, received a 23-year sentence for his role in an investment fraud scheme. We also announce that Secretary of State Elaine F. Marshall will be the keynote speaker at a seminar jointly sponsored by the Financial Industry Regulatory Authority (FINRA), the NC Department of the Secretary of State, AARP North Carolina and the Securities and Exchange Commission (SEC). This seminar, entitled "Get Smart About Investment Fraud", will be held at the Embassy Suites Charlotte-Concord Hotel on Thursday, June 7, 2012, from 5:30 p.m. to 8:00 p.m. The seminar is free and dinner is included, but registration is required. See the newsletter for details. We also report that the SEC has filed fraud charges against self-proclaimed "social capitalist" Ephren W. Taylor, II. The SEC alleges that Mr. Taylor operated a Ponzi scheme to swindle over $11 million, primarily from African-American churchgoers. We include two SEC Investor Bulletins, one dealing with municipal bonds and the other warning of pre-IPO investment schemes. We also include a FINRA alert about advance-fee schemes that target US investors through fake websites designed to look like real regulatory websites. Finally, we include our regular features, including our Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators, which includes a notice from the SEC requesting public comments on the Jumpstart Our Business Startups (JOBS) Act and a statement from the North American Securities Administrators Association (NASAA) on the "Investment Adviser Oversight Act."
March 2012 Newsletter
In this issue we report on the Elder Investment Fraud and Financial Exploitation (EIFFE) Prevention Program that was conducted at the J. Paul Sticht Center on Aging at Wake Forest Baptist Hospital on March 23. We also note that on April 26, the Investor Education Program will have achieved of its goal of conducting at least one educational program in all 100 of North Carolina’s counties when we do a presentation at the Pamlico County Senior Services office in Alliance, NC. We include a notice that the U.S. Treasury Department is in the midst of holding its Third Annual National Financial Capability Challenge. We include investor alerts originally published by the Securities and Exchange Commission (SEC) on Real Estate Investment Trusts (REITs) and by the Financial Industry Regulatory Authority (FINRA) on how to read and understand your brokerage account statements and trade confirmations. On our Multimedia Page we include video footage of Secretary Elaine F. Marshall speaking at the EIFFE program. We also include an updated Calendar of Events as well as our On The Docket and News From the Regulators features.
February 2012 Newsletter
In this issue, we report that Gary D. Martin of St. Augustine, Florida, pleaded guilty on February 8, 2012, to conducting a money laundering conspiracy in connection with the $32.5 million Queen Shoals Ponzi scheme. This is the second conviction arising from the Queen Shoals Ponzi scheme investigation which was conducted by the FBI with assistance from the North Carolina Securities Division, the Commodities Futures Trading Commission (CFTC) and the Florida Bureau of Financial Investigations. Secretary Elaine F. Marshall releases her list of twelve investment traps for 2012. We also unveil a new feature of our newsletter, a Multimedia Section which features a short video on elder financial fraud which complements the seminar the NC Department of the Secretary of State is co-sponsoring on March 23 at the Sticht Center on Aging at Wake Forest Baptist Hospital in Winston-Salem. Program registration information is included in this newsletter. We also feature an article on money management for new couples. We also spotlight ten of our investor education brochures which are free to order. We include alerts issued by the CFTC on precious metals fraud and by the North American Securities Administrations Association (NASAA) on schemes that seek to take advantage of people’s frustration with the historically low interest rates being earned on fixed investment products. As usual, we include our regular features: Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators.
January 2012 Newsletter
Beginning with this edition, the Securities Division’s newsletter is now being published in FlipBook format, making it easier to view, read and share on a variety of electronic platforms and social media sites. In this edition, we encourage readers to start 2012 off with a resolution to “Check Before You Invest” by contacting the Securities Division to check to see if their financial professional is properly registered to sell or advise about investment securities. We also report having received a huge shipment of the updated Financial Field Manual, a personal finance publication for military personnel and their families that is jointly published by Kiplinger’s Personal Finance magazine and the Better Business Bureau. Contact the Securities Division to order your free copy today. We republish an investor alert from the Securities and Exchange Commission on how to avoid falling victim to investment fraud while using social media sites. We also republish an investor alert from the Financial Industry Regulatory Authority (FINRA) on what investors should do if they or their email account is hacked illegally. We also include an updated Calendar of Upcoming Events listing the investor education events that have been scheduled. Be sure to check to see if one is scheduled near you and encourage your neighbors to attend. Finally, we include the latest information about pending enforcement actions and news from some of the other regulators.
November 2011 Newsletter
In this issue, we report that a federal court has ordered Sidney S. Hanson and Charlotte M. Hanson, a Charlotte couple, and their companies to pay $24 million for defrauding customers in a foreign currency Ponzi scheme. Sidney Hanson is currently a federal prisoner awaiting sentencing after pleading guilty on March 31, 2011 to securities fraud and mail fraud. We also reprint an investor alert issued by the Securities and Exchange Commission warning investors of potential fraud associated with seminars purporting to teach trading strategies. We also provide information for investment advisers relating to the switch from federal to state regulatory oversight as mandated by the Dodd-Frank Act. We also report that the U.S. District Court for the Middle District of North Carolina has ordered Rodney W. Whitney and Nicholas T. Cox and their company, Integra Capital Management, LLC, to pay over $6.9 million in restitution to victims of a Ponzi scheme involving commodity futures and off-exchange foreign currency transactions. We also provide links to investor alerts issued by the Financial Industry Regulatory Authority (FINRA), including one concerning publicly registered non-exchange traded real estate investment trusts (“non-traded REITs). We provide updates on the liquidation proceeding for MF Global, Inc., from the Securities Investor Protection Corporation (SIPC), as well as our Calendar of Upcoming Events and recent enforcement actions.
October 2011 Newsletter
In this issue we report that NC Secretary of State Elaine F. Marshall was awarded the 2011 Public Sector Award by the NC Senior Consumer Fraud Task Force in recognition of her work to protect North Carolina consumers from a wide range of frauds targeting consumers, from securities and charities schemes to counterfeit trademarked goods and notary fraud. We include a copy of the letter Secretary Marshall wrote to three members of North Carolina’s congressional delegation expressing her concerns about some of the provisions of H.R. 2930, the Entrepreneur Access to Capital Act. We report that Bryan Keith Coats of Clayton, NC, pleaded guilty in U.S. District Court to his role in $40 million Black Diamond Ponzi scheme. Coats is the seventh person to be convicted in this case. We also report that the U.S. District Court for the Western District of North Carolina entered an order of default judgment and permanent injunction against Barki, LLC, a foreign currency firm owned by Bruce C. Kramer of Mint Hill, NC. The order stems from an enforcement action filed in March 2009 by the US Commodity Futures Trading Commission (CFTC) that charged Barki and Kramer with fraudulent solicitation and misappropriation in a $38 million Ponzi scheme. Also included are articles on the Division’s activities at the 2011 NC State Fair, actions by the states during 2011 on behalf of investors around the country, an investor alert about self-directed IRAs, and the results of coordinated state examinations of investment advisers. We also reprint a Courthouse News Service article on E*Trade. Finally, we update our regular features, our Calendar of Upcoming Events, cases that are On The Docket, Recent Enforcement Actions and News from the Regulators.
September 2011 Newsletter
In this issue we spotlight the top investor traps and threats as identified by the North American Securities Administrators Association (NASAA). This year’s report categorizes the threats by product or practice. The investment products causing state regulators the greatest concern are schemes involving distressed real estate, energy investments, gold and precious metal investments, promissory notes and securitized life settlement contracts. The investment practices causing concern include affinity fraud, bogus or exaggerated credentials, mirror trading, private placements, and securities and investment advice offered by unlicensed agents. We also feature the latest article in the NASAA “Informed Investor” series. This latest article focuses on the ways con artists find victims by exploiting social networks. We also feature an updated alert issued by the U.S. Securities and Exchange Commission (SEC) warning investors of an advance fee scheme by Imperia Invest IBC targeting deaf investors. We also reprint an announcement made by the Financial Industry Regulatory Authority (FINRA) about the fines they have imposed on five broker-dealer firms for mischaracterizing the commissions they charged clients as handling fees.
May 2011 Newsletter
In this issue we report that Ronnie D. Rainey, 44, of Elk City, Oklahoma, was sentenced to 10 years’ imprisonment by U.S. District Court Judge James C. Dever, III, for his role in defrauding approximately 65 investors -- including 12 North Carolina investors -- out of $2.2 million. We provide information on two upcoming investor education events, one in Wilmington on June 16, and one in Greensboro on June 22. The Wilmington event is being jointly sponsored by the NC Department of the Secretary of State, the Financial Industry Regulatory Authority (FINRA), the Securities and Exchange Commission (SEC), the Cape Fear Area Agency on Aging and AARP North Carolina. The Greensboro event is being sponsored by the NC Department of Public Instruction and will provide financial literacy training to teachers from across the state. We also spotlight the Investing Online Resource Center, a site where investors can learn how to invest safely through online investment sites. We also reprint a news release from FINRA announcing its creation of a web-based searchable system that makes its disciplinary actions against licensed brokerage firms and stockbrokers accessible via the FINRA website. We also include our usual Calendar of Upcoming Events as well as the latest enforcement actions and regulatory news.
December 2010 Newsletter
In this issue we discuss the risks associated with an emerging online financial service known as peer-to-peer, or P2P, lending. We also provide tips for "rebalancing" one's portfolio as the New Year approaches. We highlight the third round of IA compliance workshops that were held in Cary, NC, and we provide the SEC's timetable for releasing studies or proposed rules as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
October 2010 Newsletter
In this issue, the Securities Division urges investors to be mindful of the risks associated with investing in gold. We include an article written by David Massey, President of the North American Securities Administrators Association and Director of the North Carolina Securities Division, concerning changes that have been made to Part 2 of Form ADV. This form is used by investment advisers during the registration process and for making required disclosures about their business activities. We also reprint an investor alert originally published by the Financial Industry Regulatory Authority (FINRA) concerning high-yield investment programs (HYIPs). We also include the usual Calendar of Upcoming Events, cases that are On The Docket and various announcements from other federal regulators.
September 2010 Newsletter
In this issue we report on the appointment of David S. Massey, NC Deputy Securities Administrator, as the 2010-11 president of the North American Securities Administrators Association (NASAA), the oldest international investor protection organization. We also report on the first of a planned series of compliance workshops for NC-registered investment advisers and investment adviser representatives that was held in Asheville, NC. The second workshop is planned for November 1st and 2nd in Charlotte. Click the link above for registration details. We also reprint a NASAA news release concerning the study by the federal Securities and Exchange Commission (SEC) into the differing standards of care owed to retail investors by investment advisers and broker-dealers when offering investment advice. We also reprint an SEC investor bulletin advising investors to be aware of risks when trading in stock after the SEC has suspended trading in the shares. In addition to including our latest calendar of upcoming investor education events and docket information, we include notices about some upcoming events, including a presentation sponsored by the North Carolina Council on Economic Education featuring Ms. Lori Schock, Director of the SEC's Office of Investor Education and Advocacy, and a video replay of a segment of a Continuing Legal Education (CLE) program the Securities Division sponsored in May 2009 entitled, Representing Investors: An Introduction to Securities Arbitration. This video replay is being conducted by the NC Bar Association. Click the link above for registration information.
August 2010 Newsletter
In this issue, Secretary of State Elaine Marshall identifies the Top Investor Traps of 2010, the Securities Division announces the first of a series of compliance workshops for state-registered investment advisers, and we provide a preview of three new investor education resources that we are making available to investors: "Affinity Fraud", "Baby Boomers Beware", and an information sheet about the Securities Division and ways investors can protect themselves from potential fraud. As always, we provide a calendar of upcoming events. Also included is a joint statement issued by the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA) and North American Securities Administrators Association (NASAA) that outlines practices being used by financial services firms to strengthen their policies and procedures for serving senior investors as they approach and begin retirement. We include a link to an investment fraud awareness quiz to test your susceptibility to investment fraud, and we provide important information from the federal regulators.
July 2010 Newsletter
In this issue, we highlight the important investor protection provisions contained in the Dodd-Frank Wall Street Reform Act which President Obama signed into law on July 21, 2010. Also, in late-June, the North American Securities Administrators Association (NASAA) announced the launch of an enhancement to the Investment Adviser Public Disclosure (IAPD) website that allows investors to access information electronically on more than 220,000 individuals who work for money management, financial planning and other investment advisory firms. The information will include the person's background information such as customer complaints, criminal or regulatory disclosures, professional qualifications, and employment history. Click the link above to read this article and find out where you can go to get this information about your investment professional. We also include an announcement from the Internal Revenue Service (IRS) about changes that have been made to Form SS-4, Application for Employer Identification Number (EIN), to clearly identify the applicant's true owner. Representatives of the Securities Division also paid multiple visits to BizCamp, a week-long day camp offered by Junior Achievement of Central Carolinas, Inc., for students ages 10-14. Students create their own businesses, invent new products and run their simulated city for 5 days as they hone skills in math, communications, analytical thinking, teamwork, citizenship, business ethics and personal finance. This year's camping experience included a surprise: an investment scheme! Follow the link above to find out what made students give up approximately 12% of their gross "pay." In addition to our Calendar of Upcoming Events and the On The Docket sections, we also feature an essay by a high school student who interned in the Securities Division. We asked her to provide her perspective on money and finances. Finally, we include a report on some of the many outreach activities the Securities Division conducted over the past month, visiting almost 1000 people in 18 different communities in 13 different counties.
June 2010 Newsletter
In this issue, Secretary Elaine Marshall calls on House-Senate conferees negotiating a compromise financial industry regulatory reform bill to adopt strong investor protection provisions in the final bill, including provisions that would 1) apply a fiduciary standard to broker-dealers and insurance agents who provide individualized investment advice; 2) require rule changes that would prevent securities law violators from being able to claim certain filing exemptions on private offerings and that would exclude the value of a person's primary residence from the definition of "accredited investor;" 3) allow state securities regulators to assume responsibility for regulating investment advisers with up to $100 million in assets under management; 4) permit the inclusion of representatives from state securities, banking and insurance regulators as nonvoting members of a new Financial Stability Oversight Council; and 5) end the requirement that client-broker disputes be resolved through mandatory arbitration. We include an alert released by the Securities and Exchange Commission (SEC) that warns investors about schemes based on false Gulf oil spill cleanup claims, as well as a warning from David Massey, North Carolina's Deputy Securities Administrator, about investment opportunities that purport to address any natural or man-made disaster. We include reports on presentations representatives from the Securities Division gave recently to the Investors Roundtable of Wilmington, the Financial Fraud, Schemes and Exploitation Summit in Asheville, and to the Financial Planners Association of the Triangle. We include our updated calendar of upcoming events and a new feature, a section entitled "On The Docket" which will keep track of the public proceedings in cases in which the North Carolina Securities Division has had some involvement, either as the lead investigative agency or in a supporting role. Finally, we include public notices we think would be of interest to investors from the Commodities Futures Trading Commission (CFTC), SEC and the Financial Industry Regulatory Authority (FINRA).
February 2010 Newsletter
In this issue, we provide tips on how to avoid the hidden risks related to seminars or computer programs promoting foreign currency exchange trading, also known as FOREX or FX Trading. We also spotlight a community service program for students at North Carolina A&T State University. Through their participation in the program, NC A&T students will learn to recognize the warning signs of potential investment fraud as well as the psychological pressure tactics employed by con artists. They will then take what they have learned back to their home communities, thereby helping to reduce the incidence of investment fraud. Also included in this issue is a notice to registered broker-dealers to be mindful of their legal responsibilities under the North Carolina Securities Act when approached by life settlement providers to sell private placements of securities based on life insurance policies. We also report on the Securities Division's participation in several events during Military Saves Week, our recent enforcement actions and an updated calendar of upcoming events.
December 2009 Newsletter
In this issue, Secretary Marshall calls on Congress to enact financial services reforms that treat all investors with the highest standard of care no matter who is recommending an investment to them. Also featured is an article on affinity fraud, or fraud that is aimed at a group of people who share common characteristics. Also included is a recent administrative action against Mason Barnes, Bradley Kirk Turner and Kentucky Mountain View Petroleum. Finally, we've added a new feature: a calendar of upcoming events.
November 2009 Newsletter
This issue provides an update on the "Free Lunch Monitor Program" jointly sponsored by AARP and the North American Securities Administrators Association (NASAA) and discusses annuities, one of the products frequently promoted at the free lunch seminars. It also includes the notice that Barbara Bennett, the Securities Division's Investor Education Specialist, has been chosen to serve as a member of NASAA's newly-created Women in Transition Outreach Project Group. Information is also provided about the settlement in principle reached between state securities regulators and Wells Fargo Investments, LLC, on the return of approximately $1.3 billion to the firm's clients who had invested in auction rate securities (ARS). Finally, in a case that was first uncovered by the North Carolina Securities Division, a federal jury in South Carolina recently convicted three men, collectively known as the Three Hebrew Boys, for running an $82 million Ponzi scheme that involved over 7,000 investors world-wide, many of whom were members of the Armed Services who either are or have been stationed in North Carolina.