Trends and Priorities T OM B RADY Director, Utah Division of Securities www.securities.utah.gov 801-530-6600
Mission 1.Create a level playing field in the industry 2.Ensure minimum standards of competence, training, and fair dealing 3.Protect and educate Utah investors
Busy Year
Questions We’re Asked
#1- What gives you the right?! Utah C Code 6 61-1-19. Investigati tions auth thorized. (1)(a) The division may make any public or private investigations within or without this state as the division considers necessary to determine whether a person has violated, is violating, or is about to violate this chapter or a rule or order issued under this chapter.
#2- Why should my client cooperate? Utah C Code 6 61-1-31. Determining a amount o of fine. For the purpose of determining the amount of a fine imposed under this chapter, the commission or court shall consider the following factors: (3)(a) the cooperation by the person in any inquiry conducted by the division concerning the violation.
#3- Can you recommend a good securities attorney? No No
#4- Can you help get my client’s money back? May aybe
#5- Do I need a securities license to help someone transfer funds from a security to something that is not a security? Yes, if you a are (a) advi vising (b) in t the business • of advi vising and (c) b being compensated. SEC Relea ease e IA-109 1092 •
#6- Blockchain?
Statistics and Trends New C w Complaints 250 225 200 164 150 173 110 100 109 124 91 50 0 FY2009-FY2012 average FY2013 FY2014 FY2015 Complaints FY2016 FY2017 FY2018
Statistics and Trends New I Investigations 70 62 60 50 51 44 57 40 39 48 30 33 20 10 0 FY2009-FY2012 average FY2013 FY2014 FY2015 Complaints FY2016 FY2017 FY2018
Statistics and Trends Restitution $1,157,254 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $36,640 $0 Imposed Collected
Top op P Prod oducts/ ts/Sch chemes from 2018 2018
#1 #1 Promisso ssory N Not otes That’s a as g good as money , y , Sir. T Thos ose are I e IOU OU’s. 74% o 74% of state s sec ecuriti ties fraud i inves estigations invol olve n e notes es. (“Lo (“Loans”)
Prom omiss ssor ory Not ote Sc Schemes
Utah F Firm F Faces $6M s $6M SEC Fraud Suit t for Ha Harleys, L Linger erie, Vap aping
#2 #2 Oil a and G Gas V Ventu tures
#3 #3
What i t is a a Pon onzi Sc Scheme ? Paying back old investors with Paying back old investors with new i investor funds Little or no legitimate business Little or no legitimate business revenue Pressure to roll money over and Pressure to roll money over and in invest it it
Ponzi S Schem eme Red F Flags High r h ret etur urn w n with l h little o e or no risk Overly c consisten ent r ret etur urns ns Unregister ered i ed inves estmen ents Unl Unlicensed ed s sel eller er Secret etive a e and/ d/or c complex Problem ems w with p h pape perwork Difficul culty r receiving ng p paymen ents Utah r rare c e coin dealer er a accused sed of r runni unning mul ultimillion- dollar P Ponzi nzi schem heme
#4 #4 Will Sho hock Y You ou…
Af Affini nity F Fraud ud Check ck b before y you invest Nothi hing ng is g guaranteed eed High r h ret etur urns c ns carry h high r h risk Get it i in w wri ritin ing Don’t n’t be be pr pressu ssured ed
#5 S #5 Stock cks
Flavors of s of t the he M Mon onth th
What i is Cryptocu ocurren ency cy? o Digital a l assets ts o Form of of a vi virtual c l coi oin or or token o Exi xist o only o on the inter ernet
ed Inve vest stments Marijuan ana-Rel elated
Preci cious M s Metal als Red F Flags Prop oprietary p prod oducts t to o con onvert rt i into o precious m us met etals Secret et m mining ng o operations ns Will s stor ore t the m metal f for or you ou “Safe i inves estmen ent” ev even g n gold h has r risks.
Top P Produc uct Us Used t d to Expl ploit S Seni niors?
An Annuiti ties Not for everyone Not for everyone Make sure they are suitable for Make sure they are suitable for your f financial n needs Regulated by Utah Insurance Regulated by Utah Insurance Department
Even these tips are not “guaranteed”
Industry Thoughts
Why Women? Live longer Providers Teachers Care givers
Cybersecurity
Cybersecurity Grace period is over Not just a best practice Stronger enforcement
Stay in your lane Sell what you’re licensed to sell Do your due diligence Caveat Venditor
ABC’s Advising Business of investments Compensation
Titles Matter Accurate titles Legitimate acronyms Avoid confusion
Titles Matter Accurate titles Legitimate acronyms Avoid confusion
T HANK Y OU T OM B RADY Director, Utah Division of Securities www.securities.utah.gov 801-530-6600
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