December 2012 Newsletter
In this issue, we report on the seminar the NC Department of the Secretary of State conducted at the Mountain
Area Health Education Center (MAHEC) focusing on preventing elder financial fraud. Secretary Elaine F. Marshall
joined Dr. Jan Busby-Whitehead in this special seminar entitled “Elder Investment Fraud and Financial Exploitation
(EIFFE) Prevention Program.” We also report on the findings of a new study conducted by the UCLA Brain Research
Institute which sheds light on why older adults become fraud victims more often than they younger counterparts.
We also provide the latest update on the progress of the Investor Education in Your Workplace® Program. We also
provide information about a hot topic in the world of investing, crowdfunding, and we re-print an advisory to small
businesses about crowdfunding. We also re-print an updated Investor Alert issued by the Securities and Exchange
Commission warning investors about fake government websites. Finally, we provide our usual features, including an
updated Calendar of Upcoming Events and On The Docket with an update on the federal conviction of Sean Fitzgerald
Mescall on charges of securities fraud, wire fraud and money laundering. We report on the issuance of a Temporary Order
to Cease and Desist against Rondell Scott Hedrick and Hedrick Consulting, Incorporated. Finally, we include the latest
News from the Regulators.
November 2012 Newsletter
In this issue, we report that Carolyn Willis Grant has been charged with and has pleaded guilty to one felony count
of mail fraud in connection with a criminal investigation that was conducted by the Securities Division of the North
Carolina Department of the Secretary of State and the U.S. Postal Inspector’s Office. In a separate case, also being
conducted by the Securities Division, we report that the Commodity Futures Trading Commission has filed civil enforcement
action against Michael Anthony Jenkins who was indicted on August 20 on three counts of securities fraud and who is in
custody and awaiting trial. We also report on a fraud seminar in Matthews, NC, that was sponsored by the Better Business
Bureau Consumer Foundation of Southern Piedmont at which Secretary of State Elaine F. Marshall spoke. We also report on
the release of a Government Accountability Office (GAO) report calling on various federal agencies to put together a strategy
to effectively combat elder financial exploitation. We report that David Massey, Deputy Securities Administrator and
Director of the NC Securities Division, has been reappointed to a new two-year term representing the North American Securities
Administrators Association (NASAA) on the Financial Stability Oversight Council (FSOC). We also report on the early results
of the Investor Education in Your Workplace ® program that is currently underway in North Carolina. We include investor
bulletins on affinity fraud and on how to read confirmation statements. We also preview a new print advertisement that the
Securities Division is sponsoring in the Triad- and Triangle-area Retirement Resource Guide. We also include a warning for
investors to be aware of scams relating to Hurricane Sandy relief efforts. Finally, we include our regular features, the
Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators.
September / October 2012 Newsletter
In this double-issue, we report on the tenth in the on-going series of compliance workshops
the Division has conducted for registered investment advisers and their representatives. We also
report on the Division’s latest investor education initiative to train local law enforcement
investigators about securities-related scams. We report on the NC Senior Consumer Fraud Task Force’s 2012
Public and Private Sector Award winners, which includes the Division’s own John Maron. We include
information about the Elder Investment Fraud and Financial Exploitation (EIFFE) Prevention Program training
the Division is sponsoring at the Mountain Area Health Education Center (MAHEC) on November 31.
Registration details are included. We also recount the Department’s involvement with the 2012 NC State Fair.
We provide an update on the status of the Investor Education in Your Workplace® program the Department is
sponsoring for a second year. Nearly 1000 employees of over 20 North Carolina-based employers, including
the North Carolina National Guard, are participating in this year’s program. We also report on
“Operation Wax House,” a joint investigation being conducted by the Federal Bureau of Investigation (FBI),
the Internal Revenue Service (IRS), the NC Department of the Secretary of State, and the U.S. Attorney’s Office
for the Western District of North Carolina, in which 81 defendants have been charged for their alleged
involvement in what prosecutors are calling a criminal organization operating principally in Charlotte
and Waxhaw, NC, which stole more than $75 million from investors and mortgage lenders. We also provide
information about FINRA’s 2013 Web CRD®/IARD™ renewal procedures. We include two investor alerts, one
issued by the Securities and Exchange Commission on what investors can do about lost or stolen securities,
and one issued by FINRA concerning what investors need to know about trading halts, suspensions and other
interruptions. Finally, we include our regular features, the Calendar of Upcoming Events, On The Docket,
Recent Enforcement Actions and News from the Regulators.
August 2012 Newsletter
In this issue, we report the arrest of Michael Anthony Jenkins of Raleigh on three
felony warrants for securities fraud. We also provide important information for
investors of ZeekRewards.com now that the Securities and Exchange Commission has
announced fraud charges and an emergency asset freeze against Rex Venture Group,
LLC d/b/a ZeekRewards.com, and its owner, Paul R. Burks of Lexington, NC. We also
spotlight the Investor Education in Your Workplace ® program and encourage employers
to sign up for the Fall 2012 campaign. We reprint a cautionary article by Secretary
Elaine F. Marshall about how referral fees could trigger important investment adviser
licensing rules. We also announce the implementation of Legal Files, a powerful
case and management software system that will enable the Securities Division to
administer and enforce the state’s securities laws more effectively and efficiently,
thereby resulting in greater investor protection. We publish updated answers to
some of the frequently asked questions we receive from investors about securities.
We republish the findings of a survey conducted by the Investor Protection Trust
and the Investor Protection Institute concerning the financial exploitation of seniors.
We also announce that the Securities Division will conduct another training session
for medical professionals on this topic at the Mountain Area Health Education Center
(MAHEC) in Asheville on November 30. Details will follow. We also reprint an investor
alert published by FINRA dealing with public non-traded real estate investment trust
(REITs). We also update our regular features, the Calendar of Upcoming Events, On
The Docket, and News from the Regulators.
July 2012 Newsletter
In this issue, we announce the Securities Division’s continued participation in the Investor Education in Your Workplace ® program,
a ten-part online course of instruction that provides unbiased information that has already been field tested by nearly 8,500 employees
in hundreds of workplaces in North Carolina, Pennsylvania and Wisconsin. Employers wishing to enroll their employees may do so for free
on a first-come, first-served basis. The NC Securities Division is covering the cost for up to 1500 people to participate in the program.
For more information about the program, turn to page two of the newsletter or go to www.ieiyw.com/webinars to sign up for an informational
webinar. We also report that the Securities Division recently conducted its ninth compliance workshop for investment advisers. Additional
workshops are being planned and the schedule will be announced when it has been finalized. Last October, we re-printed an investor alert
jointly produced by the U.S. Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA)
concerning some of the risks associated with self-directed IRAs. On July 18th, NASAA and the Retirement Industry Trust Association (RITA)
jointly conducted an hour-long webinar about the challenges and opportunities for self-directed IRAs. We include a link to the audio
recording for the webinar which will help investors better understand how these investment products work and the risks associated
with them. We also announce that the Securities Division has updated its Frequently Asked Questions (FAQs) for investors. We include
an investor alert from FINRA concerning Exchange-Traded Notes (ETNs) and two alerts from the SEC concerning newly approved safeguards
to address market volatility and ways investors can get information about international investments. We also announce that the Division
has added five new titles to its library of free investor education materials. These new titles deal with derivatives, social networking,
exchange-traded funds (ETFs), gold and peer-to-peer lending. We also include our updated Calendar of Upcoming Events, Recent Enforcement
Actions, and the latest News from the Regulators.
June 2012 Newsletter
In this issue, we report on the investor education event Secretary Elaine Marshall attended in Concord, NC, on June 7.
We include video excerpts of her keynote speech. We also include a Request for Information published by the Consumer Financial
Protection Bureau (CFPB) regarding senior financial exploitation. We also include an interview with David Massey, Director of
the NC Securities Division, about the upcoming “IA Switch” and other topics of investor education and protection. We include two
SEC Investor Bulletins, one explaining how to read an 8-K, the form companies must file whenever there is a significant corporate
event that triggers a disclosure, and one explaining the role of the Depository Trust Company and what “chills” and “freezes” are
and what effect they have on an investor’s ability to hold and trade securities. Finally, we include our regular Calendar of
Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators features.
May 2012 Newsletter
In this issue, we invite people in the Charlotte/Concord area to attend an investment fraud seminar at the Embassy Suites Charlotte-Concord Hotel
on June 7 from 5:30 p.m. until 8:00 p.m. The event is free and dinner is included, but registration is required. See the newsletter for
registration details. We also report on a bill pending in the U.S. House of Representatives that would require investment advisers to become members
of a self-regulating organization (SRO). The bill has advisers and their clients alike concerned because, if enacted, the bill would impose a new
layer of regulation on advisers and require them to fund the SRO's activities through membership fees. We also include an investor alert
about "crowdfunding" and explain how it works and things investors should be wary of when considering a crowdfunded investment opportunity. We are also
pleased to report that the Investor Education Program has now successfully completed its goal of providing an educational presentation in all 100 of
North Carolina's counties. You will have to read the newsletter to see which county pushed us over the top! With June 15th being World Elder Abuse Awareness Day,
we provide information for people to use to report suspected elder abuse. We also include an investor alert from FINRA concerning nutraceutical stock scams
and one from the SEC concerning ways seniors can protect themselves from scams when using social media. We include the usual Calendar of Upcoming Events and
hope you will join us when we come to a location near you. We also provide updates on current pending criminal cases as well as the latest news from other regulators.
April 2012 Newsletter
In this issue, we announce that the Secretary of State's homepage has been given a makeover and that we have added a second domain
name: www.sos.nc.gov. We also report that Gary Bartko, a former securities attorney from Atlanta,
received a 23-year sentence for his role in an investment fraud scheme. We also announce that Secretary of State Elaine F. Marshall will
be the keynote speaker at a seminar jointly sponsored by the Financial Industry Regulatory Authority (FINRA), the NC Department of the
Secretary of State, AARP North Carolina and the Securities and Exchange Commission (SEC). This seminar, entitled "Get Smart About
Investment Fraud", will be held at the Embassy Suites Charlotte-Concord Hotel on Thursday, June 7, 2012, from 5:30 p.m. to 8:00 p.m.
The seminar is free and dinner is included, but registration is required. See the newsletter for details. We also report that the SEC
has filed fraud charges against self-proclaimed "social capitalist" Ephren W. Taylor, II. The SEC alleges that Mr. Taylor operated a Ponzi
scheme to swindle over $11 million, primarily from African-American churchgoers. We include two SEC Investor Bulletins, one dealing with
municipal bonds and the other warning of pre-IPO investment scams. We also include a FINRA alert about advance-fee scams that target US
investors through fake websites designed to look like real regulatory websites. Finally, we include our regular features, including our
Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators, which includes a notice from the SEC r
equesting public comments on the Jumpstart Our Business Startups (JOBS) Act and a statement from the North American Securities Administrators
Association (NASAA) on the "Investment Adviser Oversight Act."
March 2012 Newsletter
In this issue we report on the Elder Investment Fraud and Financial Exploitation (EIFFE) Prevention Program that was conducted at
the J. Paul Sticht Center on Aging at Wake Forest Baptist Hospital on March 23. We also note that on April 26, the Investor Education
Program will have achieved of its goal of conducting at least one educational program in all 100 of North Carolina’s counties when we
do a presentation at the Pamlico County Senior Services office in Alliance, NC. We include a notice that the U.S. Treasury Department
is in the midst of holding its Third Annual National Financial Capability Challenge. We include investor alerts originally published
by the Securities and Exchange Commission (SEC) on Real Estate Investment Trusts (REITs) and by the Financial Industry Regulatory Authority (FINRA)
on how to read and understand your brokerage account statements and trade confirmations. On our Multimedia Page we include video footage of
Secretary Elaine F. Marshall speaking at the EIFFE program. We also include an updated Calendar of Events as well as our On The Docket and
News From the Regulators features.
February 2012 Newsletter
In this issue, we report that Gary D. Martin of St. Augustine, Florida, pleaded guilty on February 8, 2012, to conducting a money
laundering conspiracy in connection with the $32.5 million Queen Shoals Ponzi scheme. This is the second conviction arising from
the Queen Shoals Ponzi scheme investigation which was conducted by the FBI with assistance from the North Carolina Securities Division,
the Commodities Futures Trading Commission (CFTC) and the Florida Bureau of Financial Investigations. Secretary Elaine F. Marshall releases
her list of twelve investment traps for 2012. We also unveil a new feature of our newsletter, a Multimedia Section which features a short
video on elder financial fraud which complements the seminar the NC Department of the Secretary of State is co-sponsoring on March 23 at
the Sticht Center on Aging at Wake Forest Baptist Hospital in Winston-Salem. Program registration information is included in this newsletter.
We also feature an article on money management for new couples. We also spotlight ten of our investor education brochures which are
free to order. We include alerts issued by the CFTC on precious metals fraud and by the North American Securities Administrations
Association (NASAA) on scams that seek to take advantage of people’s frustration with the historically low interest rates being earned on fixed
investment products. As usual, we include our regular features: Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and
News from the Regulators.
January 2012 Newsletter
Beginning with this edition, the Securities Division’s newsletter is now being published
in FlipBook format, making it easier to view, read and share on a variety of electronic
platforms and social media sites. In this edition, we encourage readers to start
2012 off with a resolution to “Check Before You Invest” by contacting the Securities
Division to check to see if their financial professional is properly registered
to sell or advise about investment securities. We also report having received a
huge shipment of the updated Financial Field Manual, a personal finance publication
for military personnel and their families that is jointly published by Kiplinger’s
Personal Finance magazine and the Better Business Bureau. Contact the Securities
Division to order your free copy today. We republish an investor alert from the
Securities and Exchange Commission on how to avoid falling victim to investment
fraud while using social media sites. We also republish an investor alert from the
Financial Industry Regulatory Authority (FINRA) on what investors should do if they
or their email account is hacked illegally. We also include an updated Calendar
of Upcoming Events listing the investor education events that have been scheduled.
Be sure to check to see if one is scheduled near you and encourage your neighbors
to attend. Finally, we include the latest information about pending enforcement
actions and news from some of the other regulators.