Download Utah Division of Securities Mission

Utah Division of Securities
Utah Division of Securities
Leigh Davis-Schmidt
Securities Examiner
Utah Division of Securities
Utah Division of Securities Mission:
The Securities Division enhances Utah’s business
climate by protecting Utah’s investors through
education, enforcement and fair regulation of
Utah’s investment industry while fostering
opportunities for capital formation.
Utah Division of Securities
How Do We Accomplish This?
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Register Securities
License Investment Professionals
Conduct Compliance Examinations
Educate Investors
Investigate Investor Complaints
Enforce State Securities Laws
Utah Division of Securities
Top 10 Ways to Lose Your Money
Utah Division of Securities
1. Ponzi Schemes
2. Unlicensed Individuals Selling Securities
3. Unregistered Investment Products
4. Promissory Notes
5. SENIOR INVESTMENT FRAUD
6. High-Yield Investment Schemes
7. Internet Fraud
8. Affinity Fraud
9. Variable Annuity Sales Practices
10. Oil and Gas Schemes
Utah Division of Securities
Why Is This Important To You?
EVERYONE IS A TARGET –
ESPECIALLY SENIORS!
Utah Division of Securities
Why Seniors Are Targeted
• Home To Answer The Phone Or The
Door
• May Have Substantial Assets (e.g.,
Home, Retirement & Other Savings
Accounts)
• Fear of Losing Financial Independence
Utah Division of Securities
Utah Division of Securities
Unsuitable Investments
• Not All Investments Are Appropriate For
All People
• Get A 2nd Opinion From Other Financial
Professionals
• Discuss With A Trusted Friend Or Relative
Utah Division of Securities
Phony “Experts”
• “Senior Specialists”
– Certified Elder Planning Specialists (The
National Registry of Elder Planning
Advisors)
– Certified Senior Advisors
– Senior Benefit Centers Network
– Senior Financial Survival Workshop
Utah Division of Securities
Annuity University
• Use Introductory
Seminars
• Offer Free Meal
• “Probe, Then
Disturb, Then
Enhance The
Problem”
Wall Street Journal July 2, 2002
Utah Division of Securities
Annuity University
• “You’re there to solve their problems, but you have to create
those problems first – No Problem, No Sale”
• “Tell them you can protect their life savings from nursinghome and Medicare seizure of assets. They don’t know what
that is, but it sounds scary…it’s about putting a pitchfork in
their chest.”
• “Show them their finances are all screwed up so that they
think Oh, no! I’ve done it all wrong – this will make you
money”
Wall Street Journal July 2, 2002
Utah Division of Securities
Utah Division of Securities
To age 99
Source mass mailing sent to Maryland life agents
Utah Division of Securities
Equity Index Annuity
Utah Division of Securities
Other Schemes
• Boiler-Room Brokers
– Cold Callers
– High Pressure Sales
• Promissory Notes
• Affinity Fraud
• Off-Shore Trading Programs, Bank
Debentures, Prime Bank Instruments
• Reload Scams
Utah Division of Securities
Typical Boiler Room
• Locked Doors
• 157,000 Telephone Calls
–50 Cold Callers
–Stratton Oakmont - 13,000 Calls Per
Month To Utah Citizens
• Scam People Located Out Of State
Utah Division of Securities
10% Per Annum
Foreign Currency
Investor’s Name
Utah Division of Securities
Affinity Fraud
• “I am also a member of (insert your
religious, ethnic, professional or
community-based organization)”
• Same “deal” was made with a
prominent leader of your organization
– “name dropping”
• Example: Tooele Community
Utah Division of Securities
Not A Solicitation
IMF Sponsored
High Yield
Investment Program
$600 Billion
In 10 Days
Utah Division of Securities
665%
In 12 Months
Secret Currency
Beyond Reach
of Government
Used By
World’s Wealthy
Utah Division of Securities
What Is A Reload Scam?
Once A Victim, Twice A Victim…
• “I promise, you’ll make your money back
if only you’ll invest in…”
• Promoter's Will Not Only Sell A Scam To
The Same Person Twice, They Share
Their List of “Suckers” With Other
Promoters
Utah Division of Securities
So, What Can You Do?
Utah Division of Securities
• Ask Questions – Be An Informed Investor
• Check Out Strangers Touting Strange Deals
• Watch Out For Salespeople Who
– Prey On Your Fears
– Try To Rush Your Decision
• Don’t Be Afraid To Hang Up The Phone
• Don’t Put All Of Your Eggs In One Basket
• Monitor Your Investments - Always Stay In
Charge Of Your Money
Utah Division of Securities
• Get Everything In Writing And Keep A Copy
Of All Documents
• Risk No More Than You Can Afford To Lose
• If You Don’t Understand The Investment Avoid It!!!
• Read And Understand Everything You Sign
• Don’t Let Fear or Embarrassment Keep You
From Reporting Fraud Or Abuse
• Pass This Information On To Your Family,
Your Friends, And Others
Utah Division of Securities
REMEMBER:
Investigate EVERYTHING
Before You Invest
Utah Division of Securities
Utah Division of Securities
1-800-721-SAFE (7233)
(801) 530-6600
www.securities.utah.gov