SEC microcap fraud actions: State securities regulators issue statement

(August 3, 1999) – As the SEC announced another microcap fraud sweep this morning, Peter C. Hildreth, New Hampshire’s director of securities regulation and president of the North American Securities Administrators Association (NASAA) issued the following statement:

These latest actions are another victory in the war against microcap stock fraud. Working together regulators are winning. Thanks to numerous actions by state, industry and federal regulators as well as US law enforcement agencies, today there are fewer big microcap firms, like fraud factories such as Stratton Oakmont.

But we can`t let down our guard. Some of these predatory brokers are moving on to or starting up smaller firms, hoping to fly beneath the regulators’ radar screens. The new redesigned Web CRD¹ system [scheduled to come on line later this month] should help state and industry regulators to better track these bad brokers as they move from firm to firm.

Unfortunately, however, fraud doesn`t go away, it just morphs into new life forms–like bogus prime bank and promissory notes, viatical schemes and Internet scams.

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1999 Headlines, Newsroom