leigh davis-schmidt securities examiner

Utah Division of Securities


Leigh Davis-SchmidtSecurities Examiner


Top 10 Threats to Investors


1. Ponzi Schemes2. Unlicensed Individuals Selling Securities3. Unregistered Investment Products4. Promissory Notes5. Senior Investment Fraud6. High-Yield Investment Schemes7. Internet Fraud8. Affinity Fraud9. Variable Annuity Sales Practices10. Oil and Gas Scams


Common Threads

• Promise of High Returns

• Promise of Little or No Risk

• Prey on Investors’ Trust

• Investors Don’t Ask Questions


Senior Investment Fraud• Often Claim to be “Senior Specialists”

•Certified Elder Planning Specialists (The National Registry of Elder Planning Advisors)

•Senior Benefit Centers Network •Senior Financial Survival Workshop•Certified Senior Advisors

• Sundance Public Relations•Ghost Written Books – Alligator Proofing

Your Estate•Newsletters & Brochures – Senior Times


• Use Introductory Seminars

• Offer Free Meal

• “Probe, Then Disturb, Then Enhance the Problem”

Annuity University

Wall Street Journal July 2, 2002


• “You’re there to solve their problems, but you have to create those problems first – No Problem, No Sale”

• “Tell them you can protect their life savings from nursing-home and Medicare seizure of assets. They don’t know what that is, but it sounds scary…it’s about putting a pitchfork in their chest.”

• “Show them their finances are all screwed up so that they think Oh, no! I’ve done it all wrong – this will make you money”

Annuity University

Wall Street Journal July 2, 2002


Equity Index Annuity


Source mass mailing sent to Maryland life agents

To age 99


Why Seniors Are Targeted

• Home to Answer the Phone or the Door

• Own Home Free and Clear• Have Money From Working & Saving

For So Many Years• Increased Reliance on Others• Home Alone


Remember: You may have more money and equity, but you also have more to lose because you don’t have the time or means to recapture your losses.


How to Spot a Con Artist• Con Artists Like to Blend In

• Disguise True Motives • Con Artists Dress for Success

• Dress Like They are Wealthy• Impressive Looking Office• Prestigious Sounding Address

• Con Artists Bring Out the Worst in You • Greed, Fear, Insecurity, etc.

• Con Artists Are Fair Weather Friends


Ten Tips To Protect Your Nest Egg

1. Don’t Be A Courtesy Victim

2. Check Out Strangers Touting Strange Deals

3. Always Stay in Charge of Your Money

4. Don’t Judge a Book by Its Cover

5. Watch Out for Salespeople Who Prey on Your Fears

6. Don’t Make a Tragedy Worse with Rash Financial Decisions


Ten Tips to Protect Your Nest Egg

7. Monitor Your Investments and Ask Tough Questions

8. Look for Trouble Retrieving Your Principal or Cashing Out Profits

9. Don’t Let Embarrassment or Fear Keep You From Reporting Investment Fraud or Abuse

10. Beware of “Reload” Scams


What Can You Do?• Ask Questions – Be an Informed Investor

• Get Everything in Writing and Keep a Copy of All Documents

• Risk No More Than You Can Afford to Lose

• If You Don’t Understand the Investment - Avoid It!!!

• Don’t Be Afraid to Hang Up the Phone


What Can You Do?

• If It Sounds Too Good to Be True – It Probably Is!

• Contact the Division of Securities:

• To See if the Individual Selling the Investment is Licensed

• To See if the Investment is Registered

• To Obtain Additional Information on the Individual and/or Firm


REMEMBER:

Investigate EVERYTHING

Before You Invest


Utah Division of Securities1-800-721-SAFE (7233)

(801) 530-6600www.securities.utah.gov