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Leigh Davis-Schmidt Securities Examiner

Leigh Davis-Schmidt Securities Examiner. Utah Division of Securities Mission:.

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Leigh Davis-Schmidt Securities Examiner

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  1. Leigh Davis-Schmidt Securities Examiner

  2. Utah Division of Securities Mission: 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.

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

  4. Top 10 Ways to Lose Your Money

  5. 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

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

  7. 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 Ponzi Schemes

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

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

  10. Investor’sName

  11. 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. Promissory Notes

  12. 10% Per Annum ForeignCurrency Investor’s Name

  13. 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 & Brochures – Senior Times Senior Investment Fraud

  14. 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” High-Yield Investment Schemes

  15. Not A Solicitation IMF Sponsored High Yield Investment Program $600 Billion In 10 Days

  16. 665% In 12 Months Secret Currency Beyond Reach of Government Used By World’s Wealthy

  17. 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 Internet Fraud

  18. “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: TooeleCommunity Affinity Fraud

  19. 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 Variable Annuity Sales Practices

  20. Annuity University • Use Introductory Seminars • Offer Free Meal • “Probe, Then Disturb, Then Enhance The Problem” Wall Street Journal July 2, 2002

  21. Annuity University • “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” Wall Street Journal July 2, 2002

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

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

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

  25. So, What Can You Do?

  26. 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

  27. 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

  28. REMEMBER: Investigate EVERYTHING Before You Invest

  29. Utah Division of Securities1-800-721-SAFE (7233)(801) 530-6600www.securities.utah.gov

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