AARP North Carolina Tele-Town Hall on Protecting Your Financial Data |
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Secretary Marshall and Investor Education Director John Maron discussed the work of the Secretary of State's Office in a longform interview with Lea Strickland for “Focus on Business” radio.
The interview covered our ongoing historic increase in business creation filings and a wide-ranging conversation about our work in regulating securities, including details about securities offerings and crowdfunding. You can watch the interview in its entirety here.
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The Investor Protection Trust and PBS Books’ virtual series on achieving financial freedom continues today at 1 p.m., with the latest installment of “When I’m 65”. Tune in to hear a panel of financial experts talk about strategies for reducing your debt, growing your savings and creating passive income for you and your family to allow you to grow your retirement nest egg.
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A New Era of Entrepreneurship: Business Creations in North Carolina Seeing Unprecedented Growth in 2021
Along with its work regulating securities and protecting the investing public in North Carolina, the NC Secretary of State’s Office is also where people go to incorporate their businesses. And the historic surge in new business creation filings that began in 2020 is continuing and accelerating in 2021.
Filings for new business creations are far outpacing 2020’s unprecedented numbers, with 96,000 new business creation filings processed between January and the end of June – an 80% increase over the same period last year.
The Department’s survey of new businesses created one year ago indicates that 89% of them are still in business, with 22% reporting that they have three or more employees.
The torrid rate of new business creations is as high as 211% in some counties.
“It’s particularly gratifying to see that several Tier 1 counties – including Scotland County and Edgecombe County – that have been identified in the state’s economic tier system as being under the most economic distress, are among the counties experiencing the highest growth in new business creations,” said Secretary of State Elaine Marshall.
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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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Are You an Informed Investor?
Expense Ratios
Mutual funds and exchange traded funds (ETFs) offer investors a cost-efficient way to invest in professionally managed portfolios of securities. While it is often tempting to make a purchase based on a fund’s historical performance, informed investors know that past performance is no guarantee of future performance, and that they must review a fund’s prospectus, shareholder reports and portfolio holdings to see if the fund’s risk/return profile aligns with theirs. An informed investor will pay particular attention to a fund’s expense ratio, which, over time, can eat into a fund’s earnings significantly. Click the image to download a copy of this alert. Browse all of our investor education brochures by clicking here.
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Cybercrime Support Network
The Cybercrime Support Network (CSN) is a public-private, nonprofit collaboration whose mission is to serve individuals and small businesses impacted by cybercrime.
CSN is the first nationwide initiative developed to help cybercrime victims through a process of “Recognize, Report, and Recover” after an incident occurs. Browse their free Cyber Resource Catalog. From there you can search their index of cybercrime resources by type of Threat (e.g. Identity Theft, Phishing), target Audience (e.g. Seniors, Military, Child and Teen), or Keyword. The search will return any resources that meet ALL of the criteria you enter. Resources include contact information for support organizations as well as education and awareness materials, which may be items CSN has developed itself or items from other reputable organizations.
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U.S. Government Launches First One-Stop Ransomware Resource
With the risk of ransomware posing increasing risks to everything from small business to critical infrastructure and national security, federal agencies have launched a new website to combat the looming threat.
StopRansomware.gov is a one-stop hub for resources for individuals, businesses, and other organizations. This collaboration is the first joint website created to help private and public organizations mitigate their ransomware risk.
From free scanning and testing services provided by CISA to help organizations assess, identify and reduce their exposure to ransomware and other threats to a checklist for responding the ransomware attacks, the site has a wealth of critical cybersecurity resources.
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Understanding CMMC: The Emerging Gold Standard For Security |
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The Cybersecurity Maturity Model Certification (CMMC) is becoming increasingly important for businesses that are part of the cybersecurity workforce. Join the National Cyber Security Alliance and Redspin on Tuesday, August 3 at 2 p.m. ET for an overview of CMMC and what CMMC compliance entails.
This webinar will cover:
- CMMC requirements and advantages for SMBs to comply with this new certification
- How to prepare and lessons learned from RedSpin to guide your process
- How CMMC improves your company's Risk Management
Cybersecurity veteran Caleb Barlow, CEO and President at Redspin, will outline the importance of this emerging gold standard in security. Barlow will also share high-level lessons learned from RedSpin’s CMMC assessment and how this framework validates the effectiveness of your risk management program, ensuring you have an approach that responds to threats and risk every day.
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FINRA Launches Educational Initiative Aimed at Newer Investors
FINRA has announced the launch of a multi-year, multi-faceted $30 million initiative to explore innovative ways to reach and educate investors, especially new, self-directed retail investors who conduct transactions through online accounts or using mobile apps.
As phase one of the initiative, FINRA and the FINRA Investor Education Foundation (FINRA Foundation) issued a Special Notice soliciting input from firms, investors, investor advocates, academics and other stakeholders concerning effective ways to reach these new investors. Comments are requested by August 30, 2021.
During phase two, FINRA and the FINRA Foundation will launch a comprehensive program aimed at educating this rapidly-growing segment of novice retail investors who are leveraging advancements in technology to enter U.S. securities markets.
“Greater retail investor participation in our securities markets creates greater opportunity for these investors to accumulate wealth and achieve their long-term financial goals,” said Robert Cook, President and Chief Executive Officer of FINRA and Chair of the FINRA Foundation. “It is critical that newer investors understand both the benefits and the risks of participating in the financial markets. I am pleased that FINRA’s Board of Governors approved an initial investment of $30 million dedicated to help educate this segment of our investor population.”
Earlier this year, the FINRA Foundation published a study, Investing 2020: New Accounts and the People Who Opened Them, which found that newer investors had lower levels of financial knowledge relative to experienced investors. The data also showed that market dips that made stocks cheaper to buy and the ability to invest with small amounts were among the top reasons new investors reported entering the stock market. And, for respondents who opened new accounts in 2020, investing for retirement was the most frequently cited reason for opening the account.
In response, FINRA and the FINRA Foundation request comments on effective ways to educate investors, including which methods of reaching investors have worked best to increase investor knowledge among self-directed retail investors.
According to the FINRA Foundation’s latest investor survey, investor knowledge in the U.S. is low among all investors and many are confused about the various fees they pay for investing.
“It is imperative that we effectively reach all investors, and especially the newest generation of investors who are more comfortable trading on smartphones and more likely to seek input on investment decisions from friends, family and online sources,” said Gerri Walsh, President of the FINRA Foundation. “We know that engaging people in educational experiences, whether face-to-face or mediated by technology, can be challenging—and that is why we welcome feedback from a diverse array of stakeholders on how best to reach those who opt not to work with registered financial professionals.”
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The SEC, FINRA and NASAA Offer Free Resource to Securities Firms to Assist in Detection, Prevention and Reporting of Financial Exploitation of Seniors
The U.S. Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and the North American Securities Administrators Association (NASAA) have announced a new resource intended to assist securities firms in implementing the training requirements of the Senior Safe Act.
The training program, “Addressing and Reporting Financial Exploitation of Senior and Vulnerable Adult Investors,” can be used by firms to train associated persons on how to detect, prevent, and report financial exploitation of senior and vulnerable adult investors. The presentation serves as a resource for firms implementing the requirements of the Senior Safe Act and certain state training requirements relating to senior investment protection.
The Senior Safe Act was included as Section 303 of the Economic Growth, Regulatory Relief, and Consumer Protection Act, which was signed into law on May 24, 2018. The Act addresses barriers financial professionals face in reporting suspected senior financial exploitation or abuse to authorities. Specifically, the Act protects “covered financial institutions” – which include investment advisers, broker-dealers, and transfer agents – and their eligible employees, affiliated persons, and associated persons from liability in any civil or administrative proceeding for reporting a case of potential exploitation of a senior citizen to a covered agency.
The immunity established by the Act is provided on the condition that employees receive training on how to identify and report exploitative activity against seniors before making a report. In addition, reports of suspected exploitation must be made “in good faith” and “with reasonable care.” This immunity applies to both individuals and firms.
“FINRA has a longstanding commitment to protecting senior investors through various regulatory programs and initiatives,” said Robert W. Cook, FINRA President and CEO. “FINRA is pleased to collaborate with NASAA and the SEC to provide this free resource to firms as we collectively work to support implementation of the Senior Safe Act and better protect senior and vulnerable adult investors.”
“By partnering with FINRA and NASAA to offer this training program, we can help educate financial professionals on how to identify and report financial abuse of older adults,” said SEC Chair Gary Gensler. “The SEC also strongly encourages all investors to utilize the education resources on sec.gov to ensure they are working with a registered investment professional.”
“We are pleased to work collaboratively with our counterparts at the SEC and FINRA to provide this important training resource in the hope that it will promote greater and earlier detection and reporting of suspected financial exploitation of older Americans,” said Lisa A. Hopkins, NASAA President and Senior Deputy Commissioner of Securities and General Counsel with the West Virginia State Auditor’s Office.
The training presentation is available on the SEC’s website.
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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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