January 11, 2018 (Lincoln, Neb.) — With cryptocurrencies continuing to attract headlines, the Nebraska Department of Banking and Finance (“NDBF”) today reminded Nebraska investors to be cautious about investments involving cryptocurrencies.
“Investors should go beyond the headlines and hype to understand the risks associated with investments in cryptocurrencies, as well as cryptocurrency futures contracts and other financial products where these virtual currencies are linked in some way to the underlying investment,” Deputy Director Claire McHenry said.
Cryptocurrencies are a medium of exchange that are created and stored electronically in the blockchain, a distributed public database that keeps a permanent record of digital transactions. Current common cryptocurrencies include Bitcoin, Ethereum and Litecoin. Unlike traditional currency, these alternatives have no physical form and typically are not backed by tangible assets. They are not insured or controlled by a central bank or other governmental authority, cannot always be exchanged for other commodities, and are subject to little or no regulation.
“The recent wild price fluctuations and speculation in cryptocurrency-related investments can easily tempt unsuspecting investors to rush into an investment they may not fully understand,” McHenry said. “Cryptocurrencies and investments tied to them are high-risk products with an unproven track record and high price volatility. Combined with a high risk of fraud, investing in cryptocurrencies is not for the faint of heart.”
Last month, NASAA identified Initial Coin Offerings (ICOs) and cryptocurrency-related investment products as emerging investor threats for 2018. Unlike an Initial Public Offering (IPO) when a company sells stocks in order to raise capital, an ICO sells “tokens” in order to fund a project, usually related to the blockchain. The token likely has no value at the time of purchase. Some tokens constitute, or may be exchangeable for, a new cryptocurrency to be launched by the project, while others entitle investors to a discount, or early rights to a product or service proposed to be offered by the project.
NASAA offers a short animated video to help investors understand the risks associated with ICOs and cryptocurrencies.
Some concerns investors should consider before investing in any offering containing cryptocurrency include:
Common Red Flags of Fraud
NDBF also reminds investors to keep watch for these common red flags of investment fraud:
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at www.ndbf.nebraska.gov. If you have questions about any investment matter, call NDBF’s Consumer Hotline toll free at (877) 471-3445 in Nebraska, or (402) 471-3445 if you are out of state.
Promissory Notes, Real Estate Investments and Ponzi Schemes Top the List
December 27, 2017 (Lincoln, Neb.) — The Nebraska Department of Banking and Finance (“NDBF”) today released its annual list of top investor threats and reminded Nebraskans to use caution when approached with any unsolicited investment opportunities. “All investments involve a degree of risk. Investors can help protect themselves by taking time to research both the investment product and the person selling it. It’s best to learn about an investment before you lose money,” Deputy Director Claire McHenry said.
The top threats were determined by surveying members of the North American Securities Administrators Association, of which NDBF is a member, to identify the most frequently identified source of current investor complaints or investigations. The following were cited most often:
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at www.ndbf.nebraska.gov. If you have questions about any investment matter, call NDBF’s Consumer Hotline toll free at (877) 471-3445 in Nebraska, or (402) 471-3445 if you are out of state.
DECEMBER 19, 2017 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (“NDBF”) draws attention to resources for its state-registered investment advisers available from the North American Securities Administrators Association (“NASAA”), of which it is a member. At its annual conference in September, NASAA released two reports important to state-registered investment advisers.
The 2017 NASAA Investment Adviser Coordinated Examination Report provides information about more than 1,200 coordinated examinations of state-registered investment advisers by 37 state securities regulators, including NDBF. The report identified the top three findings as books and records, registration, and contracts. In particular, examiners found problems with client suitability information, inconsistencies between Parts 1 and 2 of Form ADV, and problems with the fee description in the contract. These findings are consistent with Nebraska’s examination findings.
The exam report identifies 10 best practices to assist investment advisers in developing compliance policies and procedures, including maintaining all required records, maintaining up-to-date suitability information, and reviewing the Form ADV annually. NDBF reminds investment advisers that under new rules, NDBF is requiring all investment advisers to adopt and implement written policies and procedures reasonably designed to prevent violations of the Securities Act of Nebraska on or before June 5, 2018.
During the coordinated examinations, state securities examiners also found nearly 700 deficiencies involving cybersecurity. Cybersecurity is a key priority for NDBF and NASAA. In February 2016, NDBF surveyed its state-registered investment advisers about their cybersecurity practices. The survey found that all firms used passwords on computers used for advisory business and most had created some policies and procedures about cybersecurity. The survey also found that investment advisers could improve cybersecurity readiness by using stronger passwords, maintaining up-to-date anti-virus/anti-malware software and operating systems, and encrypting sensitive client data, particularly on mobile devices. NDBF will conduct a similar survey in February 2018 to gather updated information and identify trends in cybersecurity practices in Nebraska.
NASAA also released a cybersecurity checklist to help state-registered investment advisers gauge their cybersecurity preparedness; identify, protect, and detect vulnerabilities; and respond and recover from cyber events. Cybersecurity is a growing challenge, even for smaller firms, and NDBF encourages investment advisers to review the checklist and prepare for possible cybersecurity events.
The Nebraska Department of Banking and Finance has issued a Cease and Desist Order against Steve’s Payday Loans and its officers, directors, employees, and agents. The Order prohibits Steve’s Payday Loans from deceptively claiming to be, and from operating as, a payday lender in Nebraska until the entity has obtained the required delayed deposit services business license in Nebraska.
On November 13, 2017, the Federal Trade Commission issued a notice to consumers who lost money using Western Union services that they may be eligible for a refund.
If you lost money to scammers who had you pay using Western Union between January 1, 2004 and January 19, 2017, you can now ask for your money back.
To learn more, follow this link to the Federal Trade Commission.
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, 2017. 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, 2018.
State-registered investment adviser and investment adviser representative deadlines:
FINRA broker-dealer and agent deadlines:
Non-FINRA Broker-Dealers and agents must submit all required forms and documentation to NDBF
( see requirements) by December 22, 2017.
On November 3, 2017, the Nebraska Department of Banking and Finance entered into a Consent Order with Ocwen Loan Servicing, LLC and Ocwen Mortgage Servicing, Inc. The Consent Order resolves the Department’s April 20, 2017, Cease and Desist Order against the Ocwen entities and provides several protections for Nebraska mortgage consumers.
Under the Consent Order the Ocwen entities will not acquire new residential mortgage servicing rights until April 30, 2018, and will transition all loans to a new servicing system. The Ocwen entities will also engage an independent third-party auditor to test approximately 9,000 loan files for compliance with state and federal escrow laws at an estimated cost to the Ocwen entities of at least $4.4 million.
The Nebraska Department of Banking and Finance will receive regular reports on Nebraska mortgage loans and will interact with the Ocwen entities, on behalf of consumers, through an enhanced consumer complaints processing procedure. The Department will also receive regular reports on the Ocwen entities’ financial condition for three years and will get direct notification if certain liabilities are incurred by the Ocwen entities.
For media inquiries contact Mark Quandahl, Director, or Patricia Herstein, NDBF General Counsel. Consumers can contact NDBF Department Legal Counsel for information regarding the Ocwen entities, or in the event they experience problems with payments or other account issues.
NOVEMBER 2, 2017 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (“NDBF”) announced the availability of a new brochure, “Guarding the Guardians,” to help spotlight suspected guardian financial exploitation.
“Education is an investor’s best defense against this type of financial abuse. We are pleased to provide this free resource to the public to strengthen awareness of the warning signs of guardian financial abuse,” said Deputy Director Claire McHenry.
A guardian is a person or entity appointed by a court to exercise some or all authority over a person and/or estate. A guardian has power to make decisions related to the health and safety of the incapacitated person. Financial abuse by guardians occurs when the guardian improperly uses the protected individual’s financial accounts.
In addition to helping individuals identify suspected guardian abuse, the “Guarding the Guardians” brochure also provides examples of warning signs of exploitation and offers information on where to turn for help.
The brochure was developed by the North American Securities Administrators Association, of which NDBF is a member. A copy of the brochure is available on the agency’s website at www.ndbf.nebraska.gov/about/news-publications. To learn more about investor education resources available in Nebraska, contact the NDBF at (877) 471-3445 in Nebraska, or (402) 471-3445 for out of state.
SEPTEMBER 15, 2017 (LINCOLN, NEB.) — A binary option is a type of all-or-nothing investment contract, similar to placing a bet. Like the flip of a coin, there are only two possible outcomes: heads you win or tails you lose. When an investor purchases a binary option contract, the investor predicts the value of an underlying asset (currency, stock, etc.) at a predetermined time or date in the future – similar to placing a bet. If the investor correctly predicts the asset price at the end of the contract, which can be just a matter of minutes, the investor receives the payout agreed upon in the contract. If the investor is incorrect, there is no payout and the investor loses the amount invested in the binary option.
The Nebraska Department of Banking and Finance (“NDBF”) is cautioning investors about schemes related to binary options amid the proliferation of online binary option platforms and a growing number of related investor complaints. The advisory provides information and resources to help investors better understand binary options, their risks and where to turn for help.
The advisory also discusses common investor complaints and offers common tactics and warning signs of schemes related to binary options, including: unsolicited investment offers; high-pressure sales tactics; personal information requests; and a lack of information about the offering firm or its management.
The full advisory is available on the agency’s website at www.ndbf.nebraska.gov/about/news-publications.
Before making any financial decisions, ask questions, do your homework and contact NDBF’s Consumer Hotline toll free at (877) 471-3445 in Nebraska, or (402) 471-3445 if you are out of state.
CONTACT: Claire McHenry, Deputy Director – Securities Bureau
PHONE: (402) 471-2171
NDBF Cautions Investors to Watch for Scams in Wake of Hurricane Harvey
AUGUST 31, 2017 (Lincoln, Neb.) — In the wake of widespread damage caused by Hurricane Harvey in Texas and Louisiana, the Nebraska Department of Banking and Finance (“NDBF”) is cautioning investors to watch out for opportunistic investment scams.
“As we are seeing in Texas and Louisiana, natural disasters bring out the best in people, with neighbors helping neighbors. Unfortunately, we know from experience that disasters also can bring out the worst in people, particularly those seeking to profit from the misfortune of others,” NDBF Deputy Director Claire McHenry said. “Unsolicited investment offers seeking to capitalize on the aftermath of Hurricane Harvey should be approached with extreme caution.”
McHenry urged investors to watch for red flags of hurricane-related scams, including unsolicited email, social media messages, crowdfunding pitches or telephone calls promoting investment pools or bonds to help storm victims, water-removal or purification technologies, electricity-generating devices and distressed real estate remediation programs.
Scam artists also may linger to prey on storm victims who anticipate receiving large lump-sum insurance settlements. “The potential for fraud remains even after the skies have cleared. Be wary of any promoter promising quick and high returns on your investments,” McHenry warned.
NDBF also cautioned about fraudulent charitable solicitations that prey on the goodness of people seeking to help those in need. “The best advice is to do your research. Give to those charitable organizations that are registered properly with state authorities. As with any charitable contribution, those who want to contribute to relief efforts should send contributions to only those charities with an established track record of making sure the donations get to the victims,” McHenry said.
NDBF offered three tips to help investors avoid disaster-related scams:
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at www.ndbf.nebraska.gov. If you have questions about any investment matters, call NDBF’s Consumer Hotline toll free at (877) 471-3445 in Nebraska, or (402) 471-3445 if you are out of state.
CONTACT: Claire McHenry, Deputy Director – Securities Bureau
PHONE: (402) 471-2171
August 31, 2017 (Lincoln, Nebraska) – The Nebraska Department of Banking and Finance (“Department”) issued a Cease and Desist Order against an Ohio company known as A Voice 4 U, LLC; its President, Katrina S. Farmer (“Farmer”); and its affiliates, control persons, officers, directors, agents, and employees. The Order prohibits the entity and individuals named from offering or selling securities in Nebraska until the securities have been registered with the Department. The Order also prohibits the entity and individuals named from offering or selling securities in Nebraska until they are registered as broker-dealers or agents of a broker-dealer with the Department.
From 2012 to 2014, Farmer sold profit-sharing agreements in A Voice 4 U, LLC to investors in Nebraska. The profit-sharing agreements were not registered in Nebraska under the Securities Act of Nebraska. Neither A Voice 4 U, LLC nor Farmer were registered in Nebraska as a broker-dealer or agent of a broker-dealer. The sale of unregistered securities and the solicitation of investments by unlicensed broker-dealers is illegal under Nebraska law.
Individuals who invested in the above securities are asked to contact the Department.
More information about the laws governing the securities industry in Nebraska can be found on the Department’s website at www.ndbf.nebraska.gov. If you have questions about any investment matters, call the Department’s Consumer Hotline toll free at (877) 471-3445 in Nebraska, or (402) 471-3445 if you are out of state.
CONTACT: Thomas A. Sindelar, Investigation Supervisor
PHONE: (402) 471-2171
The Nebraska Department of Banking and Finance has adopted forms and guidelines to implement amendments to the laws governing the licensing of bank executive officers and credit union loan officers. The amendments, adopted as part of LB 140 (2017), are effective August 24, 2017, and authorize exemptions from the licensing process. The Department has also updated a number of related forms to reflect the amendments.
The Nebraska Department of Banking and Finance (“NDBF”) recently announced comprehensive amendments to its Rules under the Securities Act of Nebraska, contained in Title 48 of the Nebraska Administrative Code, became effective on June 5, 2017. The amendments reflect NDBF’s goal of reducing regulatory complexity and promoting uniformity while protecting investors and promoting capital formation in Nebraska.
The NDBF Bureau of Securities will host a compliance seminar on August 17, 2017 at 2:00 pm CDT to assist investment advisers and their compliance personnel in understanding and complying with these new requirements. Speakers will include NDBF Director Mark Quandahl, Deputy Director – Securities Bureau Claire McHenry, and Securities Bureau Counsel Mike Cameron.
People may attend in person or electronically via webinar. Space is limited. Register by August 11, 2017 to reserve your seat.
Where: Training Room – Basement Level
1526 K Street
Lincoln, NE 68508
When: August 17, 2017
2:00 pm – 3:30 pm
Registration: Click here to email the NDBF Securities Bureau. Include in the email your name, firm, and whether you will attend in person or via webinar. Webinar participants will be emailed instructions on joining the webinar.
JUNE 20, 2017 (LINCOLN, NEB.) — The Nebraska Department of Banking & Finance (“Department”)
announces that amendments to its Rules under the Securities Act of Nebraska contained in Title 48 of
the Nebraska Administrative Code became effective June 5, 2017. These amendments represent the
first comprehensive amendments to these rules since 1999, as 33 of the 42 chapters in Title 48 were
The amendments reflect the Department’s goal of reducing regulatory complexity and promoting
uniformity while protecting investors and promoting capital formation in Nebraska. Highlights of the
amendments include the following:
Copies of the updated regulations are available on the Department’s website.
The Department will be conducting compliance seminars with state-registered investment advisers to
discuss rule amendments affecting them. Details regarding the seminars will be forthcoming in the next
June 15, 2017 (LINCOLN, NEB.) – In recognition of World Elder Abuse Day on June 15, 2017, the Nebraska Department of Banking and Finance (NDBF) reminds financial professionals of the importance of safeguarding Nebraska’s senior population by keeping a watchful eye for signs of elder financial exploitation and promptly reporting possible abuse to appropriate authorities.
Elder financial abuse is on the rise due to the amount of wealth seniors have accumulated throughout their careers and the increasing number of retirees throughout North America.
"Seniors are often targeted for financial fraud and exploitation because they may be isolated from family, caregivers, and other support networks. In other instances, it could be family or caregivers who are taking advantage of the vulnerable adult who feels he/she cannot say anything due to fear of retribution. That's why it is important to know the red flags that could signal an elder's savings may be in danger, " NDBF Director Mark Quandahl said.
Director Quandahl highlighted three warning signs of possible elder financial fraud or exploitation to watch for:
"Financial services professionals are uniquely positioned to serve as a front line of defense to spot potential elder financial fraud and exploitation and alert authorities," Director Quandahl said.
Financial professionals who suspect elder financial fraud or exploitation are encouraged to contact NDBF through the department's website at www.ndbf.nebraska.gov, or by calling the NDBF Consumer Hotline toll free at (877) 471-3445 in Nebraska, or (402) 471-3445 if you are out of state. People who have reason to believe a vulnerable adult has been abused, neglected or exploited may contact the Nebraska Department of Health & Human Services, Adult Protect Services 24-hour hotline toll free at (800) 652-1999 or lo.cal law enforcement.
NDBF has teamed with the North American Securities Administrators Association, of which it is a member, to provide free training to help financial services employees learn how to identify and report suspected cases of senior financial exploitation. To learn more about the Senior$afe training program, or to request a training session for your firm, contact the Department.
On Thursday June 8, 2017, Department of Banking and Finance Legal Counsel Mike Cameron and Deputy Director Financial Institutions Kelly Lammers met with Girls State participants. The discussion included the uniqueness of Nebraska Securities and Banking regulations, the volume of updates to laws and rules over this past year, and time for questions, which included interest in ID theft. Pictured below in a State Capitol hearing room are Mike Cameron and Girls State delegates representing the communities of Friend, Hartington, Callaway, Scribner, Sutherland, Syracuse, Tekamah, Mullen, Wahoo, and Minden.
May 22, 2017 (Lincoln, Neb.) – Scott Robert Prill (“Prill”), formerly of Kearney and Holdrege Nebraska, has been convicted of securities fraud in three Nebraska counties. Prill sold unregistered promissory note securities to Nebraska residents to fund a cattle business. Prill also fraudulently failed to provide material information to the investors in his offer and sale of securities to them. Prill was sentenced to five years of probation in Douglas County, five years of probation in Phelps County, and six years of probation in Buffalo County. In addition, Prill was sentenced to 180 days in jail in Buffalo County. Prill was also ordered to pay restitution totaling $128,000.
The Nebraska Department of Banking and Finance (“Department”) has issued a Cease and Desist Order to Blazefly, Inc., Papillion, NE, its President Jamie Crager, and its affiliates, control persons, officers, directors, agents, and employees. The Order prohibits the entity and individuals named from offering or selling securities in Nebraska until the securities have been registered, and until the entity and individuals are registered as broker-dealers or agents of a broker-dealer with the Department.
The Nebraska Department of Banking and Finance has issued a Cease and Desist Order to Ocwen Financial Corporation through its Nebraska licensed subsidiaries, Ocwen Loan Servicing, LLC and Ocwen Mortgage Servicing, Inc. The Order prohibits the companies from the acquisition of mortgage servicing rights and the origination of mortgage loans until they are able to prove they can appropriately manage their consumer mortgage escrow accounts.
LB 140 was signed into law by Governor Pete Ricketts on March 29, 2017, during a ceremony at the Nebraska State Capitol. LB 140 is the first comprehensive revision of the Nebraska Banking Act since 1963. LB 140 also updates related laws for banks and other financial institutions.
In 2016, then Banking, Commerce and Insurance (BCI) Committee Chair Jim Scheer introduced Legislative Resolution 430, proposing to study whether the Nebraska Banking Act should be updated. Senator Scheer gathered legislators, BCI committee staff, banking and credit union industry professionals and Department of Banking and Finance (NDBF) staff into a working group, and led a seven-month section by section review and redrafting of the Act. LB 140 is the product of the LR 430 study committee and reflects its goals: reducing regulatory complexity and carefully updating the Act to reflect the current banking environment, while protecting consumers and preserving the public confidence in the financial institutions of Nebraska.
LB 140 was introduced by Senator Matt Williams, Vice Chair of BCI, who participated in the working group. The bill as introduced encompassed 143 Pages and 157 Sections, consisting of a combination of new sections, repealed sections, and amendments of existing sections of the Banking Act. Among its provisions, LB 140 authorizes an increase in the maximum number of a bank board of directors from 15 to 25; prohibits bank-affiliated individuals from being paid a higher rate of interest on deposits than paid by the bank for similar deposits and provides that a violation is a Class IV felony; allows financial institutions, in a state of emergency, to open a temporary office to conduct business for up to 30 months; authorizes the Department to provide for the electronic filing of certain bonds; repeals a registration requirement for banks making personal loans; and clarifies merger and acquisition procedures.
The Legislature incorporated three other bills into LB 140: LB196, introduced by Sen. Joni Craighead at the request of NDBF, which provides an annual update of the equal rights laws for state-chartered depository financial institutions with their federal counterparts, and LB341 and LB 454, introduced by current BCI Chair Sen. Brett Lindstrom, who participated in the LR 430 working group. These bills allow for an opt-out of licensing requirements for bank executive officers and credit union loan officers, respectively.
With the exception of the three sections amended by former LB 196, which carried the emergency clause and became effective March 30, 2017, LB 140 will become effective on or about September 1, 2017. NDBF will provide detailed information on the changes prior to that date. The Slip Law version of LB 140 can be viewed at http://nebraskalegislature.gov/bills/view_bill.php?DocumentID=30705
The Nebraska Department of Banking and Finance (“Department”) issued a Cease and Desist Order against an Omaha-based company, Parker Grant BMC, Inc., its President Daniel M. Porter (“Porter”), and its affiliates, control persons, officers, directors, agents, and employees. The Order prohibits the entity and individuals named from offering or selling securities in Nebraska until they are registered as broker-dealers or agents of a broker-dealer with the Department.
State regulators and the Conference of State Bank Supervisors (CSBS) have released a new voluntary self-assessment tool to help banks better manage Bank Secrecy Act and anti-money laundering risk. The tool is meant to help institutions better identify, monitor, and communicate BSA/AML risk, reduce uncertainty surrounding BSA/AML compliance and foster greater transparency within the industry. Learn more and access the tool at the CSBD WebSite.
The Nebraska Department of Banking and Finance web page will have a new look and a new web address ndbf.nebraska.gov on 2/1/2017. The old web address www.ndbf.ne.gov will automatically redirect to ndbf.nebraska.gov; however, bookmarks and links will need to be updated. If you have questions, please contact your Review Examiner at 402-471-2171 or write DOB.email@example.com .
On September 22, 2016, the Department issued an order recognizing the OTCQX Best Market and OTCQB Venture Market as designated securities manuals for purposes of Section 8-1111(2)(a)(iv) of the Securities Act of Nebraska (“the manual exemption”). The Order continues to recognize manuals published by Mergent, Inc. as approved manuals for purposes of the manual exemption. As part of the Order, the portions of the Bureau of Securities Interpretative Opinion #8 addressing the manual exemption were rescinded, and the Department has issued a revised Interpretative Opinion # 8.
Federal Regulatory Alert - Unauthorized Banking Entity: The Office of the Comptroller of the Currency is warning business owners and consumers of an entity calling itself Banc of Omaha. Business owners and consumers (who may not be business owners) are receiving letters by fax and mail stating that their company has been approved for up to $250,000 in working capital and to respond by a deadline because of limited funds.
Securities Rules Notice is hereby given that the Nebraska Department of Banking and Finance will hold a rulemaking hearing on August 10, 2016, commencing at 9:30 a.m., at the offices of the Department of Banking and Finance, 1526 K Street, Suite 300, Lincoln, Nebraska 68508.
Effective August 1, 2016, the Department revised the form, “Notices of Switch Operation,” to provide for the annual notice of operation filing. The annual notice is due on or before September 1, 2016.
Effective July 1, 2016, the Nebraska Department of Banking and Finance (NDBF) will require issuers filing pursuant to registration by coordination under Section 8-1106 of the Securities Act of Nebraska to file a separate Form U-1/Uniform Application to Register Securities for each distinctive share class to be offered. NDBF will receipt each share class under a separate and distinct state file number, applying the requisite fee to each filing accordingly. NDBF will no longer allow an issuer to reallocate fees between share classes of the offering after the initial filing is received and receipted.
The Nebraska Department of Banking and Finance (“NDBF”) issued an Emergency Order against Jerome P. Bonnett, Jr., a/k/a Joe Bonnett and two of his companies, Bonnett Financial Services, Inc., and BWM Advisors, LLC, Omaha, Nebraska, on May 18, 2016. The Order revoked Bonnett’s registration as an investment adviser representative and suspended the registration of BWM Advisors, LLC, for multiple violations of the Securities Act of Nebraska (“Act”).
In addition, the Nebraska Attorney General’s office, on behalf of NDBF, filed a civil action on May 18, 2016, in Douglas County District Court against Bonnett and his companies alleging violations of the Act and misappropriation of client funds. The lawsuit seeks injunctive relief, freezing of assets, and the appointment of a receiver. On May 20, 2016, the Douglas County District Court granted a Temporary Restraining Order and Asset Freeze against Jerome P. Bonnett, Jr. and the companies named above.
The hearing on the State’s request for a receiver was held June 6, 2016, before Douglas County District Judge Duane Dougherty. Judge Dougherty entered an Order appointing Thomas D. Stalnaker, 1111 N. 102nd Court, Suite 330, Omaha, Nebraska, 68114, as receiver for Bonnett Financial Services, Inc., BWM Advisors, LLC, Omaha, Nebraska, and the Estate of Jerome P. Bonnett, Jr.
NDBF has sent a letter and survey to all known clients of Jerome P. Bonnett, Jr. and the named companies. Responses will be used to assist the receiver. Persons who have not yet returned the surveys are asked to do so promptly. Clients who did not receive the letter are asked to contact NDBF at 402.471.2171.
More information will be posted as it becomes available.
A Bellevue area woman won this year’s DASH for the STASH in Nebraska. Eighteen Nebraska libraries and other locations participated in the contest from March 15-May 15, 2016. Much like a scavenger hunt, players gather information about saving and investing by going to participating locations, reading investor education posters, and answering questions. The posters covered four key topics: finding financial advisers, avoiding fraud, understanding investment fees, and building a nest egg. The winner was randomly selected from those players who correctly answered the questions and awarded $1,000 to open or add to an Individual Retirement Account (IRA).
Citizens of Nebraska are eligible to compete in an investor education and protection program and contest taking place March 15 - May 15, 2016. The DASH for the STASH program is being launched in Nebraska by the Department of Banking & Finance and the nonprofit Investor Protection Institute. The two organizations will present one statewide winner with a $1,000 prize to open or add to a retirement investment account for 2016.
The Nebraska Legislature enacted significant changes to the laws governing switches, ATMS, and point-of-sale terminals. To implement LB 348 (2015), the Department has adopted the form, “Notices of Switch Operation,” and has rescinded Financial Institutions Statement of Policy #33.
NEBRASKA DEPARTMENT OF BANKING AND FINANCE WARNS CONSUMERS TO BEWARE OF SCAM INVOLVING OLD AND NON-EXISTING DEBTS
The Nebraska Department of Banking and Finance is warning residents to beware of a currently popular debt collection scam in which individuals call people to demand payment of an old “payday loan” and then threaten them with possible arrest or court action if they do not immediately send payment.
NEBRASKA DEPARTMENT OF BANKING AND FINANCE, INVESTOR PROTECTION INSTITUTE TO OFFER $1,000 PRIZE IN “DASH FOR THE STASH” FINANCIAL LITERACY PUSH IN LIBRARIES
Public libraries and other institutions in Nebraska will participate in the DASH for the STASH investor education/protection program and contest taking place April 15-May 15, 2015 as part of Financial Literacy Month. Research shows that the four focuses of DASH for the STASH – financial fraud, building a nest egg, selecting financial advisers, and the cost of investment fees – are all topics about which many investors need to learn more.
Notice is hereby given that the Nebraska Department of Banking and Finance will hold a rulemaking hearing on January 7, 2016, commencing at 9:30 a.m., at the offices of the Department of Banking and Finance, 1526 K Street, Suite 300, Lincoln, Nebraska 68508. The purpose of the hearing is to take testimony and evidence concerning the following changes to the Rules and Regulations of the Department:
Lincoln, Neb., June 3, 2013 – The Nebraska Department of Banking and Finance is warning Nebraska residents about an internet-based escrow company. Lincoln Closing and Escrow Services (“LCE”) claims to be based at 1248 “O” Street, Lincoln, Nebraska. The Department has determined that no such company is located at that location.
LCE claimed to be a licensed money transmitter and provided the consumer with a copy of a Sale of Checks and Funds Transmission license allegedly issued to it by the Nebraska Department of Banking and Finance. The license stated that LCE was a trade name of Skrill USA, Inc. (“Skrill”), a legitimate, licensed money transmitter. The license provided to the consumer was fraudulent. LCE is not licensed by the Department, nor is it affiliated with Skrill or any other licensed money transmitter.
Lincoln, Neb., February 14, 2012 – The Nebraska Department of Banking and Finance has issued a Cease and Desist Order against Greyton, LLC, 8972 Quioccasin Road, No. 138, Richmond, Virginia (“Greyton”), its manager, Anthony T. Hall (“Hall”), and its affiliates, officers, directors, agents, and employees. The Order prohibits the entities and individuals named from offering or selling securities to Nebraska investors.
Recently a Pawnee City man was charged with stealing hundreds of thousands of dollars from his elderly uncle over an eleven-month period. A Nebraska State Patrol investigation revealed that over $600,000 of assets were liquidated by the man. The investigation found that the thief sold land, cashed CD’s, and transferred money out of accounts. The uncle had reportedly issued the man a durable power of attorney.
Durable powers of attorney are good tools. Durable powers of attorney, however, present some risk when they are issued to non-bonded, non-regulated individuals. There are entities in Nebraska that have state or federal authority to act with fiduciary powers. Those entities are found within banks or are independent trust companies, and they are regulated, examined, and bonded. Those entities are run by individuals who have made fiduciary decision making their full-time job.
Before issuing a durable power of attorney to someone to control your assets, you should consider if this is your best option. Please contact the Department (402) 471-2171 if you have a question regarding any bank or trust company using trust powers.
The Nebraska Department of Banking and Finance Securities Bureau is conducting a series of seminars for “Switch” Investment Advisers as a result of the Dodd-Frank legislation. The seminars will provide Switch IA’s with information on relevant Nebraska law as well as a general overview of the Nebraska registration and examination processes. The seminars also present an excellent opportunity to meet and ask questions of Bureau staff. The seminars are free of charge.
December 1, 2011
IA “Switch” Workshop
Presented by the Nebraska Department of Banking and Finance Bureau of Securities
1:00 p.m. to 2:30 p.m. Omaha State Office Building | Room 233J | 1313 Farnam Street | Omaha, NE
December 8, 2011
IA “Switch” Workshop
Presented by the Nebraska Department of Banking and Finance Bureau of Securities
1:00 p.m. to 2:30 p.m.
Nebraska Department of Banking and Finance
Commerce Court Building | Suite 400 | 1230 O Street | Lincoln, NE
For more information about the workshops: (402) 471-3445
Click here to visit the IA Switch Resource Center
The Office of the Comptroller of the Currency (OCC) has issued a warning that the Web site "helpwithmybank.com," is attempting to masquerade as the legitimate Web site, "helpwithmybank.gov," and contains potentially damaging malware. The illegitimate site redirects the user to the legitimate site "helpwithmybank.gov" in an attempt to convince users that they are connecting to a legitimate site. Attempts to connect to the fake Web site could expose the user to harmful malware.
Any information that you may have concerning this matter should be brought to the attention of:
Mail: Office of the Comptroller of the Currency Enforcement & Compliance Division, MS 8-10 250 E St. SW, Washington, DC 20219
Fax: (202) 874-5301
Lincoln, Neb., November 4 – The Nebraska Department of Banking and Finance (NDBF) announced that at 6:00 p.m. today it closed Mid City Bank, Inc., Omaha, Nebraska. The bank’s four branch offices, also located in Omaha, Nebraska, were simultaneously closed. The NDBF had been closely monitoring the bank for some time and recently made a demand for a capital injection, which was not met. The Department named the Federal Deposit Insurance Corporation (FDIC) as receiver of the bank. The FDIC has entered into a purchase and assumption agreement with Purdum State Bank, Purdum, Nebraska, which will change its name to “Premier Bank.” The transaction includes the assumption of all customer deposits. All offices of the bank will be open for business on Saturday, November 5, under the new name, Premier Bank. Premier Bank is owned by the Greg Stine family.
Lincoln, Neb., September 13, 2011 – Jack E. Herstein, Assistant Director of the Nebraska Department of Banking and Finance and head of the Department’s Bureau of Securities, begins his one-year tenure today as President of the North American Securities Administrators Association (NASAA). Herstein gave his inaugural address during the annual NASAA conference, being held this year in Wichita, Kansas. NASAA is celebrating 100 years of state securities regulation in the state which enacted the first laws to protect investors.
The Nationwide Mortgage Licensing System (NMLS) is now accepting registration of mortgage loan originators (MLO) who are employees of depository institutions and certain subsidiaries. Following expiration of the 180-day initial registration period on July 29, 2011, any employee of an agency-regulated institution who is subject to the registration requirements will be prohibited from originating residential mortgage loans without first meeting these requirements.
Please refer to the NMLS Resource Center for information
http://mortgage.nationwidelicensingsystem.org/Pages/Default.aspx. The resource center contains information about the registry, including the rules and upcoming training sessions, and provides contact information for the federal agencies concerning the SAFE Act requirements.
Effective June 25, 2011, Chapters 1 and 15 of Title 48 of the Nebraska Administrative Code have been amended. Please ensure you have the most recent version of these Chapters.
Revised Chapter 1 updates the Department address.
Revised Chapter 15 provides for the filing of financial statements and sales reports by certain issuers claiming a transactional exemption from securities registration pursuant to 48 NAC 15 and Neb. Rev. Stat. § 8-1111(9). The revisions implement statutory changes enacted in 2010 and apply to issuers who make filings in five consecutive years or who sell in excess of $1 million dollars in securities.
The Nebraska Department of Banking and Finance is issuing a warning to Nebraska residents considering investing in oil, gas, or alternative energy programs. According to Jack Herstein, Assistant Director for the Department’s Bureau of Securities, con artists frequently rely on today’s headlines in pitching their investment schemes. With recent headlines focusing on prices at the gas pump, Herstein warned Nebraska residents to be alert to investments in traditional and alternative energy projects. Such investments are highly risky and not appropriate for smaller investors.
The Department has updated its Delayed Deposit Services Interpretative Opinions and its Frequently Asked Questions document. The Interpretative Opinions were effective May 1, 2011, and include new Interpretative Opinion No. 7, which relates to Collection Items and the types of documentation that Department examiners will be looking for in collection files.
The Federal Deposit Insurance Corporation held a forum on small lending to explore ways in which credit can be made more accessible to the small business sector. As a result of the forum and in recognition of importance of available credit to small businesses, the FDIC announced the formation of a new dedicated, toll-free hotline for small businesses. The new hotline became operational January 13, 2011, and allows small business owners to make inquiries with FDIC officials or to register concerns about the availability of credit. The FDIC will respond to inquiries about policies and financial institutions it regulates as well as make referrals to other governmental agencies where appropriate.
The small business hotline is operational Monday thru Friday, 8am to 8pm, Eastern Standard Time. The toll-free number is 1-855-FDIC-BIZ (1-855-334-2249). To complement the new small business hotline, the FDIC also created a dedicated Web site for small businesses to utilize: www.fdic.gov/smallbusiness.
Notice is hereby given that the Nebraska Department of Banking and Finance will hold a rulemaking hearing on December 14, 2010, commencing at 9:30 a.m., at the offices of the Department of Banking and Finance, Commerce Court, Suite 400, 1230 O Street, Lincoln, Nebraska 68508.
The purpose of the hearing is to take testimony and evidence concerning the following changes to the Rules and Regulations of the Department:
The Nebraska Department of Banking and Finance has issued a Cease and Desist Order against Complete Development International, Inc., 16009 Oak Plaza, Omaha, NE (“Complete Development”), its president, William “Bill” Tate, and its affiliates, officers, directors, agents and employees. The Order prohibits the entities and individuals named from offering or selling securities to Nebraska investors.
Jack E. Herstein, Assistant Director of the Nebraska Department of Banking and Finance and head of the Department’s Bureau of Securities, has been elected President-Elect of the North American Securities Administrators Association (NASAA). Organized in 1919, NASAA is the oldest international organization devoted to investor protection. It is a voluntary association whose membership consists of 67 state, provincial, and territorial securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada, and Mexico.
The Nebraska Department of Banking and Finance is warning Nebraska residents about two Internet-based companies offering personal loans to consumers. Barstow Brokers claims to be based at 11110 Fort Street, Suite 201, Omaha, Nebraska, and 1st Liberty Financial Corporation lists its address as 2900 South 70th Street, Suite 200, Lincoln, Nebraska. The Department has verified that the companies do not have offices at the addresses listed. Both companies require potential borrowers to pay fees between $200 and $1,500 in advance of funding any loan. The Department urges consumers to exercise extreme caution when completing online loan applications which require personal information. Money is often not the only thing scammers are seeking; many are after personal information. With the application, the scammer has access to a consumer’s Social Security number, credit card numbers, and bank account information.
Information for Customers of TierOne Bank, a Federal Savings Bank, Insolvent The Federal Deposit Insurance Corporation (FDIC) was named receiver of TierOne Bank, FSB, after it was closed by the Office of Thrift Supervision on June 4, 2010. Customers of TierOne Bank who have questions or concerns are strongly urged to review a special FDIC website for TierOne Bank: http://www.fdic.gov/bank/individual/failed/tieronebankne.html.
Great Western Bank, 3405 South Sycamore Avenue, Sioux Falls, South Dakota 57110, assumed all the deposits and purchased assets of TierOne Bank from the FDIC. Contact with Great Western Bank may be by telephone at 605-371-9708, or through its website, www.greatwesternbank.com
The Department cautions customers of TierOne Bank that customers of failed financial institutions are prime targets for attempts at identity theft. Neither the FDIC nor the purchasing bank will send emails requesting private information such as social security numbers, account numbers, or account passwords. Do not respond to, and immediately delete, any such emails.
The Nebraska Department of Banking and Finance is pleased to announce the successful implementation of mortgage loan originator licensing requirements as required by the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the “SAFE Act”) and by legislation enacted in 2009 and 2010 which made significant amendments to the Nebraska Residential Mortgage Licensing Act to bring Nebraska in compliance with the SAFE Act.
The Nebraska Department of Banking and Finance today announced that it has joined a 35 State settlement agreement with CitiFinancial and its mortgage lending entities. The agreement between CitiFinancial and state mortgage regulators was executed after an examination conducted by the Massachusetts Division of Banks to determine compliance with state and federal consumer protection laws. The examination found that CitiFinancial had failed to report 91,127 residential mortgage loans to the federal government as required by the Home Mortgage Disclosure Act (HMDA), including 472 Nebraska loans that were not reported. The mortgage loans that were omitted from CitiFinancial’s HMDA Loan Application Register were originated between 2004 through 2007. The underreporting of the mortgage loans was apparently caused by an internal systems error at CitiFinancial that went undetected until the Massachusetts examination.
The Nationwide Mortgage Licensing System & Registry (NMLS)—a mortgage licensing system operated by state financial regulators, including Nebraska—provides “NMLS Consumer Access”. NMLS Consumer Access is a fully searchable website that allows the public to view information concerning state-licensed mortgage companies, branch offices, and individuals currently licensed through NMLS.
The Nebraska Department of Banking and Finance has issued a Cease and Desist Order against Global Media Holdings, LLC, 202 West Norfolk Avenue, Norfolk, NE (“Global”), its manager, Troy Hand, and its affiliates, officers, directors, agents and employees. The Order prohibits the entities and individuals named from soliciting Nebraska investors.
The Nebraska Department of Banking and Finance has issued a Cease and Desist Order against Citywide Financial Service Corp. and K&R Development LLC, 16350 Crestfield Drive, Omaha, NE and Dewayne Long, their president/manager, officers and employees. The companies solicited investors in several states.
The Nebraska Department of Banking and Finance is warning of an Internet finance company calling itself Hamilton Lending Group, which lists its address as 1248 “O” Street, Lincoln, Neb. The Department has verified that the company does not have an office at the address listed.
The Nebraska Department of Banking and Finance has issued a Cease and Desist Order and an Order to Show Cause against Envision Investment Advisors, LLC, 1065 North 115th Street, Suite 150, Omaha, Ne, and Ryan Jindra, its President and Chief Executive Officer. Envision is an investment advisory firm registered with the Department and the Securities and Exchange Commission (SEC).
The NDBF is issuing a warning of a scam targeting consumers who need to borrow money. A company calling itself Hillsboro Financial Group, which lists its address as 4060 Vinton Street, Suite 4, Omaha, NE, offers personal loans to consumers and requires up-front fees for “lender’s insurance” in advance of funding a loan. The Department has verified that the company does not have an office at the Omaha address listed.
The Department issues a warning of a scam targeting consumers who want to become mystery shoppers. A company calling itself Global Compliance, Inc., offers consumers an opportunity to participate in a paid customer research program known as “mystery shopping” or “secret shopping.” The Department has verified that the company does not have offices at the addresses listed.
The Nebraska Department of Banking and Finance is issuing a warning of two scams targeting consumers who use Internet-based companies to borrow money. Companies calling themselves Bennett Financial Group and Westmont Financial Group, which list their respective addresses as 10665 Bedford Street and 8401 West Dodge Road, both in Omaha, NE, offer personal loans to consumer and require up-front “collateral payments” in advance of funding a loan. The Department has verified that the companies do not have offices at the addresses listed.
The Nebraska Department of Banking and Finance (NDBF) announced that at 4 p.m. Feb. 13, it closed Sherman County Bank of Loup City, Nebraska. The bank’s branch offices in Farwell, Dannebrog and St. Paul, which operated under the name Howard County Bank, were also closed. The NDBF had been closely monitoring the bank and had ordered it to increase its capital reserves to a safe level. However, efforts by the bank to do so were unsuccessful. The Department named the Federal Deposit Insurance Corporation (FDIC) as receiver of the bank. The FDIC has entered into a purchase and assumption agreement with Heritage Bank headquartered in Wood River, Nebraska, to assume all of the deposits. Heritage Bank has branch offices in Aurora, Doniphan, Grand Island, Hastings, Kearney, Neligh and Stromsburg, as well as mobile branches in Adams, Buffalo and Hall counties. Customers who have questions regarding Sherman County Bank and their accounts can call the FDIC toll free at 1-800-823-5346. Customers can also visit the FDIC’s website at www.fdic.gov for more information.
On Monday, January 12, 2009, First Americans Insurance Service, Inc. of Grand Island filed for Chapter 11 Bankruptcy. First Americans is registered with the Department of Insurance as an insurance agency. The bankruptcy filing indicates more than 200 creditors and over $100 million dollars in liabilities. Many of the creditors appear to be investors who purchased notes from First Americans. The Nebraska Attorney General's office has authorized a criminal investigation by the Nebraska State Patrol. All of the state agencies are working closely regarding the investigation to determine possible violations of state laws. Any investors that have questions or complaints can contact the Nebraska Department of Banking and Finance at 402-471-2171 or its toll-free consumer number at 1- 877-471-3445. Any insurance customers that have questions should contact the Nebraska Department of Insurance at its toll-free consumer hotline at 1-877-564-7323.
The Nebraska Department of Banking and Finance is working with AARP in a new initiative designed to give individuals an opportunity to fight back by reporting questionable investment practices in their communities to the state securities regulator for investigation.
The Nebraska Department of Banking and Finance is warning consumers about an apparent online lending fraud involving an Internet-based lender, USA Financial Center, which listed its address as 1033 O Street, Suite 600, in Lincoln, Ne. The Department has verified that the company was not licensed and does not have an office at that location.
The Conference of State Bank Supervisors(CSBS) announced that the Nebraska Department of Banking and Finance has received its fourth certificate of accreditation from CSBS, certifying that the department maintains the highest standards and practices in state banking supervision. The CSBS Accreditation Program identifies banking departments that serve the citizens of their state by operating a capable and professional regulatory program.
The Nebraska Department of Banking and Finance is issuing a warning of yet another scam targeting consumers who use Internet-based companies to borrow money. This time, a company calling itself Penbrook Financial Group, which lists its address as 6910 Pacific Street, Omaha, NE, offers personal loans to consumers and requires up-front "collateral payments" in advance of funding a loan. In this case, the company required a borrower to make four monthly payments totaling $2,460 prior to securing the loan. The Department has verified that the company does not have an office at the address listed.
Recent complaints to the Nebraska Department of Banking and Finance against Internet-based lending companies have prompted the Department to issue a warning to consumers about Internet lending scams. The Department is receiving a growing number of complaints on Internet-based cash advance companies, known as delayed deposit services in Nebraska and elsewhere as payday lenders, and Internet-based consumer loan companies.
John Munn, Director of the Nebraska Department of Banking and Finance,has been elected chair of the State Liaison Committee of the Federal Financial Institutions Examination Council (FFIEC) and will serve as a voting member of the Council. The Council was established by Congress in 1979 to create a formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions.
The Nebraska Department of Banking and Finance, in carrying out its regulatory authority under the Securities Act of Nebraska, has issued a Cease and Desist Order against Country Depot, Inc., 3810 Avenue A. Suite G, Kearney, Neb., and to Dennis Pace, its President, its officers and employees. Country Depot sells shares of stock and solicits investors for proposed retail stores specializing in tractor and farming supplies. The company allegedly planned to operate multiple stores, with the first store to be located in Kearney. The company solicited potential investors in Nebraska and other states.
NDBF today announced that starting on January 2, 2008, the Department will join several states across the country in participating in the Nationwide Mortgage Licensing System (NMLS) developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators. The goal of the NMLS is to streamline and improve the licensing of mortgage lenders, brokers and servicers that hold licenses in multiple states.
Attorney General Jon Bruning and John Munn, Director of the Nebraska Department of Banking and Finance (NDBF), announced that the State is suing Omaha-based Advantage Mortgage Service, Inc., a mortgage brokerage firm, and its principal owners and operators for predatory lending practices. The NDBF is also instituting license revocation proceedings.
The Nebraska Department of Banking and Finance (NDBF) has issued an Order to Cease and Desist against SFS, Inc., doing business as One Click Cash, located at 52946 Highway 12, Suite 3, Niobrara, Nebraska, from operating as an Internet delayed deposit services business. According to Department records, One Click Cash does not have a license to operate a delayed deposit services business in the state. Delayed deposit services businesses are commonly referred to payday lenders.
Nebraska Department of Banking and Finance Director John Munn issued a consumer advisory today urging Nebraskans facing the possibility of foreclosure on a home mortgage to be cautious when working with foreclosure rescue consultants and companies. Recent inquiries to the Department regarding foreclosure have prompted Department officials to warn Nebraskans of the potential risks associated with foreclosure rescue services.
Nebraska Department of Banking and Finance Director John Munn today issued this consumer alert urging homeowners with adjustable rate mortgages especially those with nontraditional mortgages to plan now for any scheduled recasts or resets of interest rates in the year ahead. Non traditional mortgage loans and many subprime loans frequently feature a recast (or reset) with a significant payment increase.
The Nebraska Department of Banking and Finance (NDBF) issued an Order to Cease and Desist on May 22,2007, against Northern Utilities, LLC, 2840 South 70th Street, #360, Suite 7, Lincoln, and two managing members, David R. Anderson and Trent P. Anderson. The Order states that Northern Utilities is offering $48,000,000 in membership interests to finance the development of an ethanol plant in Bradshaw, Nebraska.
John Munn, Director of the Nebraska Department of Banking and Finance (NDBF) recently announced the adoption of a set of regulatory guidelines covering the marketing of nontraditional mortgages by state-licensed entities. These guidelines promote consistent regulation in the mortgage market and clarify how residential mortgage providers can offer nontraditional mortgage products in a way that clearly discloses the risks borrowers may assume.