Posts Tagged ‘investments’

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

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.


Free Conference on Wise and Safe Investing Brings State and Federal Experts to York County

Maine Office of Securities Encourages Investors and Potential Investors to Register for Free Event – Including Practical Advice & Lunch

GARDINER, MAINE – Maine’s Office of Securities will host a free “Wise and Safe Investing Conference” on Friday, September 16th, from 8:30 a.m. – 12:30 p.m. at Village by the Sea Conference Center in Wells. Securities Administrator Judy Shaw is encouraging investors, particularly seniors and those approaching their retirement years, to register today by calling 1-877-926-8300.

This free investor protection event is part of the Department of Professional and Financial Regulation’s ongoing effort to provide information, resources and assistance to senior consumers and their advocates. The conference is part of a national investor protection initiative, “The Campaign for Wise and Safe Investing,” and funded by a grant from the non-profit Investor Protection Trust. The AARP Foundation is co-sponsoring the event and the Maine chapter of AARP is coordinating registration.

The Wise and Safe Investing Conference will feature federal and state experts from the U.S. Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), the AARP Foundation, and the Maine Office of Securities.

Panelists will provide practical advice on how to safeguard investments, avoid financial scams and identify unethical practices. In addition to the planned program, ample time will be available to address questions from attendees on other issues related to the securities industry, including how the current volatility in the national securities markets may affect small investors.

Registration for the conference is free and open to the public, but advance registration is required to confirm a seat. To register, call AARP/Maine toll-free at 1-877-926-8300. More information about the Wise and Safe Investing Conference is also available by contacting the Maine Office of Securities at 1-877-624-8551 or by visiting

The Office of Securities is part of the Maine Department of Professional and Financial Regulation.  It regulates the securities industry in Maine through a variety of activities, including licensing broker dealers and investment advisers; reviewing registration statements and exemption filings; investigating and prosecuting violations of the securities laws; conducting on-site compliance examinations of broker-dealers and investment advisers; and conducting investor education outreach programs.

Maine’s Office of Securities Takes Action Against the Unlicensed Sale of Unregistered Investment Products

GARDINER, MAINE — Securities Administrator Judy Shaw has announced that Maine’s Office of Securities is actively pursuing cases in which unlicensed individuals offer investment products, as well as cases in which licensed professionals sell products that are not registered in the State. In highlighting her agency’s commitment to protecting the public from unauthorized investment sales practices and financial scams, Administrator Shaw pointed to a recently concluded case.

Shaw announced that a Consent Order has been executed against the unlicensed sales of an unregistered investment product by Jesse Bean of Calais. The product was a one-year promissory note offered by Genesis Fulfillment Management, LLC. Mr. Bean violated Maine securities law (Title 32, §§ 16401 and 16402) when he acted as an unlicensed broker-dealer or unlicensed agent of a broker-dealer when he offered and sold the Genesis promissory note to a Maine resident.

To fund the purchase of the Genesis promissory note, Bean convinced the 78 year old Maine resident to surrender a Bankers Life and Casualty Equity Indexed Annuity (“Bankers Life EIA”) that Bean had sold to the Maine resident for $51,530.66 approximately one year earlier. In surrendering the annuity, the Maine resident was assessed a charge of 10% of the value of the annuity, or $5,039.29.

Bean recommended to the Maine resident that he invest in the Genesis promissory note despite the surrender charge because (a) he would recover the surrender charge within one year , and (b) he would make significantly more money overall if his funds were invested in the Genesis promissory note rather than the Bankers Life EIA.

At no time was the Genesis promissory note registered in Maine. The value of the property purchased by Genesis using the Maine resident’s money was not worth more than the money provided by the resident, as had been represented, nor was it fully collateralized. Contrary to the representation made to the Maine resident that his funds would pay only 70% of the purchase price of the property, closing documents show that the Maine resident’s funds covered 100% of the cost to purchase the property, including all closing costs; thus, Genesis did not contribute 30% of the purchase price.

In signing the Consent Order, Bean is barred from associating with any issuer, broker-dealer, or investment adviser in Maine for a period of two years. In lieu of a civil penalty, Bean shall pay $5,000 in restitution to the heirs of the Maine resident. The first two installment payments of this restitution have been paid by Bean and will be distributed by the Office of Securities to the heirs.

“Maine’s Office of Securities take pride in the fact that most investment firms and their employees have good reputations and act in the best interest of their clients,” Shaw commented. “However, this Office will aggressively pursue anyone who tries to take advantage of a potential investor. Often times, the victims are seniors with little time or opportunity to recoup their losses. We won’t tolerate unethical behavior in the sales of securities in Maine.”

In 2010, Maine’s Office of Securities ordered restitution totaling more than $6.4 million to investors. The Office obtained an additional $164,000 in restitution for Maine investors without taking formal action. The Office also imposed more than $900,000 in fines on violators of securities laws last year.

Shaw encourages all investors to check the license status of anyone offering to sell an investment product, and to make sure the product is properly registered in Maine. That information and general resources for consumers are available from the Office of securities at or by calling toll-free 1-877-624-8551 (TTY: 888-577-6690). People wishing to question a sales practice or submit a complaint are also encouraged to contact the Office.

The Office of Securities oversees the securities industry in Maine. It is part of Maine’s Department of Professional and Financial Regulation, which encourages sound ethical business practices through the regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can learn more about the Office and its resources online at

Maine’s Office of Securities Urges Investors to Be Cautious About Gold-Related Investments

Administrator Shaw Announces New Consumer Publication

“Gold: What Every Investor Needs to Know”

GARDINER, MAINE  —  Maine Securities Administrator Judith M. Shaw is urging investors who are considering gold-related investments to learn about the risks of investing in gold, as well as the potential rewards.  The Office of Securities has received several inquiries from investors who purchased gold bullion over the internet from companies offering to hold the bullion on their behalf for safekeeping.  In other cases, investors are simply unaware of the volatility that can occur in the precious metals market.

“With the price of gold hitting historic highs, some investors may feel a modern-day gold rush is happening, and that they need to be part of it,” Administrator Shaw commented.  “It is a myth, however, that gold is a fail-safe investment, and with so much talk and advertising in the media about this metal, it may be easy for investors to overlook the prevalence of gold-related scams.”

Regarding online gold scams, Shaw noted that the ‘secure vault’ in which the gold is supposedly held often does not exist, and investors have great difficulty recovering their investment.  Another common scam is for a company or promoter to offer an investor the opportunity to cash out other poor-performing investments to purchase gold.  Too often the investor will end up with a bag of gold-colored coins having no monetary value.

“Consumers should be extra cautious when someone advises them to cash out investments and roll those funds into gold or another kind of precious metal,” Shaw warned.  “Unfortunately, the marketplace for the sale of actual gold coins or gold bullion is not regulated to the same extent as other investments such as more traditional securities.”

Consumers being encouraged to cash out other investments should always make sure the person they’re dealing with is properly licensed.  Confirm their identity and find out if disciplinary action has ever been taken against the individual making the sales pitch.

“Anyone considering the purchase of gold or another precious metal should make sure they’re dealing with a reputable firm or dealer,” Shaw advised.  “Although the Office of Securities does not license precious metal dealers, we can quickly check the license and background of any adviser offering to roll other investments into gold or gold-related securities.”

Gold and gold-related securities can be even more volatile than the stock market, so they should never be viewed as short-term investments.  There are many options when considering an investment in gold, and the Office of Securities has listed the most common options and issues in a new consumer protection brochure, Gold: What Every Investor Needs to Know.’

Consumers can obtain the new publication and much more information about investing by visiting the Office of Securities online at or by calling 1-877-624-8551 (TTY 1-888-577-6690).  Consumers may also write to Maine Office of Securities, 121 SHS, Augusta, ME 04333-0121.

The new brochure is based on an investor alert issued by the North American Securities Administrators Association (NASAA), of which the Office of Securities is an active member.  Organized in 1919, NASAA is the oldest international organization devoted to investor protection (

The Office of Securities is part of Maine’s Department of Professional and Financial Regulation, which encourages sound ethical business practices through the regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can learn more about the Department online at

Research companies before buying services – Bangor Daily News

Research companies before buying services – Bangor Daily News.

Check before you invest. It’s the simplest advice we can offer consumers looking to earn more than the microscopic percentages a savings account returns these days.

A 91-year-old Maine resident (we’ll call him Walter) had a run-in in 2008 while attempting to help his son start an Internet business. Had he checked with Maine’s Office of Securities, he might have taken a different course.

Something called Wise Financial Marketing Solutions, an authorized agent of something called iBridge Equity, advertised itself as helping people start home-based Web businesses. The firm assisted with advertising home loans and mortgages and helped the buyer set up a website.

Walter called Wise in February 2008 and was told the program would cost $19.95. He agreed and gave the operator his credit card number. Later his statement showed a charge for that amount to “WFMS,” and another for $495, an amount the caller had not authorized.

Walter called and informed Wise he had changed his mind and didn’t want the program. He was told it couldn’t be canceled but that another, better program was available which would generate $1,500 a month. Although Walter never agreed to accept, he found an additional charge of $5,200 on his next statement.

They went back and forth for several months before Wise returned about $3,000. Last month, Maine’s Office of Securities issued a cease-and-desist order telling Wise not to make its pitch to any other Maine residents. The company can request a hearing within 30 days of receiving the order; as of this writing, no such request had been made.

The order notes that Wise was “administratively dissolved” in March of last year. Whether the principals are doing business under another name is not known.

Besides its bait-and-switch tactic after the initial complaint, what did the company do wrong according to Maine law?:

  • Did not register as a business opportunity in Maine.
  • Did not provide a disclosure statement to our buyer.
  • Did not respond to the Office of Securities’ certified letter requesting a list of Maine residents who had purchased the company’s business opportunities.
  • Did not respond to an order to cease and desist until it complied with Maine law about such sales. Continue reading

Maine’s Office of Securities Announces Settlement with Merrill Lynch to Resolve Claims of Violating State Regulations Regarding the Sales of Securities

More than $400,000 from Merrill Lynch to be Deposited into Maine General Fund

GARDINER, MAINE  — Maine’s chief securities regulator announced Wednesday that the State has entered into an agreement with Merrill Lynch, Pierce, Fenner & Smith Inc., a unit of Bank of America Corporation, to resolve claims that the brokerage allowed some of its associates to sell securities without being properly registered.

As a result, Merrill Lynch will pay more than $400,000 to the State of Maine, which will be deposited into the general fund.  Nationally, the company will be paying $26.5 million in agreements to settle unregistered selling claims.

A national investigation beginning in 2008 concluded that Merrill Lynch failed to adequately supervise its client associates, who act as sales assistants and administrative support personnel for Merrill Lynch’s financial advisors.  Client associates accept trade orders from clients, a practice that requires registration both in the client associate’s home state and in the client’s state.  The investigation found that Merrill Lynch’s supervisory system was not reasonably designed to ensure that its client associates complied with registration requirements.  Following the investigation and resulting actions, Merrill Lynch has instituted new supervisory controls over the registration of client associates, which regulators believe will provide added protection to Maine consumers.

“Firms must comply with registration requirements and they should closely examine how they conduct business,” Securities Administrator Judith Shaw said. “Investors should be able to have confidence that their financial professionals are in full compliance with the appropriate regulations.”

“Regulators in Maine and across the nation have a responsibility to ensure that the public is protected from companies and individuals who disregard or fail to follow securities’ laws,” Administrator Shaw commented.  “We take this responsibility very seriously and aggressively pursue potential violations.”

In making Wednesday’s announcement, Administrator Shaw reminded consumers to contact Maine’s Office of Securities regarding the registration and disciplinary record of individuals and companies offering investment opportunities.  “Check before you invest is always our best advice.”  More information about the Office and its resources is available online at

The Office of Securities oversees the securities industry in Maine.  It is part of Maine’s Department of Professional and Financial Regulation, which encourages sound ethical business practices through the regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine.  Consumers can learn more about the Department at

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