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Connie Lawson, Indiana Secretary of State Securities Commissioner, Carol Mihalik

Explore the oversight and regulations of securities in Indiana, covering licensing, cybersecurity, investor alerts, and succession planning. Learn about recent changes like crowdfunding and state-specific exemptions allowing greater access for investors.

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Connie Lawson, Indiana Secretary of State Securities Commissioner, Carol Mihalik

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  1. Connie Lawson, Indiana Secretary of State Securities Commissioner, Carol Mihalik

  2. In the balance… Investor Protection, Entrepreneurship, and Emerging Issues

  3. The Secretary of State; Elections Division, Business Services Division, Dealer Division and the Securities Division • The Securities Commissioner appointed by the Secretary of State • The Securities Division is tasked with investor protection and maintaining integrity in the marketplace • The attorneys and investigators are police officers A Review of the Basics

  4. All securities products sold in Indiana must be registered with us unless there is an exemption. (Notes, stocks, bonds, investment contracts, etc.) • Anyone who directly or indirectly offers or sells a security must be licensed Licensing and Registration

  5. Cybersecurity Clients with Diminished Capacity Succession Planning Fiduciary Accountability Emerging Issues

  6. Investor Alerts Survey responses Cybersecurity

  7. NASAA Model Rule Indiana Guidance only Elements Succession Planning

  8. Diminished Capacity Privacy POA Asessment Protections APS Protecting investors and brokers

  9. Fiduciary roles

  10. What’s new and creative in securities and capital formation… Crowd ‘vesting’ Internet Solicitation

  11. CROWD CAPITAL A look at two State and Federal changes in offering securities and raising funds

  12. Anyone can buy public stock (Schwab, E-Trade, broker) Privatenon publically traded offers have been limited to accredited investors that you know

  13. The JOBS Act: Equity Crowdfunding (passed July 1, 2012) SEA 375 Crowdfunding, Invest in Indiana Exemption ( Our state’s response ) effective July 1, 2014 Emerging laws and rules

  14. 506 (c) now allows for general solicitation to accredited investors using the internet JOBS Act Title II

  15. Realty Shares – Buildings https://www.realtyshares.com/ Mainstreet – Assisted living, nursing homes http://www.mainstreetinvestment.com/ OurCrowd –Israeli investment opportunities https://www.ourcrowd.com Fundrise – the World Trade Center https://www.fundrise.com/ Websites in the news

  16. As Federal crowdfunding not yet operational States sought their own solutions. Ours is Invest in Indiana Crowdfund ExemptionInd. Code § 23-19-2-2(27)

  17. Offer and purchase must arise out of and take place in Indiana among Indiana residents Indiana Presence

  18. Flat fee Subject to audit Scrutiny of offeror and the issue Money to escrow service company Communications portal Record keeping The Indiana Internet Website Operator

  19. An issuer can obtain up to $1,000,000.00 through this mechanism without audited financials; $2,000,000.00 with the prior years audited financials being made available to investor and Commissioner. A non accredited investor may invest up to $5,000.00 per offer. An accredited investor has no limit Caps

  20. The Indiana non-accredited investor now has access to certain exempt private offerings via the internet. The Indiana business now has a new source of capital at $5,000.00 per investor.

  21. ENFORCEMENT

  22. What is a security? Someone promises to do something with your money while you sit back and await the expected returns. One word helps; Passivity

  23. Criminal– with referral to County Prosecutor Unlicensed broker Unregistered product Material misrepresentation Enhanced Level 4 penalty for > age 60 or affinity fraud Administrative Adjudications Ability to impose consequences “in house” Civil– OAG serves as counsel Fraud and receiverships Personal cause of action/ Victim personal counsel How do we deal with bad actors?

  24. They usually start like this…Marcus Schrenker of Hamilton County

  25. If the issuer, in the offer or sale of the securities, makes an untrue statement of a material fact or omits to state a material fact required to be stated or necessary in order to make the statements … not misleading, In other words… “had they told me the truth (i.e. not registered, how they would really use my money, etc.) about XYZ, I would not have invested” Material Misrepresentation / FRAUD

  26. Creative real estate … Charles Blackwelder, Hamilton CountySentencing April 2, 2015

  27. But end like this…Vaughn Reeves of Sullivan County

  28. A failed or money losing business does not mean laws have been violated

  29. To learn more about the office visit the SOS Website sos@sos.in.gov Or call 317-232-6532 Securities Division 317-232-6681 Securities Fraud Report Hotline 800-223-8791 Fax Number 317-233-3675 camihalik@sos.in.gov 317 232 0735 Indiana Secretary of State Connie Lawson Thank you!!

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