Wake Forest Investment Advisor Sentenced for Wire Fraud |
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A Wake Forest, NC, man was sentenced on April 5, 2021, to 135 months imprisonment for wire fraud and ordered to pay $6,040,965.00 in restitution.
According to court documents, Anthony Wayne March, 49 years old, operated the non-profit 501(c)(3) entity Asset Trader, located in Rolesville, NC, between 2012 to 2015. March represented that Asset Trader offered educational services to professionals and taxpayers in the area of exit planning. Asset Trader’s stated educational mission allowed it to obtain classification as a 28 U.S.C. § 501(c)(3) tax-exempt non-profit organization. Asset Trader used its §501(c)(3) tax-exempt status to solicit tax-deductible donations in exchange for charitable gift annuities (“CGAs”) and to recruit referral sources to obtain assets from potential donors. Through Asset Trader, March and his co-conspirators engaged in and executed what is commonly known as a “Ponzi” scheme to defraud investors by inducing them to invest with Asset Trader.
During the course of the scheme, March solicited at least 22 victims to invest over $8,100,000 in charitable gift annuities and other products offered by Asset Trader. March and Asset Trader sold these securities to victims as retirement or exit planning vehicles classified as donations to March’s § 501(c)(3) tax-exempt non-profit organization. March did not utilize any of the victim’s money for charitable purposes; rather, he spent the money on "Ponzi" payments, his own lavish lifestyle, and expenses of the scheme (see images on the right).
March pled guilty today to conspiracy to wire fraud on August 3, 2020.
G. Norman Acker, III, Acting U.S. Attorney for the Eastern District of North Carolina, made the announcement after sentencing by Chief U.S. District Judge Richard E. Myers II. The Internal Revenue Service Criminal Investigation Division (IRS-CI), and the North Carolina Secretary of State, Securities Division conducted the investigation in this matter. The Office of the U.S. Bankruptcy Administrator for the Eastern District of North Carolina provided substantial assistance. Assistant United States Attorney Ethan Ontjes, Special Assistant United States Attorney Brian Behr, and Special Assistant United States Attorney Kevin Harrington represent the United States.
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Partial list of luxury items March
purchased using investors' money
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NASAA Announces Top Investor Threats for 2021
Hopkins: “Get-rich schemes are built on empty promises and empty pockets.”
The North American Securities Administrators Association (NASAA) has reminded investors to be on the lookout for investment schemes pitched through the internet and social media, particularly those involving precious metals, cryptocurrencies, promissory notes and foreign exchange markets.
Schemes related to these products were identified as the top threats facing investors this year in a NASAA survey of enforcement officials with state and provincial securities regulators throughout the United States, Canada and Mexico.
The survey found fraudulent internet- or social media-based frauds as the top threat to investors. Ranked second are cryptocurrency-related and precious metals-based investments, especially those purchased through self-directed individual retirement accounts, which lack the services and protection of traditional IRAs and can be fertile soil for scammers. Foreign exchange-related schemes rounded out the top three threats. In particular, enforcement officials expect to see a resurgence of high-yield foreign exchange and cryptocurrency-related schemes targeting investors this year disguised as membership or investment programs.
The NASAA survey also indicated that 82% of state and provincial securities regulators anticipate that bad actors will continue to attempt to leverage investor fear and anxiety related to changes in financial markets and the economy due to COVID-19 to illegally sell securities this year.
“Bad actors always try to leverage vulnerabilities wherever they can be found. We expect to see an uptick in complaints from investors lured into programs offering the promise of high returns as a way to supplement income lost as a result of the pandemic,” said Lisa A. Hopkins, NASAA President and West Virginia’s Senior Deputy Securities Commissioner.
Investment offers that sound “too good to be true” often share similar characteristics. The most common telltale sign of an investment scam is an offer of guaranteed high returns with no risk. All investments carry the risk that some, or all, of the invested funds could be lost. “Anyone who says their investment offer has no risk is not being honest,” Hopkins said. “Investing is a long-term proposition. Get-rich schemes are built on empty promises and empty pockets.”
Hopkins recommends that investors should always ask if the salesperson and the investment itself are properly licensed or registered. This information can be confirmed by state and provincial securities regulators. “Working with a properly licensed investment professional affords investors certain legal protections,” she said. “Offering to sell an investment without a license is against the law.”
Information about each of the top investor threats can be found on the NASAA website here, and the Securities Section of the Secretary of State's website includes a wealth of investor education information.
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NCSOS's John Maron Shares Investor Education Message with AARP North Carolina Fraudcast
As new products and medical treatments are traded by start-ups and blue-chip companies on stock exchanges, what steps should you take to be sure you are protected when buying them? What are the key differences between a stockbroker, investment adviser and financial planner? Who are the most vulnerable victims of investment fraud?
John Maron, Director of the NC Secretary of State’s Investor Protection and Education Services Program, spoke with AARP North Carolina’s Gretchen Batra and fielded questions in March about how to spot, stop and report investment scams. You can watch the program in its entirety here. Call our NC Investor Hotline at 800-688-4507 to check the registration of anyone offering you an investment opportunity, as well as the registration of the investment opportunity itself.
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Fractional shares? Cryptocurrency? Robo Advisers? Oh my! Wondering how new investment options might fit into your retirement plan?
Join the NC Secretary of State’s Securities Division, the Investor Protection Trust (IPT) and PBS Books for the Investing: What’s New & What’s Not event via Facebook Live on Friday, April 23 at 1pm ET. Listen to experts talk about new ways to invest like cryptocurrency and fractional shares as well as the tried and tested investment strategies like diversification and due diligence. So mark your calendar and join us on our Facebook page at 1 p.m. on April 23 for the discussion.
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NASAA’s Legislative Agenda Calls for Congress to Prioritize Investor Protection
The North American Securities Administrators Association (NASAA) on March 8th released its legislative agenda for the 117th Congress, advocating for policymaking designed to protect and empower retail investors and ensure the preeminence of our nation’s public securities and financial markets.
“As the securities regulators closest to investors, as well as many startup and small businesses, NASAA members have a unique perspective on national policy issues. We look forward to working with the 117th Congress on bipartisan legislative policies that prioritize the interests of retail investors,” Lisa A. Hopkins, NASAA President and West Virginia Senior Deputy Securities Commissioner, said during a briefing on March 8th.
NASAA’s legislative agenda was developed by the state securities regulators of NASAA’s Federal Legislation Committee, chaired by Claire McHenry, Deputy Director of the Nebraska Department of Banking Bureau of Securities. The agenda calls for Congress to ensure the preeminence of the U.S. public markets by resisting measures to water-down current regulatory standards while also enacting measures to provide greater transparency of the private markets. “As private markets expand as the result of regulatory policies pursued by the SEC, Congress has an obligation to review the rules under which these markets operate and the protections in place for investors,” Hopkins said.
Hopkins added that NASAA will actively engage with members of Congress to promote policies designed to enhance diversity, equity, and inclusion in all aspects of the capital markets, take steps to prevent exploitation of elderly investors, and address the unique challenges facing Millennial investors. “Congress has a critical role to play in advancing diversity, equity, and inclusion,” Hopkins said. “The new Congress should also consider how regulators can help facilitate greater diversity.”
NASAA’s agenda calls for Congress to vigorously exercise its oversight authority on behalf of the investing public in an array of financial matters including self-directed individual retirement accounts and special purpose acquisition companies. “Congress has a responsibility to shine a spotlight on risks to investors and examine potential solutions to address these risks,” said Michael Canning, NASAA’s Director of Policy and Government Affairs. “Similarly, Congress should insist that the SEC prioritize issues impacting retail investors.”
Melanie Lubin, NASAA President-elect and Maryland Securities Commissioner, said NASAA will encourage the 117th Congress to support small and emerging businesses by expanding outreach and education to such businesses regarding the unprecedented options they have for raising capital responsibly from investors under existing federal and state laws and regulations. “Congress should support efforts to promote responsible capital formation by small and emerging businesses that are consistent with investor protection principles,” Lubin said. “Given the abundance of capital raising options already available to promising small businesses, Congress should make coordination and outreach by federal agencies to these businesses a priority, especially for businesses that may be at a disadvantage due to factors such as race, gender, or geographic location.”
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Latest Informed Investor Alerts Look at ESG Investing and Online Investing in the Age of Social Media
As climate change and social concerns have grown in recent years, many investors are becoming more conscious of whether a company in which they are investing has considered environmental, social and governance (ESG) factors. This is resulting in an investor-driven push to get corporate managers to pay greater attention to ESG issues. Some corporations are responding by altering their management philosophies and business plans.
This Alert on the NC Secretary of State's site provides handy information on the factors investors may want to take into account when considering an ESG investment.
We also have added an Informed Investor Alert highlighting the intersection of social media, online trading and investing. As evolving technology makes investing easier and more accessible to more people, the informed investor knows that technological democratization also can bring more risk. This new alert provides tips to protect yourself while using these online tools for investing.
For more investment-related resources, please visit our website.
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New Research: Repeated Exposure to Fraud Awareness Education Reduces Susceptibility to Investment Scams
While the economic fallout caused by COVID-19 has led to a significant rise in tips, complaints and referrals involving investment scams, new research from the FINRA Investor Education Foundation (FINRA Foundation) and the Center for Economic and Social Research (CESR) provides evidence that repeated exposure to concise, online educational interventions can reduce susceptibility to investment fraud among U.S. adults.
Researchers found that educational interventions can increase consumers' ability to recognize fraudulent investment opportunities and increase their knowledge about investment fraud. Further, there was no evidence that the interventions reduced consumers' interest in investing in legitimate investment opportunities. The study, Can Educational Interventions Reduce Susceptibility to Financial Fraud?, underscores the need for effective and ongoing fraud prevention education.
"Practitioners working in this space have been forced to rely on anecdotal evidence when justifying their efforts because until now, very little published research has examined whether educational interventions can meaningfully reduce individuals' susceptibility to financial fraud, whether they discourage investing in general, and whether any positive effects might persist over time," said Gerri Walsh, President of the FINRA Foundation. "These findings underscore the need for repeated exposure to educational resources that enable individuals to make informed choices and help them to recognize, avoid and report financial fraud."
"Our research suggests that short, easily scalable online education programs can meaningfully reduce adults' susceptibility to investment fraud—and that these effects can persist with repeated exposure," added CESR researcher Jeremy Burke.
Using a sample of 2,000 adults drawn from the Understanding America Study—a nationally representative survey panel—participants were randomly placed into one of three groups:
- A video treatment in which subjects viewed a three-minute educational video about techniques often present in investment fraud;
- A text treatment in which participants were provided online reading materials about techniques often present in investment fraud (the same information offered to the video treatment group, but in a concise text format); and
- A control group in which participants received no educational intervention.
The educational interventions were centered on the five techniques fraudsters often employ when engaging in investment fraud. Researchers measured fraud susceptibility immediately after the initial intervention and again six months later, using investment pitches drawn from real-world investment offers and enforcement actions initiated by the U.S. Federal Trade Commission. Researchers also intermixed legitimate investment pitches with fraudulent investment pitches to examine whether the interventions influenced participants' general willingness to invest.
Key findings from the report include:
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Educational interventions have immediate positive impacts. Shortly after receiving the initial intervention, participants who received the video and text treatments displayed significantly lower willingness to invest in the fraudulent investment opportunities offered than the individuals in the control group.
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Educational interventions have lasting effects when coupled with repeated exposure. While the positive effects of the educational intervention decayed over time, the effects of the intervention persisted for participants who received a secondary intervention. Respondents who received the secondary intervention three months after the initial one expressed a willingness to invest in fraudulent investment opportunities at the six-month mark at a rate that was 10 percent lower than individuals in the control group.
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Educational interventions had no effect on participants' willingness to invest in legitimate investment opportunities. Following their exposure to the educational interventions, participants were able to internalize the information and apply it without being dissuaded from investing in general at the six-month mark.
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Educational interventions increase knowledge. Individuals who were exposed to the first and second educational interventions had higher levels of consumer knowledge than those in the control group, based on their responses to a five-question test. This suggests that the secondary intervention created lasting impacts on consumer knowledge. The study also found evidence that this increased knowledge may have led to the meaningful increases in the ability to recognize fraudulent investments.
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The effectiveness of educational interventions varies by consumer characteristics. Individuals with higher cognitive ability and higher financial literacy disproportionately benefited from the educational interventions. Researchers did not see any effect of the interventions for those with low cognitive ability or low financial literacy.
Despite the effectiveness of the interventions, researchers did observe that study participants across all treatment conditions had a higher willingness to invest in the fraudulent opportunities than the legitimate ones, which suggests how much more compelling fraudulent opportunities can be relative to legitimate opportunities and highlights the difficult task financial fraud educators face.
Investors with questions or concerns surrounding their brokerage accounts and investments can contact the FINRA Securities Helpline for Seniors toll free at 844-57-HELPS (844-574-3577) Monday through Friday from 9 a.m. – 5 p.m. ET. FINRA staff can help investors with concerns about potential fraud or unsuitable or excessive trading; answer questions about account statements or basic investment concepts; and assist beneficiaries who are having trouble locating or transferring their deceased parents' assets. Seniors in North Carolina are urged to always call the Secretary of State's NC Investor Hotline at 800-688-4507 to check the registration of anyone offering them an investment opportunity, as well as the registration of the investment opportunity itself. You can also reach out to the Secretary of State's Securities Division at secdiv@sosnc.gov.
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Celebrity Involvement with SPACs – Investor Alert
The SEC’s Office of Investor Education and Advocacy (OIEA) cautions investors not to make investment decisions related to SPACs based solely on celebrity involvement.
Celebrities, from movie stars to professional athletes, can be found on TV, radio, and social media endorsing a wide variety of products and services. Sometimes they are even involved in investment opportunities such as special purpose acquisition companies, or SPACs, as sponsors or investors. Those celebrities may even be well-known professional investors.
However, celebrity involvement in a SPAC does not mean that the investment in a particular SPAC or SPACs generally is appropriate for all investors. Celebrities, like anyone else, can be lured into participating in a risky investment or may be better able to sustain the risk of loss. It is never a good idea to invest in a SPAC just because someone famous sponsors or invests in it or says it is a good investment.
SPACs have become a popular vehicle for transitioning a private company to a publicly traded one. A SPAC is a blank check company with no operations that offers securities for cash through an initial public offering (IPO). SPACs then have a specified period of time—typically two years—to identify and merge with a private operating company. This business combination is often used as an alternative means of taking the acquired company public, rather than through a traditional IPO.
Special purpose acquisition companies (SPACs). To learn more about SPACs and what to consider before investing in a SPAC, see our Investor Bulletin about what you need to know.
However, SPAC transactions differ from traditional IPOs and have distinct risks associated with them. For example, sponsors may have conflicts of interest so their economic interests in the SPAC may differ from shareholders. Investors should carefully consider these risks. In addition, while SPACs often are structured similarly, each SPAC may have its own unique features, and it is important for investors to understand the specific features of any SPAC under consideration.
Differing economic interests. SPAC sponsors generally acquire equity in the SPAC at more favorable terms than investors in the IPO or subsequent investors on the open market. As a result, the sponsors will benefit more than investors from the SPAC’s completion of a business combination and may have an incentive to complete a transaction on terms that may be less favorable to you. To learn more, see our Investor Bulletin.
Even if a celebrity is involved in a SPAC, investing in one may not be a good idea for you. Before investing, always do your research, including these three steps:
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Check out the background, including registration or license status, of anyone recommending a SPAC, using the search tool on Investor.gov;
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Learn about the SPAC sponsors’ backgrounds, experience, and financial incentives, how the SPAC is structured, the securities that are being offered, the risks associated with an investment in the SPAC, plans for a business combination, and other shareholder rights by carefully reading any prospectus which may be available through the SEC’s EDGAR database; and
- Consider the investment’s potential costs, risks, and benefits in light of your own investment goals, risk tolerance, investment horizon, net worth, existing investments and assets, debt, and tax considerations.
Never invest in a SPAC based solely on a celebrity’s involvement or based solely on other information you receive through social media, investment newsletters, online advertisements, email, investment research websites, internet chat rooms, direct mail, newspapers, magazines, television, or radio.
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One Call Could Save Your Life Savings!
Is that individual offering you an investment opportunity licensed to sell securities in North Carolina? Is the investment opportunity itself registered? Know before you sign!
While registration in and of itself is no guarantee against fraud, not being registered is a very big red warning flag.
We urge you to take five minutes to call our NC Investor Hotline at 1-800-688-4507 to see if the person you have been dealing with – perhaps even for years – is properly registered and/or has a disciplinary history. You can also check to see if the actual investment itself is properly registered.
Pick up the phone and call us. You owe it to yourself and your family to check. And please also consider sharing the information in this newsletter with YOUR contacts or your social networks. Doing so will help keep your friends and loved ones safe, too. More information can be found at https://www.sosnc.gov/divisions/securities/for_investors.
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Cybersecurity: Current and Emerging Industry Priorities and Threats
MARCH 09, 2021
Over the past year, cybersecurity has only increased in importance as huge swaths of the workforce began—and continue—to access networks remotely, resulting in a significant shift to the cybersecurity landscape.
On this episode of FINRA's UNscripted podcast, John Brady, FINRA’s Chief Information Security Officer (CISO), and Eric Pickersgill, FINRA’s Deputy CISO, talk about on how FINRA handled the transition and areas of focus for the year ahead. To give you an idea of how inventive phishing attacks have become, they explain why it's best to be careful about brushing dust or hair off your phone's screen. Click the link or the image below to listen to the podcast.
Resources mentioned in this episode:
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First-of-its-Kind Study Identifies Drivers of Chronic Fraud Victimization
AARP, the FINRA Investor Education Foundation (FINRA Foundation) and Heart+Mind Strategies have released Addressing the Challenge of Chronic Fraud Victimization, a study identifying evidence-based ways to help repeat victims of financial fraud and their families. The study uses a behavior model to help illuminate factors that may contribute to repeat or chronic victimization by financial fraud schemes.
“The drivers behind chronic fraud victimization have remained a mystery, so this study is an important step to being able to stop the cycle,” said Kathy Stokes, director of fraud prevention programs and leader of the AARP Fraud Watch Network. “Chronic fraud can give targets and their families a sense of helplessness. By gaining a better understanding of the target’s drivers, we are hopeful there can be more meaningful interventions to disrupt and end the cycle.”
In 2020, the FINRA Foundation and the AARP Fraud Watch Network engaged Heart+Mind Strategies to deploy a four-phased study of chronic fraud victimization to uncover evidence-based concepts for effective interventions. The study’s goal was to generate new thinking on how to best support the individuals and families repeatedly targeted and victimized by financial scams and fraud. Researchers reviewed existing literature, interviewed subject matter experts, chronic victims of financial fraud, and family members of victims, and held two expert roundtables as a part of the study.
“This research provides a new lens through which to identify key intervention strategies that could disrupt the cycle of chronic fraud victimization at one or more points along the path to victimization,” said Gerri Walsh, President of the FINRA Foundation. “We hope it stimulates additional attention to the need for effective interventions that may reduce chronic fraud victimization.”
The study found that chronic fraud victimization may be a consequence of chronic susceptibility due to certain situational factors that disrupt judgement and derail good intentions. One of the most effective ways to reduce chronic fraud victimization may be to reduce chronic susceptibility, the study’s authors said. However, chronic susceptibility can be challenging to identify and address. The authors offer ideas for managing other factors, such as triggers that elicit an emotional response and the ability to access funds, which may be more scalable ways to reduce fraud victimization rates or counteract the negative consequences associated with victimization.
The study identified the importance of fraud education but acknowledged that many victims or would-be victims do not consider themselves as such, and consequently may not seek out or absorb anti-fraud messaging. So, creating more individualized in-the-moment education and intervention opportunities that partner with community leaders and locations from churches to hair salons could be effective.
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SEC Promotes Investor Awareness During National Financial Capability Month
April is National Financial Capability Month, and the Securities and Exchange Commission’s Office of Investor Education and Advocacy (OIEA) is embracing this opportunity to encourage all investors, especially first-timers or those relatively new to investing, to take the time to visit Investor.gov and utilize an array of resources to help them get acclimated.
Among some of the SEC’s latest resources to teach the importance of financial literacy and provide tips on how to avoid becoming a victim of investment fraud:
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On April 5, 2021, Anthony Wayne March, 49, of Wake Forest, NC, was sentenced to 135 months imprisonment for wire fraud and ordered to pay $6,040,965.00 in restitution. (See the full story above.) The Internal Revenue Service Criminal Investigation Division (IRS-CI), and the North Carolina Secretary of State, Securities Division conducted the investigation in this matter. The Office of the U.S. Bankruptcy Administrator for the Eastern District of North Carolina provided substantial assistance. Assistant United States Attorney Ethan Ontjes, Special Assistant United States Attorney Brian Behr, and Special Assistant United States Attorney Kevin Harrington represent the United States.
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On March 26, 2021, the Securities Division of the North Carolina Department of the Secretary of State issued a Temporary Cease and Desist Order to Respondents, Roy Neil Carlson and Carlson Financial Services, LLC. The order found Respondents were transacting business in the State of North Carolina in violation of the North Carolina Investment Advisers Act. The Temporary Order to Cease and Desist ordered each Respondent and any person, employee, officer, director, entity or independent contractor under the direction or control of Respondents, to immediately cease and desist from violating the anti-fraud provisions of the Investment Advisers Act, soliciting or providing investment advice to any prospective or current advisory clients, making or causing to be made any misleading filing to the Administrator and otherwise holding itself out to be or engaged in the business of an investment adviser or investment adviser representative. The Temporary Order to Cease and Desist gives Respondents 30 days in which to request a hearing. If no such request is made during that time, the Temporary Order to Cease and Desist shall become final. For more information, click here.
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On March 15, 2021, Charles Gilbert Murphy, a serial fraudster from Apex, NC, was sent back to federal prison to serve 75 months for an investment scam involving impersonation of a mayor, professor, and a government agency. The investigation was conducted by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation, and the North Carolina Secretary of State's Securities Division. For more information, see this press release.
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On January 7, 2021, the Temporary Cease and Desist Order entered on November 9, 2020 (below) against Claybourne Glenn Bass and Claybourne Glenn Bass, LLC (the "Bass Respondents") became final, permanently barring the Bass Respondents from among other things, soliciting for purchase, offering or selling securities in North Carolina until such time as they become fully compliant with North Carolina's securities laws. For more information, click here.
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On November 9, 2020, the Securities Division of the North Carolina Department of the Secretary of State issued a Temporary Cease and Desist Order to respondents, Claybourne Glenn Bass and Claybourne Glen Bass, LLC. The order found the respondents were transacting business in the State of North Carolina in violation of the North Carolina Securities Act. The Temporary Order to Cease and Desist ordered each respondent to immediately cease and desist from violating the anti-fraud provisions of the Securities Act; entering into investment contracts with the public; offering for sale, soliciting offers to purchase, or selling, any security and otherwise holding itself out to be or engaging in the business of securities dealer or salesman. The Temporary Order to Cease and Desist gives respondents 30 days in which to request a hearing. If no such request is made during that time, the Temporary Order to Cease and Desist shall become final. For more information, click here.
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On September 8, 2020, a federal grand jury returned a superseding indictment charging Joshua Matthew Houchins, 36, of Sanford, NC, with fraud, money laundering, obstruction of justice and firearms offenses. The charges were announced today in federal court. The Federal Bureau of Investigation and the North Carolina Secretary of State are investigating the case. The Wake County Sheriff’s Office, Apex Police Department, and Sanford Police Department, also provided assistance. Assistant U.S. Attorney William M. Gilmore is prosecuting the case. An indictment is merely an accusation. The defendant is presumed innocent until proven guilty. For more information, please see this press release.
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On August 13, 2020, Mark Colin Ramsey, 50, of Graham, N.C., was sentenced to 65 months in prison for operating a $1.1 million investment scheme. U.S. District Judge Martin Reidinger also ordered Ramsey to serve three years of supervised release and to pay restitution in the amount of $1,098,333.92. North Carolina Secretary of State Elaine F. Marshall joins U.S. Attorney Andrew Murray in making this announcement. According to filed court documents and statements made in court, from April 2008 to September 2013, Ramsey defrauded more than 20 victims out of nearly $1.1 million through a fraudulent investment scheme. In making the announcement, U.S Attorney Murray thanked the Securities Division of the North Carolina Department of the Secretary of State for their investigation of this case. For more information, please see this press release.
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NC Department of the Secretary of State
Securities Division
Investor Protection & Education Services
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