Page 18 - 2013_2014 NASAA report

NASAA Member Activity | U.S.
NASAA Activity Report 13-14.indd
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Utah Division of Securities
In 2013, the Division helped form a State Fraud Task Force to address issues related
to annuity regulation and enforcement. In Utah, fxed annuities are insurance products
regulated by the Utah Department of Insurance. Variable annuities are securities. Te
individual sales agents should be licensed both as an insurance agent with the Utah
Department of Insurance and as a broker-dealer agent with the Division. Equity-
indexed annuities, however, are deemed to be a fxed annuity and are regulated by
the Utah Department of Insurance, not the Division. Te task force was formed due
to this complex regulatory situation, the high amount of annuity sales in Utah, and
the increased incidence of free meal educational opportunities, newspaper ads and
possible violations in this area. Te group includes the Utah Department of Commerce
(Divisions of Securities, Corporations, Real Estate, & Consumer Protection) and the
Utah Department of Insurance. During quarterly meetings, joint regulatory cases
are discussed, and new or possible repeat violations are made known to both groups.
Trough these coordinated eforts, 26 individuals insurance licenses have been either
revoked or fagged not to license in the future.
Vermont Department of Financial Regulation
An investigation by the Department resulted in the return in 2013 of more than
$130,000 to Vermont investors who invested in an oil and gas exploration project in
Texas. An additional $20,000 was paid in fees and penalties and a portion will go to the
Department s investor education fund. An investigation by the Department determined
that sales representatives for Surety Services LLC of Delaware were doing business in
Vermont, but were not registered to do so. In June 2008, several Vermont residents were
invited to Surety s South Burlington ofce for a presentation by the president of the
Texas company, AOE Operators. As a result, four Vermonters and one Vermont company
purchased interests in the oil and gas rights of AOE. Te shares were not registered in
Vermont, which also is a violation of Vermont law.
Virginia Division of Securities & Retail Franchising
An investigation led by the Division and the FBI led to the conviction of a Virginia
man charged with defrauding investors of more than $800,000 from a project aimed
at purportedly developing a treatment for Human Immunodefciency Virus infection/
Acquired Immunodefciency Syndrome (HIV/AIDS).Te fraudster was sentenced to
108 months in prison.
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