Archive for the ‘Office of Securities’ Category

In Highlighting Elder Abuse Awareness Day, State Officials Urge Mainers to Report Suspected Cases of Financial Exploitation

PRESS RELEASE
June 13, 2017
Contact:  Judith Shaw
Administrator Maine Office of Securities
1-877-624-8551
TTY:  Maine Relay 711

June 15th Observance Draws Attention to under-reported ‘Crime of the 21st Century’, and the Need for People to Report Concerns about Abuse of Seniors

AUGUSTA Officials at Maine’s Department of Professional and Financial Regulation (DPFR) are focusing attention on World Elder Abuse Awareness Day–recognized each June 15th throughout the United States and in other countries, and often referred to as the ‘crime of the 21st century,’ because of its increasing prevalence and devastating impacts.

“The abuse of seniors is among the most under-reported crimes, and its impact can have devastating consequences for its victims,” DPFR Commissioner Anne Head said.  “Unfortunately, the perpetrator is often a relative or caregiver, making it more difficult for the senior to come forward.  Each of us has a responsibility to report concerns about potential abuse.”

Commissioner Head noted that financial abuse is among the most common forms of elder abuse, costing its U.S. victims an estimated $2.9 billion a year.

The Commissioner highlighted the Department’s five agencies, all of which are dedicated to educating the public and helping the victims of financial abuse.  She pointed out the Downeaster Guide to Elder Financial Protection available through the Department’s Bureau of Consumer Credit Protection by calling 1-800-332-8529 or at www.Credit.Maine.gov under “Publications”.  She also highlighted the many resources available through the Bureau of Financial Institution’s online Consumer Library (www.maine.gov/pfr/financialinstitutions).

Maine Securities Administrator Judith Shaw, who serves on the Maine Council on Elder Abuse Prevention, noted the frequency of investment fraud and the importance of reporting suspected cases.  “Of special concern, is investment fraud of seniors,” Administrator Shaw said.  “Victims can lose their entire life-savings, with little opportunity to recover financial stability.”  For investment-related questions or concerns, the Office of Securities within the Department of Professional and Financial Regulation can be reached at 1-877-624-8551 and at www.investors.maine.gov.

Signs that an older adult may be vulnerable to possible abuse or exploitation may include:

  • Social isolation and/or recent loss of a spouse or partner
  • Recent decline in health or in the ability for self-care
  • Lack of familiarity with financial accounts
  • Dependence on another to provide everyday care or essential services
  • Willingness to listen to telemarketing calls or respond to solicitations from unverified charities or businesses

Red flags of possible victimization include:

  • Senior has injuries that are not adequately explained
  • Change in appearance or poor hygiene
  • Senior is missing checks, account statements or documentation regarding finances
  • Running out of money at the end of the month
  • Senior appears fearful or depressed
  • Senior is accompanied by a caregiver who is overly protective or dominating

Partial List of State Agencies and Organizations in Maine providing information, services and education on elder abuse, including financial exploitation: 

Maine Office of Aging and Disability Services:

www.maine.gov/dhhs/oads

1-800-262-2232 or 207-287-9200

Adult Protective Services:

www.maine.gov/dhhs/oads/aging/aps/

Hotline: 1-800-624-8404

Legal Services for the Elderly:

www.mainelse.org

1-800-750-5353 

Maine Area Agencies on Aging:

List of regional agencies with full contact information:

www.maine.gov/dhhs/oes/resource/aaa.htm

Maine Department of Professional and Financial Regulation:

(Five Agencies Offering a Wide Range of Assistance to Seniors and Caregivers)

www.maine.gov/pfr

Office of Securities:  1-877-624-8551

(Investment Questions or Concerns)

www.investors.maine.gov

Bureau of Financial Institutions:  1-800-965-5235

(Banking Questions or Concerns)

www.maine.gov/pfr/financialinstitutions

Bureau of Consumer Credit Protection:  1-800-332-8529

(Credit, Foreclosure, General Financial Scam Concerns)

www.maine.gov/pfr/consumercredit

Bureau of Insurance:  1-800-300-5000

(Insurance-related Questions or Concerns)

www.maine.gov/pfr/insurance

Office of Professional and Occupational Licensing: 207-624-8603

(Questions or Concerns Related to Licensed Professionals)

www.maine.gov/pfr/professionallicensing

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“No risk” investment schemes often prove to be scams

CONSUMER FORUM

Posted Jan. 04, 2016, at 8:08 a.m.

Maine’s securities administrator has some advice for would-be investors: steer clear of any offer promising “limited or no risk” and big returns.

Judith Shaw sent out a news release as the old year was drawing to a close, reminding consumers that education was their best defense. Shaw said red flag warnings should go up any time there’s an unsolicited offer of financial advice or investment possibilities.

Shaw also serves as president of the North American Securities Administrators Association. A survey of other members turned up five troubling themes.

Leading the list were unlicensed salespeople and unregistered products. Licensing requirements are in place to protect investors; crooks try to get around them by offering those quick returns at minimal risk.

A second danger zone involves promissory notes. These are usually offered by companies looking to raise capital; they’re best purchased by experienced or corporate investors who can thoroughly check out the company that’s making the offer. Inexperienced investors would do well to stay away from short-term notes, which may be offered to bypass rules stating that they be registered with the U.S. Securities and Exchange Commission and state regulators.

Oil and gas investments can be tricky. The deal might originate in one state with drilling in another; this can make visiting either a challenge. The Securities Administrators Association cautions that bogus offers are making the rounds as oil prices continue to fluctuate.

A fourth area that’s not for novice investors is real estate deals. Nontraded real estate investment trusts, brokered mortgage notes and re-sales of timeshares often carry high risk.

The fifth area — probably the worst — is the Ponzi scheme. Using the money from new investors to pay off old ones is always doomed to fail. And it’s never legal.

CNBC’s website has a longer list of sometimes shaky investment offers. Trading currencies sounds exotic but the complexities can spell trouble. Precious metals are touted by advertisers, but scammers know that buyers likely won’t visit the companies that supposedly store the gold bullion.

Sellers of “private placements,” or securities that are exempt from federal or state regulations, tout high returns but they may be telling tall tales. The Internet is loaded with offers for private placements; some are legitimate, while others are scams.

Speaking of the Internet, the SEC reminds consumers that financial advice of all kinds abounds in cyberspace. Read the commission’s advice about online investment newsletters at sec.gov/investor/pubs/cyberfraud.htm. And check out financial investors who are licensed to do business in Maine at maine.gov/pfr.

Finally, remember the old saw: If it sounds too good to be true, it is. That applies to offers from people you know as well as those you don’t; people who appear to be your friend may simply be after your money.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

 

Elder abuse costs $2.9 billion each year

CONSUMER FORUM

Posted June 14, 2015, at 11:44 a.m.

Click image for list of aging and disability services

You may have seen news reports noting that June 15 is Elder Abuse Awareness Day. It’s appropriate to focus this column on elder abuse because it is probably the most under-reported of all abuses of consumers.

So, this is a call to action. People who suspect that our older neighbors or friends are being abused need to speak up.

On top of the huge physical and emotional toll of abuse and neglect are the financial costs, estimated at $2.9 billion per year. Cases of investment fraud targeting seniors are well documented; still, Mainers are victimized almost daily.

“Victims can quickly see their entire life savings depleted with little opportunity to recover financial stability,” said Judith Shaw, Maine’s securities administrator. Shaw, who also co-chairs the Maine Council on Elder Abuse, added that such losses can lead to physical and emotional health problems.

Shaw attended last Thursday’s Scam Jam, an awareness event that drew more than 300 people in Augusta. Shaw was among the speakers, and she came away with a renewed conviction about fighting elder abuse: We are all in the fight together, and collaboration among groups seeking to end abuse is critical.

Shaw said part of the natural aging process is a decreasing ability to understand complex financial concepts. Scam artists prey on this fact and use sophisticated social engineering tricks to try to separate seniors from their funds.

In marking this day of awareness, Maine officials listed warning signs of possible abuse or exploitation:

— Social isolation, depression and/or recent loss of spouse or partner.

— Declining health and ability to provide one’s own care.

— Inability to deal with complicated finances.

— Dependence on others for basic care and services.

— Willingness to listen to telemarketers or respond to solicitations from unverified charities or businesses.

In proclaiming Elder Abuse Awareness Day, Gov. Paul LePage urged Mainers to report suspected abuse of older Mainers. The governor noted in his proclamation that abusers are often family members or caregivers.

“Each of us has a responsibility to speak up and report concerns about potential abuse,” LePage said.

That’s especially true when seniors may be too embarrassed or afraid to speak up for themselves.

Suspected abuse can be reported to Adult Protective Services (maine.gov/dhhs/oads/aging/aps) by calling 800-624-8404

Another key agency is the Maine Office of Aging and Disability Services (maine.gov/dhhs/oads), reachable by phone at 800-262-2232.

Legal Services for the Elderly (mainelse.org) can offer free legal help to socially and economically needy Mainers age 60 and over. Call the helpline at 800-750-5353. You can find links to Maine’s area agencies on aging at maine.gov/dhhs/oes/resource/aaa.htm.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

 

Who keeps track of whether financial advisers give good advice?

CONSUMER FORUM

By Russ Van Arsdale, executive director Northeast CONTACT
Posted Jan. 25, 2015, at 12:18 p.m.

We’ve all heard stories about people who lose money through bad investments.

Some put money into schemes advanced by friends or family members. Other people might get “tips” from a variety of sources that promise their advice will lead to a “sure thing.” Still others might overhear investment advice from a professional but misunderstand and invest unwisely.

Smart investing is critical when planning for retirement; that’s why many people turn to professionals for investment advice. However, not all advisers are created equal, just as not all investments are right for everyone who has money to invest.

Stockbrokers and some financial advisers are held to a “suitability” standard. They recommend investment products considered “suitable” for a given client. Another standard is termed “fiduciary,” meaning the adviser must act in what’s believed to be the client’s best financial interest.

A range of investment products might meet the suitability standard, with some returning more in fees to the adviser than others. It’s in the adviser’s interest to recommend a product that will earn the pro a higher fee; even if it’s not the best fit for the client, it’s still “suitable.”

Maine’s Department of Professional and Financial Regulation cautions investors that “brokers may recommend investments that appear suitable but may not be optimal for investors’ objectives.” The PFR website goes on to say, “Because of the manner in which they are compensated, it is possible for brokers to have incentives to sell financial products that may not entirely align with clients’ goals.”

With that bit of background, we come to a proposal by the U.S. Department of Labor to update rules governing financial advising. Current rules were written during the Ford administration. Since then, total investments in IRAs, 401(k) plans and other defined distribution plans have swelled and will reach $7.3 trillion by 2016. That’s an estimate by the Securities Industries and Financial Markets Association, or SIMFA, a trade group representing securities firms, banks and asset managers.

The Labor Department has for several years proposed changing the definition of fiduciary regulation; the department said recently it will withdraw its current proposal and issue a new one shortly. A coalition of consumer and labor groups is calling for rules requiring all financial advisers to put clients’ interests first when giving retirement advice. On its website, the coalition charges that the financial advising industry “wants to continue slicing off large pieces of that pie by selling retirement investments with hefty costs, poor returns, and high risks.”

SIMFA calls the last proposed rule “overbroad” and said it would “limit investment choices and drive up costs for the individuals it is intended to protect.”

SIMFA says 149 U.S. representatives and 34 senators have written to the Department of Labor and the Office of Management and Budget in opposition to the proposed regulation and the expected new proposal.

Meanwhile, the Financial Planning Association, Certified Financial Planner Board of Standard Inc. and National Association of Personal Financial Advisers are calling for certification of financial planners who operate “with fiduciary accountability and transparency.”

This coalition argues that the “title ‘financial planner’ should be recognized as distinct from sales persons – and held to corresponding competence and ethical standards similar to those required of a CPA, doctor or lawyer.”

When choosing a financial planner, ask “How will you be compensated? What are your qualifications? What is your general philosophy on investing? What kind of client turnover have you had in recent years?”

When asking for advice on investing your money, you want to feel comfortable with answers to those and related questions.

The state of Maine licenses broker-dealers and prosecutes violations of securities laws. Learn more at www.investors.maine.gov.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit NEContact.wordpress.com or email contacexdir@live.com.

 

Does your investment adviser offer ‘low-hanging fruit’ to cyber criminals?

CONSUMER FORUM

Posted Oct. 05, 2014, at 11:26 a.m.
The good news, said a JP Morgan Chase Bank official soon after it filed a regulatory report last week about a data breach, is that it appeared that no sensitive customer data had been compromised

The bad news was the breach lasted several months and affected 76 million households and 7 million small businesses. Gigabytes of data — names, addresses, phone numbers and email addresses — apparently were sucked out of the bank’s servers and likely were gathered at a data center somewhere in Russia, according to Bloomberg News.

JP Morgan Chase is this country’s largest bank. You might think that cyber thieves direct all their efforts at the big guys. You might be wrong.

Smaller investment companies may not be very concerned about cybersecurity, perhaps thinking that they are too small for crooks to bother with. One industry observer says that portion of the finance industry could amount to so much “low-hanging fruit” for cyber criminals.

The North American Securities Administrators Association recently ran a pilot study of nine states, including Maine. The study looked at 440 registered investment advisers that manage assets of less than $100 million.

Of those small and medium-sized firms, 4.1 percent reported having experienced a data breach. Some 1.1 percent reported having “theft, loss, unauthorized exposure, or unauthorized use of or access to confidential information.”

Critics say those numbers don’t tell the whole story. Smaller firms with less than state-of-the-art cybersecurity may not know whether their systems have been breached, let alone whether any data have been lost. The survey also showed that more than one-third of the responding firms did not test for threats or security gaps; more than 60 percent don’t have training programs, policies or procedures to detect unauthorized access to data.

The record is better in Maine than in some other states in the survey, according to Judith M. Shaw, Maine’s securities administrator. Shaw said the survey is giving regulators a baseline from which to formulate policies that will help the investment industry as a whole.

“I couldn’t tell you that we have those best practices and policies in place now,” Shaw said. But she added that her staff members visit investment firms large and small and make suggestions when they find security issues that need addressing.

“And they implement our recommendations right away,” Shaw added.

In other states, owners of some investment firms say they don’t manage money, only offer advice; for that reason, they may feel that cybersecurity is less of an issue for them. Shaw says investment firms in Maine “are very attuned to the fact that, whether they are handling assets or not, they need to be vigilant.”

Shaw says consumers should ask the investment pros who handle their money some hard questions, such as these:

— Are you using systems that are protected appropriately?

— What do you do to protect the data that you have?

— Are there appropriate layers of verification for those accessing data?

Shaw says people may hesitate to ask tough questions of people they consider professionals. However, she says these types of questions need to be asked and answered.

The NASAA plans to continue the study with an eye toward recommending practices to improve security. To that end it expects to “engage in additional conversation with industry.”

For more information, visit the Maine Office of Securities website http://www.maine.gov/pfr/securities/index.shtml or call (207) 624-8551.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer, ME 04412, visit https://necontact.wordpress.com or email contacexdir@live.com.

 

Department of Professional and Financial Regulation Encourages Seniors and Caregivers to Utilize State Resources to Protect Against Elder Abuse and to Report Suspected Cases

‘Crime of the 21st Century’ under-reported, causing untold pain & suffering and costing an estimated $2.9 billion nationally each year

GARDINER – Calling elder abuse one of the most under-reported and fasting growing crimes of the 21st century, Commissioner Anne L. Head and other officials with Maine’s Department of Professional and Financial Regulation (DPFR) joined Governor Paul R. LePage in highlighting the June 15th observance of World Elder Abuse Awareness Day by urging seniors and caregivers to utilize state agency resources to protect themselves, and encouraging them to report cases of suspected abuse.

Officials are also highlighting an effort by the Maine Council on Elder Abuse Prevention, which is encouraging businesses and nonprofits to post “No Excuse for Elder Abuse: World Elder Abuse Day, June 15th” on their signage.

“Financial abuse, which includes investment fraud and exploitation, is among the most common forms of elder abuse, costing its victims an estimated $2.9 billion a year,” Commissioner Head said. “Because these crimes are often committed by caregivers, family members or trusted financial advisers, they go unreported in too many cases.”

Maine’s Office of Securities, an agency within DPFR, emphasizes that investment scams targeting seniors are increasingly prevalent and particularly troubling. Securities Administrator Judith Shaw, who co-chairs the Maine Council on Elder Abuse Prevention, noted the importance of reporting suspected cases. “Maine’s Office of Securities is committed to fighting elder financial exploitation, but our efforts are much more successful when people come forward to report their concerns.”

Administrator Shaw noted that the Office recently concluded a case in which a former New Hampshire stockbroker took nearly $200,000 from a senior couple in Aroostook County as part of an investment scheme. The perpetrator was sentenced to time in prison and ordered to pay restitution to the victims. “This case illustrates that strong action can be taken when problems are brought to light,” Shaw said. “Unfortunately, too few people speak up or they come forward after their life-savings has been depleted.”

Commissioner Head and Administrator Shaw encourage seniors and those who care for them to contact the Department for answers to questions or to obtain resources. The Office of Securities offers educational materials and personal assistance to consumers regarding safe investing and investment professionals by calling 1-877-624-8551. Information is also available at http://www.investors.maine.gov.

Additionally, the Downeaster Guide to Elder Financial Protection can be obtained from the Department’s Bureau of Consumer Credit Protection. The 32-page publication is free of charge to Maine residents by calling 1-800-332-8529 (1-800-DEBT-LAW). It can also be found at http://www.Credit.Maine.gov under “Publications”. The Department’s Bureau of Financial Institution offers a comprehensive online Consumer Library (www.maine.gov/pfr/financialinstitutions) with many resources of interest to seniors.

A partial list of State agencies and organizations in Maine providing information, services and education on elder abuse, including financial exploitation, accompanies this release

 ###

 

Partial List of State Agencies and Organizations in Maine providing information, services and education on elder abuse, including financial exploitation:

Maine Office of Aging and Disability Services: www.maine.gov/dhhs/oads

1-800-262-2232 or 207-287-9200

*****

 Maine Adult Protective Services: www.maine.gov/dhhs/oes/aps

Hotline: 1-800-624-8404

*****

Maine Department of Professional and Financial Regulation:

(Five Agencies Offering a Wide Range of Assistance to Seniors and Caregivers) www.maine.gov/pfr

*****

Office of Securities: 1-877-624-8551

(Investment Questions of Concerns) www.investors.maine.gov

*****

Bureau of Financial Institutions: 1-800-965-5235

(Banking Questions or Concerns) www.maine.gov/pfr/financialinstitutions

*****

Bureau of Consumer Credit Protection: 1-800-332-8529

(Credit, Foreclosure, General Financial Scam Concerns) www.maine.gov/pfr/consumercredit

*****

Bureau of Insurance: 1-800-300-5000

(Insurance-related Questions or Concerns) www.maine.gov/pfr/insurance

*****

Office of Professional and Occupational Regulation: 624-8603

(Questions or Concerns Related to Licensed Professionals) www.maine.gov/pfr/professionallicensing

*****

Maine Area Agencies on Aging:

List of regional agencies with full contact information: http://www.maine.gov/dhhs/oes/resource/aaa.htm

*****

Legal Services for the Elderly: www.mainelse.org

1-800-750-5353

 

Maine Office of Securities Issues Investor Advisory on Private Placement Offerings

GARDINER – In advance of a federal rule to allow advertising of high-risk and potentially fraudulent private placement offerings, Maine Securities Administrator Judy Shaw issued an advisory today informing investors about the risks associated with these offerings.  The advisory is available at www.maine.gov/pfr/securities/Private_Placements_Maine.pdf.

Private placement offerings allow companies to raise money by selling stocks, bonds, and other instruments; however, these offerings may be exempt from federal securities registration requirements.  As a result, this exemption permits the raising of capital without having to comply with disclosure and consumer protection requirements that apply to public securities offerings. 

Because exempt private placement offerings are not reviewed by regulators, they have become a haven for fraud.  According to the most recent statistics from the North American Securities Administrators Association, private placement offerings are the most frequent source of enforcement cases conducted by state securities officials.

“The registration exemption has been used by legitimate small businesses as an important source of capital, and state securities regulators want those businesses to thrive and create jobs without unnecessary regulatory impediments,” said Governor Paul R. LePage.  “However, a healthy private placement marketplace requires informed investors who feel adequately protected.”

Currently, the exemption available under the Securities Act of 1933 does not permit general solicitation or advertising of private placement offerings.  The JOBS Act of 2012 directed the Securities and Exchange Commission (SEC) to lift this ban, as long as sales are limited to “accredited” investors–people who have sufficient wealth or access to information that would presumably allow them to make fully informed investment decisions.  The SEC is finalizing its proposed rule.

“Unscrupulous promoters may take advantage of these new rules, as they will now be allowed to offer securities through direct mail, cold calls, free lunch seminars and television or radio commercials,” said Securities Administrator Shaw.  “The Office of Securities is taking steps to help Maine investors avoid being lured into high-risk or fraudulent investments when the ban on general solicitation of private placement offerings is lifted.” 

Shaw noted that the Office’s advisory includes information on the risks associated with private placement offerings and tips on how to protect yourself when considering such an offering.   More information about the risks associated with private placement offerings is available by contacting Office of Securities toll-free in Maine (877) 624-8551 or (207) 624-8551.

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