Articles Tagged with NASAA

Chicago-based Stoltmann Law Offices represents investors who’ve suffered losses from investing in unregistered securities based on the recommendation of their financial advisor.  All too often, brokers pitch investors on making a quick profit on unregistered securities. These investments, typically not on the radar screen of regulators, can easily lose money. They can skirt the safeguards of state and federal securities laws.

A group of securities regulators recently launched a crack-down on a company marketing unregistered securities. The North American Securities Administrators Association (NASAA) and the U.S. Securities and Exchange Commission (SEC) jointly announced a “$100 million settlement with BlockFi Lending, LLC (BlockFi) concerning its lending products and practices. Thirty-two state securities regulators have agreed to the terms of a settlement with BlockFi to resolve its past unregistered activities. More jurisdictions are expected to follow.”

The settlement focused on BlockFi’s sales of unregistered securities to retail investors through BlockFi interest accounts (BIAs).  “BlockFi promoted its BIAs with promises of high returns for investors who purchased the products. The company took control of and pooled its investors’ loaned digital assets, and exercised sole discretion over the pooled digital assets, including how to use those assets to generate a return and pay investors the promised interest.”

Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses from fraudulent investments scams for over fifteen years.  Recently, common scams involve precious metals and the latest craze, cryptocurrency. When the price of any commodity goes up dramatically – from gold to digital cryptocurrencies – you can bank on the fact that scammers are pitching hard to lure investors into a trap. Many investments pitched on the internet fall into this murky pool.

The top threats to investors, not surprisingly, are Internet- and social-media based promotions, according to the North American Securities Administrators Association (NASAA), a securities regulator trade association. These frauds are often pitched to owners of self-directed Individual Retirement Accounts (IRAs), many of which are tied to brokerage services.

“Self-directed individual retirement accounts, which lack the services and protection of traditional IRAs, can be fertile soil for scammers, especially those involving cryptocurrency-related and precious metals-based investments,” Investment News reported.

This week, the North American Securities Administrators Association released its enforcement statistics on state regulators. The state regulators last year brought more cases against registered financial advisers than against unregistered entities. From 2015, the report stated that 812 registered advisers were named as respondents in cases, while only 791 unregistered individuals and firms were named as respondents. The states ordered $538 million in restitution to investors and levied $230 million in penalties and fines. They made respondents pay $18 million in court costs and contribute $11 million to investor education initiatives. Enforcement actions resulted collectively in 1,200 years of incarceration, probation and deferred adjudication. 250 adviser licenses were revoked and 475 were denied, while 2,990 registrations were withdrawn.

At the center of most of these investigations were real estate products and oil and gas investment programs. Others included variable and fixed-indexed annuities, hedge funds, life settlements/viaticals and structured products. The most popular victims were the elderly, with one-third of state investigations involving that group. Vulnerable adults were disproportionately targeted by fraudsters.

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