Leigh Davis-Schmidt Securities Examiner

Utah Division of Securities


Leigh Davis-SchmidtSecurities Examiner


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:


• Register Securities

• License Investment Professionals

• Conduct Compliance Examinations

• Educate Investors

• Investigate Investor Complaints

• Enforce State Securities Laws

How Do We Accomplish This?


Top 10 Ways to Lose Your Money


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


Why Is This Important To You?

EVERYONE IS A TARGET – ESPECIALLY SENIORS!


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


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


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


• Use Introductory Seminars

• Offer Free Meal

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

Annuity University

Wall Street Journal July 2, 2002


• “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


Source mass mailing sent to Maryland life agents

To age 99


Equity Index Annuity


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


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


Investor’s Name

10% Per AnnumForeign Currency


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


IMF Sponsored

High Yield Investment Program

Not A Solicitation

$600 Billion In 10 Days


665% In 12 Months

Secret Currency

Beyond Reach of Government

Used By World’s Wealthy


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


So, What Can You Do?


• 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


• 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


REMEMBER:

Investigate EVERYTHING

Before You Invest


Utah Division of Securities1-800-721-SAFE (7233)

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

Leigh Davis-Schmidt Securities Examiner

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