Page 15 - 2013_2014 NASAA report

NASAA Member Activity | U.S.
NASAA Activity Report 13-14.indd
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North Dakota Securities Department
In 2013, a former securities broker who defrauded 18 clients of more than $900,000
in a Ponzi-like scheme was sentenced to 10 years in prison. Te prosecution was the
result of an investigation of investor complaints by the Department, which uncovered
the fraudulent scheme, and a subsequent criminal referral to the Cass County States
Attorney.
Ohio Division of Securities
In 2013, the Division successfully completed the frst on-site examination of all Ohio-
based mid-sized investments advisers that switched from SEC to state registration,
all within the frms frst year of state registration. Ohio examines all of its home state-
registered investment advisers on a three-year risk basis. Ohio continued its focus on
criminal violations of Ohios Securities Act with six new cases resulting in a criminal
indictment, conviction, or sentence in 2013. Five of those cases involved the sale of
unregistered securities. As part of a larger multi-state administrative investigation,
Ohio issued a cease and desist order and obtained a preliminary injunction against an
Ohio promoter regarding a high-yield investment and afnity fraud scheme known as
Proftable Sunrise. Te Division works closely with local industry and practitioners
through advisory committees and its annual Ohio Securities Conference, which attracted
about 150 attendees and speakers from FINRA and leading Ohio securities scholars.
Oklahoma Securities Commission
In November 2013, an Oklahoma woman was released from prison after serving 10
years in connection with a Ponzi scheme uncovered by the Department during a
broker-dealer examination. In December 2013, the appointed receiver made the last
distribution to investors who lost over $9 million, making the investors whole as to
their principal. Tis recovery was due to legal battles waged by the Department and
the receiver before the Oklahoma Supreme Court, the U.S. Bankruptcy Court, and the
Tenth Circuit and investor arbitrations. Te Department and the receiver sued 163 relief
defendants whose profts exceeded the amounts of their initial investments. A portion
of the recovery was received in the Department s aiding and abetting case against an
Oklahoma bank through which over $200 million fowed as part of the Ponzi scheme.
Oregon Division of Finance & Corporate Securities
Scam Jam Oregon, a frst-ever event to help consumers recognize and prevent
fnancial fraud and scams, was so successful it had to move to a larger room in Portland s
Convention Center. More than 600 people listened to speakers, received one-on-one
advice from nonproft, government and consumer advocates, and posed questions to a
panel on identity theft, false advertising and telemarketing at the event hosted by the
Division, the Oregon Department of Justice and AARP Oregon. Te event garnered
excellent news coverage, including a story about a woman who got caught in a fraudulent
gold mine investment scheme and complained to DFCS. A similar event is being
planned in southern Oregon and a second Portland Scam Jam is planned for October.
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