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April / May 2013 Newsletter
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In this issue, we report on the success of “Elder Abuse: A Multidisciplinary Approach to Justice,” the first
multijurisdictional conference devoted to the topic of elder abuse. We include an update in the on-going
“Operation Wax House” racketeering case that involves a total of 92 defendants, many of whom are North
Carolina residents. We report on the arrest of James H. Mason of Graham, NC, on charges that he solicited
$4.7 million from at least 500 victims in a foreign currency exchange Ponzi scheme. In a similar but
separate case, we report that a federal judge has ordered Timothy Bailey of Monroe and Michael Hudspeth,
formerly of Statesville, to pay over $1.8 million in restitution and fines in connection with an off-exchange
foreign currency Ponzi scheme that solicited at least 22 people. This spate of foreign currency (forex)
scams has prompted the Securities Division to re-issue an investor alert warning investors about the
potential dangers associated with forex trading. We also report that fifteen North Carolina-based employers
have opted to enroll some or all of their employees in the third round of the Investor Education in Your
Workplace® Program. Once again the NC Department of the Secretary of State is making this 10-part, online
investor education program available free-of-charge to up to 1185 people across the state. In this issue,
we also unveil the two newest advisories in our “Informed Investor” series. One advisory deals with changes
that are anticipated with the way private placement offerings may be marketed. The other advisory helps
explain the differing duties and responsibilities of various financial service providers. This segues into
the findings of a study conducted by the Consumer Financial Protection Bureau (CFPB) confirming that senior
citizens are confused by the array of titles used by financial service providers. We also announce an
upcoming series of seminars on business essentials for small businesses. Finally, we include our regular
features: Calendar of Upcoming Events; On The Docket; Recent Enforcement Actions; and News from the
Regulators.
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March 2013 Newsletter
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In this issue, we report on the Temporary Cease and Desist Order the NC Secretary of State Securities Division issued to Roman Novak,
Radoslav Novak and Inter Reef LTD d/b/a Profitable Sunrise to bar them from offering and selling or attempting to sell securities in
North Carolina. We also report that Gary D. Martin of St. Augustine, FL, and formerly of North Carolina, was sentenced to ten years in
prison and ordered to pay $31.7 million restitution for his role in the $32.5 million Queen Shoals Ponzi scheme. The Queen Shoals mastermind,
Sidney S. Hanson, is currently serving a 22-year federal sentence for his involvement in the scheme. We also announce that the North
American Securities Administrators Association (NASAA) is teaming up with AARP to conduct a webinar on Tuesday, April 23, 2013, at 2:00 PM,
on ways to avoid financial fraud. Registration details can be found in the newsletter by clicking the link above. We also provide a look
at how well North Carolina participants did in the "Investor Education in Your Workplace® Program". We are also pleased to announce that we
will be sponsoring another round of the program beginning May 6. Registration details are included in the newsletter by clicking the link
above. We also republish an investor alert prepared by the Securities and Exchange Commission (SEC) concerning understanding what it means to
grant your investment adviser "custody" of your investment assets. Finally, we include the usual features: Calendar of Upcoming Events, On The
Docket, and News from the Regulators.
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January / February 2013 Newsletter
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In this issue, we report on the sentencing of two men, Mitchell Brian Huffman and Robert S. Moss, both of Charlotte, to prison
for operating separate Ponzi schemes. We also provide an update on the status of the Investor Education in Your Workplace® Program
in North Carolina. The Securities Division announces that it is sponsoring another round of the program to start in May and which
will run until August. Interested employers wishing to bring the program to their employees should contact John Maron for more
information. We also report that Barbara Bennett, Investor Education Specialist with the Securities Division, was named as the
Department's "2012 Employee of the Year". We also report on an effort by the Department's Corporations and Securities Divisions
to provide training to members of the state community college system's Small Business Center Network. We provide information about
investor education resources available to citizens and members of the armed services and report on activities undertaken by the
Division as part of Military Saves and America Saves Week. We report on efforts taken by the National Futures Association (NFA) to
help investors research the professional backgrounds of their commodities brokers. On that theme, we reprint an article published by
the Commodities Futures Trading Commission (CFTC) providing consumer information about commodity trading systems that are sold on the
Internet. We also reprint an investor bulletin originally published by the Securities and Exchange Commission (SEC) explaining credit
risk as it relates to municipal bonds. As usual, we list our Calendar of Upcoming Events, cases that are On The Docket, Recent
Enforcement Actions and News from the Regulators.
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