Invest fraud UT Div of Securities


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Leigh Davis-Schmidt Securities 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:

How Do We Accomplish This?: 

Register Securities License Investment Professionals Conduct Compliance Examinations Educate Investors Investigate Investor Complaints Enforce State Securities Laws Administrative andamp; Civil Actions Criminal Filings How Do We Accomplish This?


Top 10 Ways to Lose Your Money


Ponzi Schemes Unlicensed Individuals Selling Securities Unregistered Investment Products Promissory Notes Senior Investment Fraud High-Yield Investment Schemes Internet Fraud Affinity Fraud Variable Annuity Sales Practices Unscrupulous Brokers

Why Is This Important To You?: 

Why Is This Important To You? EVERYONE IS A TARGET!

Ponzi Schemes: 

Ponzi Schemes Promise High Rates of Return, Little or No Risk Use Money From New Investors to Pay Earlier Investors Typically No Legitimate Business Revenue Example: 12 Daily Pro

Unlicensed Individuals: 

Unlicensed Individuals Lured by High Commissions Anyone Selling Securities Must Be Licensed - No License, No Sale

Unregistered Investment Products: 

Unregistered Investment Products Bypass Stringent State Registration andamp; Disclosure Requirements Securities – Not Just Stocks andamp; Bonds Investment Contracts Promissory Notes Viatical Settlements Promise High Returns, Little or No Risk


Investor’s Name

Promissory Notes: 

Promissory Notes Typically Issued by Little Known or Non-Existent Companies Promise High Returns, Little or No Risk Insurance Agents Often Targeted to Promote These Notes Example: Beverly Hills Dev. Corp.


Investor’s Name 10% Per Annum Foreign Currency

Senior Investment Fraud: 

Senior Investment Fraud Often Claim to be 'Senior Specialists' Certified Elder Planning Specialists (The National Registry of Elder Planning Advisors) Senior Benefit Centers Network Senior Financial Survival Workshop Certified Senior Advisors Sundance Public Relations Ghost Written Books – Alligator Proofing Your Estate Newsletters andamp; Brochures – Senior Times

High-Yield Investment Schemes: 

High-Yield Investment Schemes Promise Double or Triple-Digit Returns Through Access to 'Risk Free Guaranteed High-Yield Instruments' Prime Bank Schemes Access to Investment Portfolios of the World’s Elite Banks 'Secret Off-Shore Trading Programs'


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

Internet Fraud: 

Internet Fraud E-mail, Web Sites, Instant Messaging, Chat Rooms (Hidden Identities) $122 Million in Losses in 2002 More Than 125,000 Victims and Over $100 Million in Losses in 2003 Very Little Money is Ever Recovered

Affinity Fraud: 

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

Variable Annuity Sales Practices: 

Variable Annuity Sales Practices High Surrender Charges Higher Costs than Alternative Investments Benefits Cost Extra Steep Sales Commission Paid to Agents Long-Term Investment (10 Years or More) May Be Unsuitable for Many Retirees


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


Unscrupulous Brokers: 

Unscrupulous Brokers Unsuitable Investment Recommendations Excessive Trading in Client Accounts Unauthorized Trading Guaranteeing Clients Against Loss Borrowing Money From Clients Example: Christofferson

Common Threads: 

Common Threads Promise of High Returns Promise of Little or No Risk Prey on Investors’ Trust Investors Don’t Ask Questions

Women-Specific Issues: 

Women-Specific Issues Flatter Factor Romantic Interest Too Trusting Afraid to Confront or Question Examples: Scharbach Simper Deussen

So, What Can You Do?: 

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!!! Report Misconduct, Fraud Or Abuse To The Division 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) 

Utah Division of Securities 1-800-721-SAFE (7233) (801) 530-6600

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