Utah Division of Securities

Utah Division of Securities

Leigh Davis-SchmidtSecurities Examiner

Utah Division of Securities

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 Mission:

Utah Division of Securities

• Register Securities

• License Investment Professionals

• Conduct Compliance Examinations

• Educate Investors

• Investigate Investor Complaints

• Enforce State Securities Laws

How Do We Accomplish This?

Utah Division of Securities

Top 10 Ways to Lose Your Money

Utah Division of Securities

1. Ponzi Schemes2. Unlicensed Individuals Selling Securities3. Unregistered Investment Products4. Promissory Notes5. SENIOR INVESTMENT FRAUD6. High-Yield Investment Schemes7. Internet Fraud8. Affinity Fraud9. Variable Annuity Sales Practices10. 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

• Use Introductory Seminars

• Offer Free Meal

• “Probe, Then Disturb, Then Enhance The Problem”

Annuity University

Wall Street Journal July 2, 2002

Utah Division of Securities

• “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 nursing-home 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”

Annuity University

Wall Street Journal July 2, 2002

Utah Division of Securities

Utah Division of Securities

Source mass mailing sent to Maryland life agents

To age 99

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

Investor’s Name

10% Per AnnumForeign Currency

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

IMF Sponsored

High Yield Investment Program

Not A Solicitation

$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 Securities1-800-721-SAFE (7233)

(801) 530-6600www.securities.utah.gov