Posts Tagged ‘U.S. Securities and Exchange Commission’

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.


State Agencies Issue Investor Alert

State Agencies Issue Investor Alert: Alleged $600 Million Internet Ponzi Scheme By and Related Companies Halted By Federal District Court

Maine’s Office of Securities and Bureau of Financial Institutions Offer Assistance and Provide Information to Maine Investors of ZeekRewards  

GARDINER – Maine’s Office of Securities and Bureau of Financial Institutions today alerted consumers that federal regulators recently took action to stop an alleged massive online “profit sharing” Ponzi scheme that appears to have attracted Maine investors.  The site,, was placed into receivership and had its assets frozen by a North Carolina District Court on August 17 following an action by the U.S. Securities and Exchange Commission (SEC) for securities fraud against the site, as well as a related entity, Rex Venture Group, LLC, and internet marketer Paul R. Burks of Lexington, N.C.

According to the SEC’s complaint, ZeekRewards and defendants raised $600 million dollars from more than one million internet customers and investors nationwide and overseas through the website,, which began operating in January, 2011.  Customers were offered several ways to earn money through the ZeekRewards profit-sharing program, which the SEC alleges was marketed in violation of federal law.  ZeekRewards operated a classic Ponzi scheme by paying the first wave of investors with new funds solicited from subsequent investors using false and misleading statements.

“Some Maine financial institutions reported receiving requests for assistance from customers who invested in, so, unfortunately, we have good reason to believe there may be a number of Maine victims of this scheme,” said Bureau Superintendent Lloyd LaFountain III.  LaFountain encouraged anyone who purchased an interest or otherwise invested in ZeekRewards through a monthly subscription or other recurring payment plan administered by their financial institution to contact the institution immediately to make sure future payments are not deducted from the customer’s account.

The receiver in this case has identified $225 million in investor funds in 15 foreign and domestic financial institutions, but is still currently identifying assets and victims of the scheme.  Securities Administrator Judith M. Shaw urged investors to stay abreast of developments by monitoring the receiver’s website:  Shaw pointed to another resource for investors, an SEC site to keep investors apprised of updates,

“Scam artists rely on the internet as a reliable forum for perpetuating fraud,” noted Shaw.  “The fact that this scheme reportedly pulled in over one million investors worldwide underscores the importance of thoroughly investigating any kind of profit-making venture before investing, regardless of how the venture is styled or presented  The Office of Securities stands ready to assist all Maine citizens with objective information so that investors can make informed investment decisions.”

The Office of Securities and Bureau of Financial Institutions are 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

Outsmarting investment fraud – Free DVD

Attendees at the Maine Consumer University were offered copies of a documentary entitled Trick$ of the trade: outsmarting investment fraud. If you would like your own copy, visit

Additional resources presented:

Maine Office of Securities, part of Maine’s Department of Professional and Financial Regulation

The United States Securities and Exchange Commission, answers questions, analyze complaints, seek informal resolution of investors’ problems The SEC’s Office of Investor Education and Advocacy is dedicated to serving the needs of individual investors This website is brought to you by 22 Federal entities that work on improving financial literacy and education. It is a central place for unbiased, reliable information and materials on financial topics of interest to you.

FINRA Investor Education Foundation, the leading non-governmental regulator for all securities firms doing business in the United States

Link to Almighty Wind and James Rivera Cease and Desist Order

Maine’s Office of Securities Highlights State and Federal Action to Stop Scheme Targeting Deaf Investors

Mainer Among 14,000 Worldwide Allegedly Defrauded of $7 million

 GARDINER, MAINE — Maine Securities Administrator Judith M. Shaw announced on Friday that the U.S. Securities and Exchange Commission (SEC) has filed a civil injunctive action against Jody Dunn of Texas. The complaint alleges that Dunn, who is deaf, solicited investments from others in the deaf community for Imperia Invest IBC (Imperia). The Commission previously charged Imperia with securities fraud and obtained an emergency court order to freeze its assets. At least one investor from Maine was victimized by the scheme, while others may have been targeted.

Maine’s Office of Securities took action against Imperia last year, issuing a summary Cease and Desist Order. The May 5, 2010 order prohibited Imperia from soliciting Maine investors through the offer of unregistered securities. Maine’s action resulted from a complaint involving a deaf consumer who invested $1000 in Imperia after being promised a multi-million dollar return within six months.

Securities investigators in Maine learned that Imperia’s website made claims of astonishing returns—as much as $134,000 on an investment of as little as $50. Investigators tracked Imperia to what appears to be a phony address on a South Pacific island. The Office issued its order to alert the public. Maine investigators also provided information to federal agencies to assist in a probe they were undertaking.

According to the SEC complaint, Dunn solicited more than $3.45 million as part of Imperia’s investment scheme from several thousand deaf investors. Dunn failed to tell investors that he was using a portion of their funds to pay his mortgage, car loans, car insurance and a variety of other personal expenses. Dunn sent the remaining amounts to Imperia’s offshore bank accounts in Costa Rica, Panama, the British Virgin Islands, Cyprus and New Zealand. Investors have never been paid any interest after giving their money to Dunn to invest, nor were their funds ever invested. Even after the Commission charged Imperia and issued an investor alert, Dunn continued to reassure investors that Imperia was legitimate and they would be paid.

“Actions taken by the Office of Securities and the SEC in this case will protect investors in Maine and elsewhere,” Securities Administrator Shaw commented. “This is a concrete example of how enforcement and awareness can be enhanced through cooperation between state and federal securities agencies. This case also highlights the important role victims, and those with concerns about investment offers, can play in shutting down scams.”

Shaw noted the scheme’s sophistication. Imperia’s operators allegedly used several off-shore Pay Pal-style entities in the British Virgin Islands, Costa Rica and Panama, bank accounts in Cyprus and New Zealand, and apparently phony offices in the Bahamas and elsewhere to perpetrate the fraud.

Consumers with information about Imperia or Jody Dunn are urged to contact Maine’s Office of Securities. They are also encouraged to contact the Office to check an investment adviser, salesperson or investment, or for other information related to investing by calling 1-877-624-8551 (TTY 1-888-577-6690), by visiting the Office’s website (, or by mail to Maine Office of Securities, 121 SHS, Augusta, ME 04333-0121.

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 Announces Improvements to

Individual Investors and Businesses Benefit from Enhancements to National Securities Industry Database

AUGUSTA, MAINE  —  Securities Administrator Judith Shaw announced this week that investors and businesses have an additional tool at their disposal to research the background and disciplinary history of licensed stock brokers and investment advisers.  The recently launched FINRA Disciplinary Actions Online database is a web-based searchable system that makes FINRA disciplinary actions accessible directly online.

 Administrator Shaw explained that the database benefits the public by increasing the transparency of and access to FINRA’s files on stock brokers and investment advisers who have been involved in disciplinary actions.  The public is now able to quickly search, download, print or read FINRA actions free of charge, seven days a week.  

 Users may search the system in a variety of ways, including by individual broker name and Central Registration Depository (CRD) number, or by firm name and CRD number, as well as by case number or action date (by date range).  Previously, the public had to contact FINRA to obtain copies of disciplinary actions.  The new database makes disciplinary action documents–including Letters of Acceptance, Waivers and Consent, and settlements–immediately available.

 “Investors are always encouraged to contact Maine’s Office of Securities to check the registration of investment opportunities, as well as the licensing and background of investment advisors,” Shaw commented.  “Enhancements to FINRA’s BrokerCheck® online system, however, make it easier than ever for investors to obtain additional information on their own.”  

Shaw said personal service is available from professional staff at the Office of Securities by calling toll-free 1-877-624-8551 (TTY: 888-577-6690).  Online disciplinary history through FINRA’s BrokerCheck system is available at  In 2010, members of the public used BrokerCheck to conduct 17.2 million reviews of broker or firm records.

 The Office of Securities oversees the securities industry in Maine.  It is part of the 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 for the purpose of protecting the citizens of Maine.  More information about the Office and its resources is available at 

FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for securities firms doing business in the US. For more information, visit

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