News & Publications

Nexo Settlement

Publication Date: Feb 14, 2023

NDBF Joins with State Securities Regulators and SEC in a $45 Million Settlement with Nexo Capital Over Interest-Bearing Accounts

February 14, 2023 (Lincoln, NE) – The Nebraska Department of Banking & Finance (NDBF) will receive a payment of $424,528.30 from Nexo Capital, Inc. (Nexo) after entering a Consent Order with Nexo. The NDBF joined other state securities regulators and the U.S. Securities Exchange Commission (SEC) in this $45 million settlement with Nexo.

In the past year, a North American Securities Administrators Association (“NASAA”) working group of state regulators conducted a comprehensive investigation into Nexo’s alleged offer and sale of unregistered securities in the form of its Earned Interest Product (EIP).

Nexo is a Cayman Islands corporation established in 2018 that provides virtual currency-related financial services to retail and institutional borrowers in the United States, including trading, borrowing, and lending services. During the investigation, it was discovered that EIP investors could passively earn interest on digital assets by loaning those assets to Nexo. This included 346 Nebraska EIP accounts with a value of $2,480,000 as of July 31, 2022. Nexo maintained total discretion over the revenue-generating activities utilized to earn returns for investors. The company offered and promoted the EIP and other products to investors in the U.S. via its website and social media channels suggesting in some instances that investors could obtain returns as high as 36%.

Nexo is alleged to have failed to comply with state registration requirements and, as a result, investors were sold unregistered securities in violation of state law and additionally were deprived of critical information and disclosures necessary to understand the potential risks of the EIP.

“Securities laws are designed to protect investors through full and fair disclosure and the registration of securities is essential to that protection.” said NDBF Deputy Director Claire McHenry. “State securities regulators continue to lead the effort to ensure companies involved in offering digital asset investments comply with our laws and that investors are treated fairly.”

For the states participating in the settlement, Nexo will pay a fine of $424,528.30 and cease offering and selling the EIP or accepting further investments in the EIP until such activities are compliant with applicable state and federal securities laws. For any EIP accounts, savings wallets, and non-collateral wallets held by Nebraska residents after April 1, 2023, Nexo will assist customers with any withdrawals or transfers.

NDBF would like to thank its fellow NASAA member agencies, especially the multistate working group, for its coordinated efforts and the SEC for their collaboration and assistance.

NDBF encourages Nebraskans to review financial opportunities carefully and to check the registration status of the investment and the person offering it by visiting ndbf.nebraska.gov.

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Nexo Press Release 02-14-2023

First SOJO and Jesse Hill

Publication Date: Dec 29, 2022

NDBF and the Office of the Nebraska Attorney General file for Injunctive and Other Relief against First SOJO Capital Group, LLC and Jesse Hill for Violations of the Securities Act

December 29, 2022 (Lincoln, NE) – The Nebraska Department of Banking and Finance (NDBF) announced today that the Office of the Attorney General filed a Complaint for Injunctive and Other Relief in the District Court of Lancaster County against Jesse Hill, First SOJO Capital Group, LLC, and related entities under the Securities Act of Nebraska. The State requested that the Court enter a temporary restraining order freezing certain assets and enjoining Hill, First SOJO Capital Group, LLC, and the related entities from violating the Securities Act. The temporary restraining order was granted by the Court late last night. The complaint also seeks the appointment of a receiver to protect investor assets, and recission, restitution, or disgorgement as appropriate.

First SOJO Capital Group, LLC is a registered investment adviser in the State of Nebraska that manages two pooled investment vehicles, Outlier Fund I, LP, and Outlier Fund II, LP. Hill is the managing member and manager for First SOJO Capital Group, LLC. Hill was previously the subject of a NDBF Consent Order in October 2018 where Hill raised money and managed a pooled investment vehicle through an entity named JT Equity Trading, LLC without being registered as required by the Securities Act of Nebraska.

The complaint alleges that Hill executed false control agreements with financial institutions regarding Aaron Marshbanks’ and Marshbanks’ limited liability companies’ investments, which enabled Marshbanks to obtain loans and lines of credit from financial institutions. The complaint also alleges Outlier Fund I, LP, and Outlier Fund II, LP incurred sizable trading losses in January and February 2022. Despite these significant losses, the complaint alleges that Hill continued to misrepresent the value of the investments and has promised investors they will receive a return on their investment. The complaint alleges that Hill violated the prior Consent Order with NDBF, and that First SOJO Capital Group, LLC is currently insolvent and is in violation of other provisions of the Securities Act of Nebraska. The complaint also names JT Equity Trading, LLC, Outlier Fund I, LP, Outlier Fund II, LP, and Tabitha Hill, for purposes of obtaining relief.

NDBF’s investigations to determine compliance with the laws under its supervision are ongoing in this matter.

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File for Relief Against First SOJO and Jesse Hill

NDBF Cautions Investors on the Rise of the “Finfluencers”

Publication Date: Nov 8, 2022

NDBF Cautions Investors on the Rise of the “Finfluencers”

November 8, 2022 (LINCOLN, NE)— The Nebraska Department of Banking and Finance (“NDBF”) is joining the North American Securities Administrators Association (“NASAA”) in releasing an Informed Investor Advisory that recommends investors use caution when considering advice from social media financial influencers, or “finfluencers.”

A finfluencer is a person who, by virtue of their popular or cultural status, has the capability to influence the financial decision-making process of others through promotions or recommendations on social media, according to the Informed Investor Advisory. They may seek to influence potential investors by publishing posts or videos to their social media accounts, often stylized to be entertaining so that the post or video will be shared with other potential investors.

“More and more people are turning to social media to get investment advice. Nebraska investors would be wise to consider the source of any unsolicited financial advice and treat any decision with careful consideration before making an investment,” said NDBF Deputy Director Claire McHenry. “Investors should keep in mind that influencers are not subject to the same regulations as licensed financial professionals and may have undisclosed conflicts of interest.”

The advisory includes information to help investors better understand how influencers operate, what to consider when coming across financial advice on social media, and where to go for help with concerns about a possible finfluencer. The advisory also points out red flags to consider including dubious advice, unverifiable or outdated financial credentials, or investment recommendations not backed up by accurate data.

NDBF encourages Nebraskans to review financial opportunities on social media carefully and to check the registration status of the investment and the person offering it by visiting ndbf.nebraska.gov. “Be wary of content on social media promising big or guaranteed returns with little or no risk. If it sounds too good to be true, it probably is,” said Deputy Director McHenry.

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Informed Investor Advisory Finfluencer

11.08.22 Finfluencer.pdf

Investment Adviser and Broker-Dealer December 31, 2022 Renewal Deadline

Publication Date: Nov 1, 2022

NDBF REMINDS INVESTMENT ADVISERS, BROKER-DEALERS OF DECEMBER 31, 2022 RENEWAL DEADLINE

November 1, 2022 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance ("NDBF") reminds state-registered investment advisers, broker-dealers, and their agents and representatives that registrations in Nebraska expire on December 31, 2022. Firms will need to assemble required documentation and review filings to insure all information is accurate and up-to-date. Failure to submit supplements or provide required information by the appropriate deadline will result in the termination of the registration on January 1, 2023.

The Department will again be utilizing ShareFile for firms to submit all supplements and correspondence. The Department will send out a secure ShareFile link, unique to each firm, with the initial Notification dated November 1, 2022. If for some reason you do not receive the notification, please email the department at DOB.SecuritiesBureau@Nebraska.gov to request a link.

FINRA Broker-Dealers and Agents please adhere FINRA’s 2023 Annual Renewal Program and Timeline.

State-registered investment adviser and investment adviser representative deadlines:

• By December 16, 2022 – Submit Nebraska specific forms and documentation to NDBF

• Before December 22, 2022 – Submit renewal payments through CRD/IARD

Non-FINRA Broker-Dealers and Agents must submit all required forms and documentation to NDBF by December 16, 2022, via ShareFile link. The Department encourages firms to remit fees electronically via ACH if possible.

NDBF REMINDS INVESTMENT ADVISERS, BROKER-DEALERS OF 12/31/22 RENEWAL DEADLINE

Publication Date: Nov 1, 2022

NDBF will again be utilizing ShareFile for firms to submit all supplements and correspondence. NDBF will send out a secure ShareFile link, unique to each firm, with the initial Notification dated November 1, 2022. If you do not receive the notification, please email NDBF at DOB.SecuritiesBureau@Nebraska.gov to request a link.

FINRA Broker-Dealers and Agents please adhere to FINRA’s 2023 Annual Renewal Program and Timeline.

State-registered Investment Adviser and Investment Adviser Representative deadlines:

• By December 16, 2022 – Submit Nebraska specific forms and documentation to NDBF

• Before December 22, 2022 – Submit renewal payments through CRD/IARD

June 15 Recognized as World Elder Abuse Awareness Day

Publication Date: Jun 15, 2022

CONTACT Claire McHenry, Deputy Director – Securities Bureau

PHONE 402-471-2171

EMAIL claire.mchenry@nebraska.gov

NDBF Recognizes June 15 as World Elder Abuse Awareness Day, Urges Nebraskans to Establish a Trusted Contact

June 15, 2022 (LINCOLN, NE)— In recognition of World Elder Abuse Awareness Day (WEAAD) on June 15th, the Nebraska Department of Banking and Finance (NDBF) reminds Nebraskans and financial professionals to be on the lookout for signs of elder financial abuse. To help protect Nebraska investors, NDBF has joined the North American Securities Administrators Association (NASAA) campaign urging Nebraskans to provide their financial firms with a trusted contact.

“Investors can take steps to help safeguard their investments from potential fraud by creating an extra layer of protection with a trusted contact,” said NDBF Deputy Director Claire McHenry. “Your investment professional can help you in getting a trusted contact in place for your accounts.”

A trusted contact is an individual authorized by an investor to be contacted by their financial firm in limited circumstances. These circumstances can include concerns about activity in the investor’s account or if the firm has been unable to reach the investor after numerous attempts. A trusted contact may be a family member, attorney, accountant or another reliable third party; investors may establish more than one trusted contact and may add or change a trusted contact at any time.

Importantly, a trusted contact:

Cannot make trades in the investor’s account.
Cannot make decisions about the investor’s account; and
Does not become a power of attorney, legal guardian, trustee or executor by virtue of being identified as a trusted contact.

To learn more about setting up a trusted contact, financial firms and investors are encouraged to review materials available at www.nasaa.org/trust-contact.

Before making any financial decisions, ask questions, do your homework, and visit our website at ndbf.nebraska.gov or contact NDBF at 402-471-2171 for more information.

WEAAD - Trusted Contact.pdf

NDBF and State Securities Regulators Settle with BlockFi

Publication Date: Apr 7, 2022

FOR IMMEDIATE RELEASE

CONTACT Claire McHenry, Deputy Director – Securities Bureau

Phone 402-471-2171

Email claire.mchenry@nebraska.gov

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NDBF Joins with State Securities Regulators and the US Securities and Exchange Commission to Settle with Digital Asset Lending Platform BlockFi for Sales of Unregistered Securities

April 7, 2022 – The Nebraska Department of Banking and Finance (NDBF) today announced that a digital-asset financial services company, BlockFi Lending LLC (BlockFi), agreed to enter into a consent order with NDBF to settle offers and sales of unregistered securities in the form of interest-bearing digital asset deposit accounts called BlockFi Interest Accounts (BIAs) to Nebraska residents. As of December 31, 2021, BlockFi had 407,030 BIA investors in the US, of which more than 1,624 were Nebraska residents.

BlockFi agreed to pay $50 million to the 53 member agencies of the North American Securities Administrators Association (NASAA) and $50 million to the Securities and Exchange Commission (SEC) to settle its offers and sales of unregistered securities. The 53 NASAA member agencies will share equally in their half of the settlement. BlockFi will pay NDBF $943,396.22 to remedy its past unregistered offer and sale of securities to Nebraska residents.

Beginning January 2021, NASAA member agencies in a multistate working group contacted BlockFi and provided notice that the company may have offered and sold securities not in compliance with state securities laws. In July and September 2021, Alabama, Kentucky, New Jersey, Texas, Vermont, and Washington filed actions against BlockFi concerning its offer and sale of unregistered securities. As alleged in the state securities actions, BlockFi promoted its BIAs with promises of high returns for investors who purchased the lending products. It took control of and pooled its investors’ loaned digital assets, and exercised sole discretion over the pooled digital assets, including how to use the digital assets to generate a return and pay investors their promised interest. According to the filed state actions, BlockFi failed to comply with state registration requirements and, as a result, investors were sold unregistered securities in violation of state law and deprived of critical information and disclosure necessary to understand the potential risks of these lending products.

BlockFi’s agreement to enter into a settlement with NDBF comes amidst rising concerns over the proliferation of “decentralized” and digital asset-based financial products and services targeting retail investors. Many of these products and services are analogous to traditional financial services offered by banks and brokerages, but without any of the regulatory safeguards provided by registered firms and products. For example, registered firms must truthfully disclose all known material facts and explain the risks associated with their investments, while the Federal Deposit Insurance Corporation, National Credit Union Administration, and the Securities Investor Protection Corporation insure depositors and investors against certain kinds of losses. Financial service firms operating in innovative fintech markets may not be complying with important laws that protect retail clients, and investors may not have access to the information necessary to conduct due diligence and make fully informed decisions.

“State securities regulators recognize the value new technology brings to financial markets. Complying with existing laws and regulations promotes competitive capital markets and continued investor protection,” said NDBF Deputy Director Claire McHenry. “This action by NASAA member agencies and the SEC sets an example for other firms providing digital asset financial products and services of how to work toward complying with state and federal law.”

BlockFi has stopped offering its BIAs to the public. BlockFi’s parent company, BlockFi Inc., represents it intends to file with state and federal regulators to offer and sell a new product called BlockFi Yield. As part of the settlement terms, BlockFi has ceased allowing new investments in the BIAs and will not allow new investments until its securities are properly registered. BlockFi may continue to deploy digital assets for existing BIA investors and may continue to pay interest. Between February 14 and the date BlockFi Inc.’s securities are registered and qualified or permitted for sale with the states and SEC, current investors may keep their existing investments with BlockFi and will continue to earn interest under their initial agreement with the company. This measure is designed to protect the interests of existing investors while allowing BlockFi time to bring itself into compliance with state and federal law.

NDBF is continuing to consider enforcement actions against firms that fail to comply with state law. Firms that need to register and deal with past unregistered activity should contact their state and federal regulators. NDBF can be contacted at 402-471-2171.

NDBF would like to thank its fellow NASAA member agencies, especially the multistate working group, for its coordinated efforts and the SEC for their collaboration and assistance.

4.07.22 BlockFi Final.pdf

BlockFi Lending Findings of Fact Conclusions of Law and Consent Order.pdf

Governor Ricketts Proclaims April Financial Awareness Month

Publication Date: Mar 24, 2022

FOR IMMEDIATE RELEASE

CONTACT Kelly Lammers, Director

Phone 402-471-2171

Email kelly.lammers@nebraska.gov

Governor Ricketts Proclaims April as Financial Awareness Month, State Capitol to turn Green

March 24, 2022 (LINCOLN, NE) – Today Gov. Pete Ricketts proclaimed the month of April as Financial Awareness Month in Nebraska. The proclamation recognizes the importance of financial awareness to Nebraskans and that Nebraska is a leader in financial innovation, financial literacy education, and consumer and vulnerable adult protection. Additionally, the Nebraska Capitol will be lit up in green for Financial Awareness Month on April 1-3.

The month-long financial awareness campaign is an initiative from the Nebraska Council of Economic Education (NCEE) and the Nebraska Department of Banking and Finance (NDBF). Nebraska banks, credit unions, securities professionals, state agencies, consumer groups, and private sector organizations are conducting a variety of educational activities in schools, workplaces, and communities to educate Nebraskans about the importance of setting goals, making wise financial decisions, and protecting yourself and your financial future.

“Whether you are just starting out, or have been saving and investing for some time, April is a great opportunity to review your financial health and awareness. Consider working with a bank, credit union, or registered securities professional to help protect and grow your finances,” said NDBF Director Kelly Lammers. “There have been a number of recent financial initiatives, from the Financial Innovation Act to added consumer protections for vulnerable and senior adults. It’s important to review the basics as well as learn about new products like cryptocurrencies and digital assets to improve your financial awareness.”

“We at NCEE primarily focus on K-12 financial education. If we can reach kids early and install good financial habits, we have changed their financial futures. I encourage everyone to engage with something during this April Financial Awareness Month. Financial literacy is a life-long pursuit. No matter what age and stage you’re at, we can always do something to better our financial position,” said NCEE president, Dr. Jennifer Davidson.

NDBF Director Lammers and Dr. Jennifer Davidson, President of NCEE, encourage all Nebraskans to take part in financial awareness efforts offered by NCEE, NDBF, and other organizations, including:

The Nebraska Council on Economic Education is the premiere organization providing economic and financial education and resources to Nebraska. NCEE programming and resources can be found at http://nebraskacouncil.unl.edu and http://nceefinance.org.
NDBF has information and four new My MoNEy videos on financial education topics at https://ndbf.nebraska.gov/consumers/consumer-resources.
The Office of the Nebraska Attorney General has information on how to protect yourself from identity theft and scams at https://ProtectTheGoodLife.Nebraska.gov.
The Nebraska State Treasurer’s Office, in partnership with NCEE, has a new a new, robust and personalized financial education learning center, Enrich. https://nast.enrich.org/landing/nast-start-nebraska
The Nebraska Bankers Association and its 162 member banks are pleased to support Nebraska Financial Awareness Month. Nebraska banks are committed to improving financial literacy in the communities they serve. They sponsor programs and offer tools to help Nebraskans of all ages improve their financial decision-making and reach their financial goals. Individuals and families who have a solid financial education foundation are more likely to purchase a home, save for college and invest which, in turn, helps Nebraska communities thrive. Nebraska banks are also watching out for their customers. They pushed for the passage of legislation that allows them to place a hold on a transaction if they suspect a vulnerable customer is a victim of financial exploitation.
For the Nebraska Credit Union League, promoting financial well-being for all is a critical component in the fulfilment of the credit union mission of People Helping People. Financially healthy credit union members lead to healthy credit unions and healthy communities. Financial well-being isn’t “a thing” credit unions do. It is “the thing.”
FPA of Nebraska is a professional organization for Certified Financial Planners™ and supports various financial literacy programs through Junior Achievement and other initiatives.
Nebraska Independent Community Bankers encourages Nebraskans to talk about financial needs and solutions with the local Community Bank in April and thereafter whenever questions arise. AARP encourages Nebraskans to visit the AARP Fraud Watch Network at www.aarp.org/fraudwatchnetwork or call the AARP Fraud Watch Network Helpline at 1-877-908-3360 to report a scam or get help if you’ve fallen victim.
Future Business Leaders of America (FBLA-PBL) is a national career and technical student organization for students in middle school, high school, and college who are interested in business administration, business education, management, finance, and information technology careers. Over 5800 students in more than 150 secondary schools and 13 postsecondary schools in Nebraska participate in the FBLA-PBL organization. FBLA offers over 15 competitive events in the finance career field to include financial literacy. Benefits of FBLA membership are leadership development, career preparation, community service, networking with business and community leaders, and challenging competitions.

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NDBF Financial Awareness Month 2022 Press Release.pdf

Multistate SAFE Act MLO Settlement

Publication Date: Feb 16, 2022

State Regulators Settle with Hundreds of Mortgage Loan Originators over SAFE Act Education Requirements

Feb. 15, 2022 (LINCOLN, NE) – The Nebraska Department of Banking and Finance (NDBF), and financial regulatory agencies from 41 other states reached settlements with 441 mortgage loan originators nationwide who deceptively claimed to have completed annual continuing education as required under state and federal law.

Through the settlements, the mortgage loan originators agreed to surrender their licenses for a period of three months, pay a fine of $1,000 for each state in which he or she holds a license and take continuing education beyond Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) requirements.

NDBF Director Kelly Lammers said, “The Department’s mission is to protect and maintain the confidence in the financial industries of Nebraska. These settlements show that Nebraska consumers can be confident that the mortgage loan originators they work with follow the law and are monitored for regulatory compliance.”

Congress enacted the SAFE Act to enhance consumer protection and reduce fraud through minimum standards for the licensing and registration of state-licensed mortgage loan originators. The law calls on the states to implement and enforce these standards, and every state has enacted its own version of the SAFE Act that requires mortgage loan originators to have at least 20 hours of pre-licensing education and an annual eight hours of continuing education.

Danny Yen, owner of Carlsbad, Calif.-based course provider Real Estate Educational Services, is facing administrative enforcement actions for both providing false certificates and taking courses on behalf of mortgage loan originators through other education providers in violation of the SAFE Act.

The irregular education activity was discovered through a gesture-driven authentication tool called BioSig-ID, which is used to monitor all online courses approved under the SAFE Act mandate.

Contact: William Lawrence, Consumer Finance Counsel
Phone: 402-471-2171
Email: DOB.Mortgage@nebraska.gov

NDBF REES Settlements News Release.pdf

Top Investor Threats

Publication Date: Jan 14, 2022

CONTACT Claire McHenry, Deputy Director – Securities Bureau

PHONE 402-471-2171

EMAIL claire.mchenry@nebraska.gov

Top Investor Threats

January 10, 2022 (LINCOLN, NE)— The Nebraska Department of Banking and Finance (NDBF) today released an annual list of top investor threats and urged caution before purchasing popular and volatile unregulated investments – especially those involving cryptocurrency and digital assets. NDBF also announced guidance for investors, including steps to take to protect from fraud in the new year.

“NDBF revealed that investments related to cryptocurrencies and digital assets is our top investor threat,” said NDBF Deputy Director Claire McHenry. “Stories of ‘crypto millionaires’ attracted some investors to try their hand at investing in cryptocurrencies or crypto-related investments this year, and with them, many stories of those who bet big and lost big began appearing, and they will continue to appear in 2022.”

The top 2022 threats were determined by a survey of securities regulators conducted by the North American Securities Administrators Association (NASAA). The annual survey is designed to identify the most problematic products, practices or schemes facing investors. The following were cited most often by state and provincial securities regulators:

Investments tied to cryptocurrencies and digital assets,
Fraud offerings related to promissory notes,
Money scams offered through social media and internet investment offers, and,
Financial schemes connected to Self-Directed Individual Retirement Accounts.

“Many of the fraud threats facing investors today involve private offerings, as federal law exempts these securities from registration requirements and preempts states from enforcing important investor protection laws.” Deputy Director McHenry added, “Unregistered private offerings generally are high-risk investments and don’t have the same investor protection requirements as those sold through public markets.”

Investors are urged to practice the following tips to identify and avoid investment scams:

Anyone can be anyone on the Internet. Scammers are spoofing websites and using fake social media accounts to their identities. Investors should always take steps to identify phony accounts by looking closely at content, analyzing dates of inception and considering the quality of engagement. To ensure investors do not accidently deal with an imposter firm, pay careful attention to domain names and learn more about how to protect your online accounts.
Beware of fake client reviews. Scammers often reference or publish positive, yet bogus testimonials purportedly drafted by satisfied customers. These testimonials create the appearance the promoter is reliable – he or she has already earned significant profits in the past, and new investors can reap the same financial benefits as prior investors. In many cases, though, the reviews are drafted not by a satisfied customer but by the scammer. Learn how to protect yourself with NASAA’s Informed Investor Advisory on social media, online trading and investing.
If it sounds too good to be true, it probably is. Bad actors often entice new investors by promising the payment of safe, lucrative, guaranteed returns over relatively short terms – sometimes measured in hours or days instead of months or years. These representations are often a red flag for fraud, as all investments carry some degree of risk, and the potential profits are typically correlated with the degree of risk. Learn more about the warning signs of investment fraud.

NDBF recommends investors independently research registration of investment firms. They should not use hyperlinks provided by the parties and instead contact their state securities regulator, search the SEC’s Investment Adviser Public Disclosure website or FINRA’s BrokerCheck platform. Investors should be aware that scammers may misappropriate the CRD numbers of registered firms and individuals. Investors should contact their regulator if they suspect the firm is engaging in this type of tactic and confirm CRD numbers.

Individuals offering investments are obligated to truthfully disclose all material facts, and they must disclose the risks associated with each product. On the other hand, bad actors will often minimize or conceal risks, and use hyperbole to tout profits and payouts. Investors should pay attention to these details, as they can provide clues about the potential illegitimacy of a scam.

Bad actors may be impersonating licensed parties by using phony websites that place viruses or malicious software on victim’s computers. Investors should continue to observe best practices for cybersecurity. The FDIC has issued guidance to assist consumers in protecting themselves from cyber-attacks.

Before making any financial decisions, ask questions, do your homework, and contact Nebraska Department of Banking and Finance at 402-471-2171 or visit our website at ndbf.nebraska.gov for more information.

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Top Investor Threats

2022 IA and BD Renewal Deadline

Publication Date: Nov 1, 2021

NDBF REMINDS INVESTMENT ADVISERS, BROKER-DEALERS OF DECEMBER 31, 2021 RENEWAL DEADLINE

November 1, 2021 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance ("NDBF") reminds state-registered investment advisers, broker-dealers, and their agents and representatives that registrations in Nebraska expire on December 31, 2021. Firms will need to assemble required documentation and review filings to make sure information is accurate and up-to-date. Failure to submit filings or provide required information by the appropriate deadline will result in the termination of the registration on January 1, 2022.

State-registered investment adviser and investment adviser representative deadlines:

• By December 17, 2021 – Submit Nebraska specific forms and documentation to NDBF

• Before December 13, 2021 – Submit renewal payments through CRD/IARD

• Before December 26, 2021 – Submit required electronic form filings through CRD/IARD

FINRA broker-dealer and agent deadlines:

• Before December 26, 2021 – Submit renewal payments through CRD/IARD

• Before December 26, 2021 – Submit required electronic form filings through CRD/IARD

Non-FINRA Broker-Dealers and agents must submit all required forms and documentation to NDBF by December 17, 2021

2022 Annual Renewal Program Letter-1.pdf

2022 IA Renewal Notice and Checklist fillable.pdf

2022 Non FINRA Renewal Notice and Checklist fillable.pdf

NDBF Now Accepting Online Franchise Filings, Business Opportunites

Publication Date: Sep 20, 2021

Contact: Claire McHenry, Deputy Director – Securities Bureau

Phone: 402-471-2171

Email: claire.mchenry@nebraska.gov

NDBF NOW ACCEPTING ONLINE FILING FOR FRANCHISES, BUSINESS OPPORTUNITIES

September 20, 2021 (LINCOLN, NE) - The Nebraska Department of Banking and Finance (NDBF) announced today that NDBF has joined with the North American Securities Administrator’s Association’s (NASAA) Electronic Filing Depository (EFD) System to accommodate the electronic filing of franchises and business opportunities under Nebraska’s Seller-Assisted Marketing Plan (SAMP) Act.

The new functionality, referred to as the “Franchise Electronic Depository (FRED),” allows franchise filers to submit electronic filings and fees to NDBF for franchise filings on the EFD System. Additionally, NDBF is expanding the “Universal Filing Type (UFT)” filing functionality to allow business opportunity filers to submit electronic filings to NDBF on the EFD System.

Developed by NASAA, of which NDBF is a member, the EFD System was launched in 2014 and was initially used to facilitate the filing of Form D for Regulation D, Rule 506 offerings with state securities regulators and to pay related fees. The system was expanded in 2019 to accommodate Form NF-UIT notice filings for unit investment trusts (UITs) and further expanded in 2020 to allow a variety of corporation finance offerings including, among others, registrations by coordination and qualification, Regulation A (Tier 1 and Tier 2), and crowdfunding (federal and state) filings with NDBF.

The EFD website also enables the public to search and view, free of charge, Reg. D Rule 506, Form NF-UIT, and franchise filings made through EFD. EFD is available at: https://www.efdnasaa.org.

NDBF’s expansion of online filing for franchises and business opportunities helps grow Nebraska and advances the state’s mission of creating opportunities through more effective, more efficient, and consumer-focused state government.

If you have questions about a particular offering in a franchise or business opportunity, or about EFD, contact NDBF at DOB.SecuritiesFiling@nebraska.gov or 402-471-2171.

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FRED Publication Final.pdf

Legislative Updates

Publication Date: Apr 19, 2021

Contact: Christopher German, Senior Staff Attorney

Phone: 402-471-2171

Email: christopher.german@nebraska.gov

Installment Sales Act and Installment Loan Act Updates

April 19, 2021 (LINCOLN, NE) - The Nebraska Department of Banking and Finance

(“NDBF”) is providing the following notice regarding consumer lenders. Effective

March 18, 2021, Legislative Bill 363 (2021) (“LB 363”) amended sections of the Nebraska Installment Sales Act and the Nebraska Installment Loan Act (collectively referred to as “the Acts”).

Nebraska Installment Sales Act

Section 45-335(11) of the Nebraska Installment Sales Act was amended to define a sales finance company as “a person purchasing one or more installment contracts from one or more sellers or acquiring any rights of ownership, servicing, or other forms of participation in or otherwise engaging with a consumer on behalf of the purchaser of one or more installment sales contracts from one or more sellers.” (emphasis added)

Additionally, Section 45-346 of the Nebraska Installment Sales Act was amended to reflect the established practice of NDBF to require an additional bond amount of $50,000 for each licensed branch location, including branches not physically located in Nebraska, of an applicant or licensee under the Nebraska Installment Sales Act.

Nebraska Installment Loan Act

Prior to the passage of LB 363, a license was required to engage or continue in the business of making loans of money and charge, contract for, and receive the maximum for interest and other charges allowed under the Nebraska Installment Loan Act. Now, sections 45-1004 and 45-1005 of the Nebraska Installment Loan Act have been amended to require a license for non-chartered entities holding, servicing, or otherwise participating in consumer loans made to Nebraska residents with an interest rate greater than 16% per annum, a principal balance of less than $25,000, and a duration of 145 months or less.

The Nebraska Installment Loan Act still requires lenders who are making installment loans to have a physical presence in Nebraska, but the physical presence requirement does not apply to owners, servicers, or purchasers of installment loans if they are not making such loans.

Conclusion

With the change in the Acts, consumer lenders should consult with legal counsel to determine if licensure is necessary under Nebraska law. As stated above, LB 363 is already effective; therefore, NDBF would expect those now subject to the licensing requirements to file an application for a license on the Nationwide Mortgage Licensing System (“NMLS”) by October 1, 2021.

A properly licensed debt collection agency is not required to be licensed under the Acts due to the changes contained in LB 363, for conducting activities that are covered by such debt collection agency licensure. However, licensure under the Acts may be required where such an agency conducts business beyond the scope of such debt collection agency license that includes licensable business activity under the Nebraska Installment Sales Act or the Nebraska Installment Loan Act.

Failure to obtain a license as required under the Acts, may result in administrative actions being taken by NDBF, including the imposition of fines, penalties, and other forms of liability, as set forth in Sections 45-343 and 45-353 of the Nebraska Installment Sales Act and Sections 45-1015, 45-1033, and 45-1069 of the Nebraska Installment Loan Act.

Additional licensing information for consumer lenders is available on NDBF’s website at https://ndbf.nebraska.gov/industries/consumer-lending-licenses and on the NMLS website at https://mortgage.nationwidelicensingsystem.org/Pages/default.aspx . If you have questions, please call NDBF at 402-471-2171.

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Industry Update - Installment Sales Act and Installment Loan Act Updates

Order Curing Late Notice

Publication Date: Mar 18, 2021

Contact: Christopher German, Senior Staff Attorney

Phone: 402-471-2171

Email: christopher.german@nebraska.gov

Order Curing Late Notice for Federal Covered Securities

March 18, 2021 (LINCOLN, NE) - The Nebraska Department of Banking and Finance (NDBF) is providing the following notice regarding Form D, Regulation 506 filings for federal covered securities. Effective March 18, 2021, LB 363 (2021) amended Section 8-1108.02 of the Securities Act of Nebraska (“the Act”) to allow late Form D filings to be cured.

The Act requires that issuers using Regulation D must file a Form D with the Department no later than fifteen days after the first sale in Nebraska. However, Section 8-1108.02 now provides the late filing of the Form D may be cured by an order issued by the Director at the Director’s discretion and payment of a $200 late fee. As NDBF adopts rules to implement Section 8-1108.02, a filer will need to submit a payment of the $200 late fee and a written request signed and dated by an officer, director, general partner, managing member or legal counsel of the seller and containing the information outlined in 48 NAC 19.003. Filers submitting electronic filings through the North American Securities Administrators Association’s Electronic Filing Depository will be charged the late fee automatically at the time of filing. The written request may be submitted to the Department via email.

Previously, a late filing under Section 8-1108.02 could not be cured and the filer had to either register the securities or withdraw their filing and qualify for a different applicable exemption within the Act. The implementation of a curative order for late filings of federal covered securities is consistent with the ability to cure late notices available under other exemptions in the Act.

Additional information about the filing requirement for Regulation D offerings is available at NDBF’s website at https://ndbf.nebraska.gov/industries/securities/filing-requirements-regulation-d-offerings. If you have questions, please call NDBF at 402-471-2171.

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3.18.21 LB 363 Notices.pdf

Metals.com Receivership

Publication Date: Mar 15, 2021

FOR IMMEDIATE RELEASE

CONTACT Mike Cameron, Securities Bureau Counsel

Phone 402-471-2171

Email mike.cameron@nebraska.gov

Metals.com, Tower Equity, Chase Metals, and Barrick Capital Receivership Claim Deadline of April 30, 2021

March 15, 2021 (LINCOLN, NE) – The Nebraska Department of Banking and Finance (NDBF) and the Office of the Nebraska Attorney General, other state regulators and the Commodity Futures Trading Commission recently filed a joint civil enforcement action against Metals.com, Tower Equity, Chase Metals, Barrick Capital and other associated parties. The complaint alleges that the defendants perpetrated a fraudulent precious metals investment scheme that involved at least 1,600 investors and more than $185 million in customer funds, including $600,000 from Nebraska investors.

The United States District Court for the Northern District of Texas entered an injunction and a restraining order freezing the assets of the defendants. It also appointed Kelly Crawford as Receiver – an official responsible for marshalling assets of the defendants for the benefit of investors.

The Receiver will begin administering the claims process and returning money to investors. As part of the process, he will be sending correspondence, instructions, and a claims form. Investors must complete and return their claims forms to the Receiver to participate in the claims process and request a return of money. The deadline to return the claim form is April 30, 2021.

“NDBF and the Office of the Nebraska Attorney General continue to fight to protect senior citizens and other victims,” said NDBF Deputy Director Claire McHenry. “We are committed to holding bad actors accountable for their actions and pursuing relief for victims of illegal scams. We are therefore encouraging investors to promptly begin working with the Receiver to request a return of funds.”

Investors should direct questions about the claims process to the Receiver. They can contact the Receiver at kelly.crawford@solidcounsel.com or 214-706-4213. The Receiver also maintains a website that provides information about the claims process, and it is accessible at https://www.metalsandbarrickcapitalreceivership.com.

NDBF can also provide additional information and explanation relating to the allegations of fraud, the lawsuit, the receivership, and the claims process. Please contact NDBF at 402-471-2171.

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3.15.21 Consumer Advisory - Metals.com Receivership Claim Deadline.pdf

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