2022
NDBF and State Securities Regulators Settle with BlockFi
FOR IMMEDIATE RELEASE
CONTACT Claire McHenry, Deputy Director – Securities Bureau
Phone 402-471-2171
Email claire.mchenry@nebraska.gov
_____________________________________________________________________________________
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.
BlockFi Lending Findings of Fact Conclusions of Law and Consent Order.pdf
Governor Ricketts Proclaims April Financial Awareness Month
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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Multistate SAFE Act MLO Settlement
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
Precious Metals Enforcement
NDBF and the Office of the Nebraska Attorney General Partner with CFTC and 26 State Securities Regulators to Stop $68 Million Precious Metals Scheme that Targeted the Elderly
Feb. 2, 2022 (LINCOLN, NE) – The Nebraska Department of Banking and Finance (NDBF) and the Office of the Nebraska Attorney General announced today that they are participating in a consolidated enforcement action to stop a fraudulent precious metals scheme that solicited over $68 million from at least 450 investors nationwide, including $658,000 from investors in Nebraska.
NDBF and the Office of the Nebraska Attorney General have joined the Commodity Futures Trading Commission (CFTC) and 26 state securities regulators in filing a complaint in the United States District Court for the Central District of California alleging Safeguard Metals LLC and Jeffrey Santulan, a/k/a Jeffrey Hill, solicited investors nationwide by touting precious metals at grossly inflated prices that were not disclosed.
“This is one of many large-scale precious metals investment schemes we’ve endeavored to stop since the pandemic began and we are investigating numerous more precious metals investment companies on similar allegations. To prevent any further damages, investors are advised to be particularly cautious when purchasing precious metals and to check for excessive commissions, spreads or markups as high as 30 to 70 percent,” said NDBF Deputy Director Claire McHenry. “As the market continues to fluctuate, we anticipate seeing more fraudsters capitalize on investors’ uncertainty and use fear to manipulate good people out of their hard-earned money.”
The investors in this case were advised to liquidate their holdings at registered investment firms to fund investments in precious metals, bullion, and bullion coins through self-directed individual retirement accounts. Self-directed IRAs should not be confused with traditional IRAs or other retirement vehicles.
“In expectation of additional precious metals investment schemes, investors are advised to check the registration of all investment products and professionals, carefully research investments, ask tough questions about the fees, markups or spreads, risks, and potential returns,” said NDBF Deputy Director McHenry. “If the answers seem too good to be true or don’t make sense, protect your wallet by just walking away.”
The defendants are accused of failing to disclose the markup charge for their precious metals bullion products and that investors could lose the majority of their funds once a transaction was completed. In many cases, the market value of the precious metals sold to investors was substantially lower than the value of the securities and other retirement savings investors had liquidated to fund their purchase.
NDBF and the Office of the Nebraska Attorney General encourage investors to contact NDBF if they suspect they have been targeted by similar precious metals investment schemes. Please contact NDBF at 402-471-2171.
Safeguard Metals Consumer Advisory 2.2.2022.pdf
Top Investor Threats
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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2021
NDBF Orders "Crypto Mining" Company to Stop Soliciting
Nebraska Department of Banking and Finance Orders “Crypto Mining” Company to Stop Soliciting Investors after Report from Broker-Dealer
Nov. 29, 2021 (LINCOLN, NE) – The Nebraska Department of Banking and Finance (“NDBF”) has issued a Cease and Desist Order (“Order”) against an entity that claimed to offer investments via the Internet.
On October 19, 2021, NDBF issued an Order to Cease and Desist (“Order”) to Satitech Mining & Machinery (“Satitech”). The Order, which became effective on November 10, 2021, prohibits the entity from offering or selling securities in Nebraska until the securities have been registered with NDBF. The Order also prohibits the entity from offering or selling securities in Nebraska until they are registered as broker-dealers or agents of a broker-dealer with NDBF.
Satitech offered cryptocurrency mining investments to at least one Nebraska investor. This investor invested $525,000 with Satitech. Upon receipt of the investment, Satitech would mine cryptocurrency and the investor would receive a portion of the profits. A month later, Satitech represented to the investor that her investment had grown to $2.3 million. When the investor attempted to withdraw a portion of her investment, she was told that additional “clearance” fees were due. The investor’s mother then contacted a broker-dealer about withdrawing funds from her account to pay a portion of the clearance fee.
The broker-dealer utilized the provisions of the Nebraska Protection of Vulnerable Adults from Financial Exploitation Act, which was signed by Governor Ricketts earlier this year and became effective August 28, 2021. The broker-dealer reported the suspected financial exploitation to NDBF. Through the efforts of the broker-dealer and NDBF, the investor and her mother realized that Satitech was offering an illegitimate investment, and the action by the broker-dealer prevented additional losses to the investor.
“I am very pleased that financial firms are already using the tools provided by the Nebraska Protection of Vulnerable Adults from Financial Exploitation Act,” said NDBF Deputy Director Claire McHenry. “This case is an example of how the financial industry and regulators are working together to protect investors.”
A copy of the Cease and Desist Order is available on NDBF’s website, ndbf.nebraska.gov.
NDBF strongly cautions investors on conducting business over the Internet with financial companies with whom they are unfamiliar. In many cases, the investor is told to wire money or send a prepaid card, often to a location outside the United States. In other cases, the investors are instructed to send bitcoin to fund their investment. Investors never receive the promised return and cannot recover their money. Furthermore, these investors may be asked to provide personal information such as social security numbers and bank account numbers to the Internet company, which makes them prime targets for identity theft.
More information about the laws governing the financial industries in Nebraska can be found on NDBF’s website. If you have questions about any investment matters, call NDBF at (402) 471-2171.
2022 IA and BD Renewal Deadline
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
Notice of Rulemaking Hearing
NOTICE OF RULEMAKING HEARING
NEBRASKA DEPARTMENT OF BANKING AND FINANCE
Notice is hereby given that the Nebraska Department of Banking and Finance will hold a rulemaking hearing on November 10, 2021 commencing at 10 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:
- The proposed revision of 48 NAC Chapters 1, 3, 4, 9, 10, 12, 18, 19, 20, 38, & 39.
48 NAC 2—General Provisions. The purpose of the proposed amendments is to delete unnecessary rules pertaining to fee schedules and forms, to clarify when a document filed electronically is received by the Department, and to clarify that the Department will not accept checks drawn on non-United States banks for payment of filing fees.
48 NAC 3—Definition of an Offer. The purpose of the proposed amendment is to update the reference to the Department’s website.
48 NAC 4—Broker-Dealers. The purpose of the proposed amendment is to update requirements related to audited financial statements for newly formed broker-dealers, and to clarify requirements related to the broker-dealer’s designated principal.
48 NAC 9 Investment Adviser Representatives. The purpose of the proposed amendment is to allow dual registration for investment adviser representatives during the time in which an investment adviser representative is transferring firms.
48 NAC 10—Recordkeeping by Investment Advisers. The purpose of the proposed amendments is to amend recordkeeping requirements for investment advisers as related to marketing.
48 NAC 12—Fraudulent, Dishonest and Unethical Business Practices. The purpose of the proposed amendments is to repeal the existing rules related to marketing and to incorporate by reference the United States Securities & Exchange Commission’s recently amended marketing rule.
48 NAC 18—Information Requirements for the Section 8-1111(20) Nebraska Intrastate Issuer Exemption. The purpose of the proposed amendments is to increase the amount that can be offered from $1 million to $1.25 million.
48 NAC 19—Orders Curing Late Notice. The purpose of the proposed amendments is to adopt a procedure for curing late notices of Regulation D, Rule 506 filings.
48 NAC 20—Federal Covered Securities. The purpose of the proposed amendments is to provide a cross-reference to the procedure to cure late notices of Regulation D, Rule 506 filings.
48 NAC 38—Information Requirements for the Section 8-1111(23) Notice. The purpose of the proposed amendments is to increase the amount that can be raised pursuant to this exemption from $750,000.00 to $811,500.00 as a result of changes in the Consumer Price Index for All Urban Consumers as prepared by the United States Department of Labor, Bureau of Labor Statistics.
48 NAC 39—Conditions and Information Requirement for the Section 8-1111(24) Crowdfunding Exemption. The purpose of this amendment is to eliminate a requirement related to the payment of filing fees by physical check.
The rulemaking hearing is being conducted under and by virtue of the provisions of Section 84-907, R.R.S 1943, as amended, which provides that COPIES OF THE PROPOSED RULES ARE AVAILABLE FOR PUBLIC EXAMINATION at the Office of the Department of Banking and Finance, 1526 K Street, Suite 300, Lincoln, Nebraska 68508, and at the Office of the Secretary of State, 1201 N Street, Suite 120, Lincoln, Nebraska 68509. In addition, the proposed rules are available on the Department of Banking and Finance’s website at https://ndbf.nebraska.gov, and the Secretary of State’s website www.sos.ne.gov.
A copy of the Fiscal Impact Statement is available at the Office of the Department of Banking and Finance and on the Department’s website.
All interested persons are invited to attend and testify at the hearing. Interested persons may also submit written comments to the Department of Banking and Finance prior to the hearing, which comments will be made part of the hearing record at the time of the hearing.
If auxiliary aids or reasonable accommodations, including accommodations related to COVID-19, are needed for attendance at this hearing, please call the Nebraska Department of Banking and Finance at (402) 471-2171, or, for persons with hearing impairments, please call the Nebraska Relay System, (800) 833-7352 TDD. This contact should be made at least seven (7) days prior to the hearing.
Dated at Lincoln, Nebraska, this 27th day of September, 2021.
Kelly Lammers, Director
Nebraska Department of Banking and Finance
Title 48 Chapter 03 Appendix.pdf
Title 48 Chapter 04 Appendix.pdf
Title 48 Chapter 09 Appendix.pdf
Title 48 Chapter 10 Appendix.pdf
Title 48 Chapter 12 Appendix.pdf
Title 48 Chapter 18 Appendix.pdf
Title 48 Chapter 20 Appendix.pdf
Title 48 Chapter 38 Appendix.pdf
NDBF Now Accepting Online Franchise Filings, Business Opportunites
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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Investment Fund Expense Ratios Advisory
CONTACT Claire McHenry, Deputy Director
Phone 402-471-2171
Email Claire.mchenry@nebraska.gov
NDBF SHEDS LIGHT ON INVESTMENT FUND EXPENSE RATIOS
August 16, 2021 (LINCOLN, NE) — As part of its ongoing effort to raise investor awareness, the Nebraska Department of Banking and Finance (NDBF) today issued an advisory discussing the importance of paying attention to expense ratios when comparing mutual funds and exchange traded funds.
The advisory explains what expense ratios are; how they are calculated; how they are affected by a fund’s management style, investment strategy and portfolio size; and important considerations for investors.
“Expense ratios are an important element for investors to consider, along with a fund’s risk/return profile, when comparing funds,” NDBF Deputy Director Claire McHenry said.
The full advisory is available on the agency’s website here ndbf.nebraska.gov.
Before making any financial decisions, ask questions, do your homework, and contact the NDBF at 402-471-2171 for more information.
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Governor’s Ag & Economic Development Summit
Governor Pete Ricketts is holding an Ag & Economic Development Summit in Kearney, Nebraska on August 3rd at 4:00 PM and August 4th at 2:30 PM. If you would like to attend, tickets will need to be purchashed. Please click the links below for more information.
Facebook Link:
Twitter Link:
https://twitter.com/GovRicketts/status/1417604201866305537?s=20
To purchase Tickets:
https://www.eventbrite.com/e/2021-governors-ag-economic-development-summit-registration-159180746899
Location of Summit:
Younes Conference Center
416 W Talmadge Rd,
Kearney, NE 68845
WORLD ELDER ABUSE AWARENESS DAY
Contact: Mike Cameron, Securities Bureau Counsel
Phone: 402-471-2171
Email: mike.cameron@nebraska.gov
NDBF RECOGNIZES JUNE 15 AS WORLD ELDER ABUSE AWARENESS DAY
CHECK FOR WARNING SIGNS OF SUSPECTED GUARDIAN FINANCIAL ABUSE
June 15, 2021 (LINCOLN, NE) — In recognition of World Elder Abuse Awareness Day today, the Nebraska Department of Banking and Finance (NDBF) reminds financial professionals and the public throughout Nebraska to be on the lookout for signs of elder financial abuse, including potential exploitation by guardians.
A guardian, whether publicly funded or privately appointed, has a legal obligation to act in the best interest of a protected individual. Guardians often are granted extensive access and control of a protected individual’s assets. Financial abuse or exploitation by guardians could occur if the guardian improperly uses the protected individual’s funds, securities, property, or other assets.
“A trusted guardian can be a wonderful resource. But sometimes guardians may take advantage of the people or assets in their care,” NDBF Deputy Director Claire McHenry said. “Taking the time to understand the warning signs of guardian financial abuse and the steps that can be taken to report such abuse are key to helping those who cannot help themselves.”
The North American Securities Administrators Association (NASAA), of which NDBF is a member, has developed resources to help call attention to the red flags of fraud and suspected guardian financial abuse. The “Guarding the Guardians” publication provides examples of exploitation and information on how to report suspected elder financial abuse.
Examples of suspected guardian abuse include:
- The guardian takes money from the protected individual’s investment portfolio to buy a new car for personal use.
- The guardian overcharges for a caregiving service, such as billing the estate hourly for wait time to file paperwork in person when it could have been submitted online.
- The guardian does not take the protected individual to medical appointments or purchase their necessary medication.
The publication as well as other resources to help seniors are available on NASAA’s Serve Our Seniors website (serveourseniors.org) at the following link: http://serveourseniors.org/about/investors/. Other senior investor protection resources are available on the NDBF’s website at ndbf.nebraska.gov.
NDBF asks anyone with suspicions of possible senior financial exploitation to contact the agency at 402-471-2171.
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Legislative Updates
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
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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Metals.com Receivership
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
Understanding Financial Services
First 2021 my moNEy video meets commitment to assist in understanding financial services
The Department of Banking and Finance and Department of Insurance presents videos on a variety of financial topics through the my moNEy series. The latest video provides information on Compound Interest. Use Compound Interest to your advantage by avoiding the pitfalls and investing in your future.
Videoclip:
RISKS OF STOCK PRICE VOLATILITY
NDBF REMINDS REGULATED FIRMS OF CUSTOMER OBLIGATIONS AND INVESTORS ABOUT RISKS OF STOCK PRICE VOLATILITY
February 1, 2021 (LINCOLN, NEB.) -- The Nebraska Department of Banking and Finance (NDBF) today called on firms and other regulated entities to ensure that investor protection obligations are being met during recent price volatility in shares of certain publicly traded companies.
“Regulated entities have an obligation to their customers. NDBF will work with fellow regulators to ensure that investor protection, fairness and transparency are upheld in the public securities markets,” said Deputy Director Claire McHenry. “We are closely monitoring this developing situation and will examine actions by online brokerages and others to ensure that they are in compliance with their client obligations.”
Deputy Director McHenry also cautioned investors about the risks associated with investing in publicly traded companies that are experiencing volatility. “Investing in companies experiencing price volatility can be risky and investors should understand their risk tolerance when considering such investments,” Deputy Director McHenry said.
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 Nebraska Department of Banking and Finance at 402-471-2171.
Consumer Advisory - Share Price Volatility
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2020
IA-BD Renewal Deadline
NDBF REMINDS INVESTMENT ADVISERS, BROKER-DEALERS OF DECEMBER 31, 2020 RENEWAL DEADLINE
November 2, 2020 (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, 2020. 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, 2021.
State-registered investment adviser and investment adviser representative deadlines:
• By December 18, 2020 – Submit Nebraska specific forms and documentation to NDBF
• Before December 26, 2020 – Submit renewal payments through CRD/IARD
• Before December 26, 2020 – Submit required electronic form filings through CRD/IARD
FINRA broker-dealer and agent deadlines:
• Before December 26, 2020 – Submit renewal payments through CRD/IARD
• Before December 26, 2020 – 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 18, 2020
Nebraska Department of Banking and Finance Orders Two Internet “Investment” Companies to Stop Soliciting Investors
FOR IMMEDIATE RELEASE
CONTACT: Thomas Sindelar, Investigation Supervisor
PHONE: 402-471-2171
EMAIL: thomas.sindelar@nebraska.gov
Nebraska Department of Banking and Finance Orders Two Internet “Investment” Companies to Stop Soliciting Investors
Lincoln, Neb., October 20, 2020 – The Nebraska Department of Banking and Finance (“NDBF”) has issued Cease and Desist Orders (“Order”) against two entities that claimed to offer investments via the internet.
On August 17, 2020, NDBF issued an Order to Canadian FX Traders. The entity maintained the website, https://canfxtraders.com/, which has been deactivated. The Order prohibits the entity from offering or selling securities in Nebraska until the securities have been registered with NDBF. The Order also prohibits the entity from offering or selling securities in Nebraska until they are registered as broker-dealers or agents of a broker-dealer with NDBF.
Canadian FX Traders offered “binary options in cryptocurrency trades” to at least one Nebraska investor. This investor invested $1,500.00 with Canadian FX Traders. The company led the investor to believe that the trading had been successful as her purported balance had increased to $38,000.00. When she attempted to withdraw funds, she was informed that she needed to pay various additional fees before the funds could be withdrawn. She paid over $4,800.00 in additional fees in an attempt to withdraw her funds. Ultimately, the investor was unable to withdraw her funds and she lost her entire investment along with the additional fees she paid to Canadian FX Traders.
On September 2, 2020, NDBF issued an Order to Crypto-Initiation Company of Bournemouth, United Kingdom. The entity maintained the website, https://cryptoinitiation.com/, which has been deactivated. The Order prohibits the entity from offering or selling securities in Nebraska until the securities have been registered with NDBF. The Order also prohibits the entity named from offering or selling securities in Nebraska until they are registered as broker-dealers or agents of a broker-dealer with NDBF.
Crypto-Initiation Company offered “investment plans” which promised eight percent weekly returns to at least one Nebraska investor. The investor invested $50,000.00 in one of the investment plans. After investing, the investor was told that he needed to make an additional pledge in order to start receiving his payments. The investor increased his investment to $75,000.00 but never received his promised payments. The investor lost the entire investment.
A copy of the Cease and Desist Orders are available on NDBF’s website at www.ndbf.nebraska.gov.
NDBF strongly cautions investors on conducting business over the Internet with financial companies with whom they are unfamiliar. In many cases, the investor is told to wire money or send a prepaid card, often to a location outside the United States. In other cases, the investors are instructed to send bitcoin to fund their investment. Investors never receive the promised return and cannot recover their money. Furthermore, these investors may be asked to provide personal information such as social security numbers and bank account numbers to the Internet company, which makes them prime targets for identity theft.
More information about the laws governing the financial industries in Nebraska can be found on NDBF’s website. If you have questions about any investment matters, call NDBF at (402) 471-3445.
Crypto Cease and Desist Press Release
Canadian FX Traders Cease & Desist Order
Crypto-Initiation Company Cease & Desist Order
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Precious Metals Enforcement
NDBF and the Office of the Nebraska Attorney General Join with CFTC to Charge Precious Metals Dealers in $185 Million Scheme Targeting Elderly Investors
Sept. 25, 2020 (LINCOLN, NE) – The Nebraska Department of Banking and Finance (NDBF) and the Office of the Nebraska Attorney General announced today that they are participating in a consolidated nationwide enforcement action to halt a fraudulent precious metals scheme that has solicited $185 million from at least 1,600 seniors and other investors, including $600,000 from investors in Nebraska.
NDBF and the Office of the Nebraska Attorney General announced today that they joined the Commodity Futures Trading Commission (CFTC) and 29 other states in filing a complaint in the U.S. District Court for the Northern District of Texas alleging Metals.com and Barrick Capital Inc. defendants solicited $185 million from seniors and other vulnerable investors nationwide by touting precious metals at grossly inflated prices that were not disclosed.
“The defendants had a reckless disregard for the truth by failing to disclose that virtually every investor lost the majority of their funds in the investments the firm was peddling,” NDBF Deputy Director Claire McHenry said. “They capitalized on investor fear of market instability and economic uncertainty. Investors suffered substantial losses from retirement savings by relying on the false representations made by the defendants and their sales representatives.”
“This historic joint effort between the CFTC and 30 state regulators is an important step toward rooting out fraud across the country,” said CFTC Chairman Heath P. Tarbert. “This case highlights just how geographically broad commodities fraud can be in our rapidly-evolving financial markets and how important it is for regulators at all levels of government to work together to pursue bad actors and protect market participants.”
The complaint names Los Angeles, California-based companies TMTE Inc., also known as Metals.com, Chase Metals Inc., Chase Metals LLC, and Barrick Capital Inc., along with Simon Batashvili, Lucas Asher, and Tower Equity LLC. The defendants are accused of using cold calling, television, radio, and social media advertisements designed to “instill fear in elderly and retirement-aged investors and build trust with investors based on representations of political or religious affinity.” Investors were advised to liquidate their holdings at registered investment firms to fund investments in precious metals bullion through self-directed individual retirement accounts and bullion coins, the complaint said.
The defendants also are accused of failing to disclose, among other things, the markup Metals.com and Barrick charged investors for their precious metals bullion products and that investors could lose the majority of their funds immediately upon completing a transaction. The defendants charged investors prices for gold or silver bullion averaging from 100% to more than 300% the melt value or spot price of that gold or silver bullion. In many cases, the market value of the precious metals sold to investors was substantially lower than the value of the securities and other retirement savings investors had liquidated to fund their purchase.
The complaint requests the Court order the defendants to cease sales activity, return money to investors, and stop defrauding investors and violating federal and state laws going forward. The complaint also requests that a receiver be appointed to take over the companies to marshal funds for the benefit of investors across the country.
Metals.com and its agents have attempted to evade previous regulatory actions from 12 states by, among other tactics, changing its business name. Today’s coordinated state and federal action to put a stop to the company’s efforts to continue to prey on elderly investors is the result of a multi-state collaboration by members of the North American Securities Administrators Association (NASAA), of which NDBF is a member, and the Commodity Futures Trading Commission’s Office of Cooperative Enforcement.
NDBF encourages investors to come forward if they suspect they have been targeted by similar precious metals investment schemes. Please contact NDBF at 402-471-3445.
Precious Metals Investor Alert
CONTACT Claire McHenry, Deputy Director – Securities Bureau
PHONE 402-471-3445
EMAIL claire.mchenry@nebraska.gov
NDBF Alerts Nebraskans about Investments in Precious Metals and Self-Directed Individual Retirement Accounts
August 28, 2020 (LINCOLN, NEB.) – The Nebraska Department of Banking and Finance (NDBF) has recently received an increased volume of complaints related to investments in precious metals in self-directed individual retirement accounts. Precious metals such as gold and silver have been the subject of widespread advertising campaigns on television, online, and in print media. Such advertisements may emphasize the potential for large returns while downplaying any risks. Precious metal promotions may target seniors who may have concerns about protecting their long-term investments, including retirement accounts.
Companies may point to financial crisis or market volatility as evidence of greater stability and security available through precious metals as opposed to other investments. Historically speaking, the value of gold-related investments fluctuates even more than the stock market. Gold often moves in reverse of stocks and bonds, so when stocks are down, gold seems like a very tempting investment.
Precious metals can be part of a well-diversified portfolio, but like all investment opportunities, an investment in precious metals involves risk. Individuals should not rely on claims in advertisements, word-of-mouth referrals, or “cold calling” tactics utilized by firms promoting these investments. Consumers should be particularly wary of aggressive sales tactics encouraging the liquidation of their existing portfolio in favor of investment in precious metals. NDBF strongly encourages any prospective investor to conduct thorough independent research on any opportunity prior to investing.
The Financial Industry Regulatory Authority (FINRA) issued an Investor Alert that provides tips for individuals considering an investment in precious metals:
- Say “NO” to pushy salespeople.
- Check out the salesperson’s background before you invest.
- Be on high alert when you hear “low risk”.
- Look out for leverage risk.
- Get a full accounting of fees.
Using these strategies can help you understand the benefits and risks of a prospective investment, avoid surprise costs or fees, and protect yourselves from fraud.
Self-Directed Individual Retirement Accounts (IRAs)
Precious metals companies may also encourage individuals to open a self-directed IRA. As with other IRAs, the owner of a self-directed IRA invests funds in various assets and a custodian holds the IRA on the owner’s behalf. Yet while most IRA investments are limited to common securities like stocks or bonds, self-directed IRAs allow for investment in alternative assets. These alternative assets, including cryptocurrencies and precious metals, are riskier investments than those permitted by most IRA custodians. Self-directed IRA custodians have only limited duties to make sure that the alternative assets – and the promoter selling them – are legitimate. Unscrupulous investment promoters may exploit self-directed IRAs because they permit investors to hold riskier assets, including those not registered as securities.
Anyone considering a self-directed IRA should obtain as much information as possible prior to investing, including:
- Duties and responsibilities of the IRA custodian.
- Fees associated with the account.
- Tax consequences of opening, investing in, or withdrawing from a self-directed IRA.
- Specific details regarding the alternative assets in which funds will be invested.
NDBF also recommends working with individuals and firms that are registered to sell securities and to verify their background and registration status. Background information on registered individuals and firms is available through NDBF. In addition, you may obtain information regarding a broker or investment adviser through FINRA’s Broker Check database at BrokerCheck.FINRA.org or through the SEC’s Investment Adviser Public Disclosure website at AdviserInfo.SEC.gov.
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 Nebraska Department of Banking and Finance at 402-471-3445.
Precious Metals Investor Alert 8.2020.pdf
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Industry Advisory
Nebraska Department of Banking and Finance Now Accepting Additional Online Corporation Finance Filings
June 15, 2020 (LINCOLN, NE) –The Nebraska Department of Banking and Finance (NDBF) today announced that the North American Securities Administrators Association’s (NASAA) Electronic Filing Depository (EFD) System has been expanded to accommodate the electronic filing of a greater range of corporation finance materials with the agency.
“We are pleased to continue to modernize and streamline the filing process and offer additional efficiencies for issuers,” said NDBF Deputy Director Claire McHenry.
The new functionality, referred to as “Universal Filing Type,” allows filers to submit electronic filings to the NDBF for a variety of corporation finance offerings not previously available through EFD and to pay associated fees. These offerings include, among others, registrations by coordination and qualification, Regulation A (Tier 1 and Tier 2), crowdfunding (federal and state), and franchise filings. The expanded functionality also facilitates the filing of materials such as issuer-agent registrations.
Developed by NASAA, of which the 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 last year to accommodate Form NF-UIT notice filings for unit investment trusts (UITs) with the NDBF. Future system enhancements are being considered to accommodate the electronic filing of Form NF-Mutual Funds.
The EFD website also enables the public to search and view, free of charge, Reg. D Rule 506 and Form NF-UIT filings made through EFD. EFD is available at: https://www.efdnasaa.org.
“If you have questions about a particular offering, you should contact the NDBF,” Deputy Director McHenry said.
Issuers or investors with questions about EFD can contact the NDBF at DOB.SecuritiesFiling@nebraska.gov or 402-471-3445.
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Single Bank Pooled Collateral Administrator Designated RFP 2020-001
May 1, 2020. Nebraska Department of Banking and Finance Director Mark Quandahl has designated the Nebraska Bankers Insurance and Services Company (NBISCO) as the Administrator of the Single Bank Pooled Collateral program for the State of Nebraska.
COVID-19 Investment Threats
COVID-19-Related Investment Schemes Anticipated
April 21, 2020 (LINCOLN, NEB.) — Amid the ongoing COVID-19 pandemic, the Nebraska Department of Banking and Finance (NDBF) is alerting investors to be on guard against an anticipated surge of fraudulent investment schemes.
“In these extraordinary times, the health and welfare of all must be our foremost concern, and that includes our financial health. Our focus remains on the protection of Nebraska investors,” said NDBF Deputy Director Claire McHenry.
NDBF warns investors that the fraudulent schemes launched amid COVID-19 outbreak will not be elegant. “Scammers will create schemes that require little or no advance planning and little sophistication,” Deputy Director McHenry said. “Most will simply be old scams dressed in new clothes.”
The North American Securities Administrators Association, of which NDBF is a member, anticipates fraudulent investment schemes will rise as a result of the ongoing pandemic. “Scammers will be targeting investors, taking advantage of recent developments in the economy, and preying on concerns about the regulated securities market,” said Deputy Director McHenry. “Investors must remain cautious to protect themselves.”
In particular, NDBF warns investors to be on the lookout for investments specifically tied to the threat of COVID-19. Scammers can be expected to develop schemes that falsely claim to raise capital for companies manufacturing surgical masks and gowns, producing ventilators and other medical equipment, distributing small-molecule drugs and other preventative pharmaceuticals, or manufacturing vaccines and miracle cures. The schemes often appear legitimate because they draw upon current news, medical reports, and social and political developments.
Scammers also will seek to take advantage of concerns with the volatility in the securities markets to promote “safe” investments with “guaranteed returns” including investments tied to gold, silver and other commodities; oil and gas; and real estate. Investors also can expect to see “get rich quick” schemes that promise quickly earned guaranteed returns that can be used to pay for rent, utilities or other expenses. These schemes also target retirees and senior citizens, falsely claiming they can quickly and safely recoup any losses to their retirement portfolios.
Investors must remain vigilant and protect themselves from new schemes tied to COVID-19 and recent economic developments. NDBF warns investors to stay clear of anything sounding too good to be true, such as guarantees of high returns with no risk, and to verify the licenses and registrations of investment professionals.
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
Consumer Advisory - COVID-19 Investment Threats
Consumer Advisory - COVID-19 Related Schemes to Watch For
Consumer Advisory - How to Protect Yourself from COVID-19 Scams
Intent to Award RFP 2020-001
Notice of Intent to Award
And
Public Comment Period
April 16, 2020
The Nebraska Department of Banking and Finance states its intention to designate an Administrator of the Single Bank Pooled Method (SBPM) on or about May 1, 2020.
Pursuant to: Nebraska Department of Banking and Finance RFP 2020-001
For: Administrator of Single Bank Pooled Method
Intended appointee: Nebraska Bankers Insurance and Services Company (NBISCO)
Any member of the public may comment on this notice of intent to award, the contents of RFP 2020-001, the intended appointee and the proposal response of the Nebraska Bankers and Insurance and Services Company from this date until 5:00 pm (the close of business) on April 30, 2020 by emailing said comments to mark.quandahl@nebraska.gov
Nebraska Department of Banking and Finance
By Mark Quandahl, Director
Consumer Advisory
Omaha Man Ordered to Stop Misleading Investors
April 2, 2020 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (NDBF) issued a Cease and Desist Order against an Omaha man, Amogh Karney (“Karney”), in connection to his 2019 offer and sale of investment interests in an entity known as ARK Capital, LLC (“ARK”). The Order includes Karney’s affiliates, control persons, officers, directors, agents, employees and successors.
According to the Order, Karney offered and sold securities in ARK. Karney provided a potential investor with information that falsely stated that an Omaha business owner was an investor in ARK.
The Order prohibits Karney from making any untrue statements of material facts in connection with the offer and sale of securities. The Order also prohibits Karney from omitting material facts in connection with the offer and sale of securities.
Individuals who purchased securities from Karney are asked to contact the Department.
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
RFP 2020-001 Schedule Update
Please note the updates to the schedule for RFP 2020-001.
Activity
Date/Time
5. Oral Interviews, Presentations and/or Demonstrations
03/13/2020 through 04/03/2020
6. Post “Notification of Intent to Appoint” on internet
04/10/2020
7. Public Comment Period
04/13/2020 through 04/27/2020
8. Contract Finalization period
04/10/2020 through 04/30/2020
9. Designation/appointment
05/01/2020*
10. Protest Period for non-appointed applicants
05/04/2020 through 05/15/2020*
11. Administrator Start Date
07/01/2020*
* Unchanged from previous activity schedule of events
NDBF Temporarily Suspends Examinations
March 25, 2020
Statement from Nebraska Department of Banking and Finance regarding Examinations of Financial Institutions during the COVID-19 Emergency
For all Nebraska State chartered, licensed, and supervised depository and non-depository financial institutions:
-
The Nebraska Department of Banking and Finance (Department) will temporarily cease all regular examination activity effective March 25, 2020, except where the examination work is critical to safety and soundness, consumer protection, or is required to address an urgent or immediate need.
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The Department will reassess its approach to examinations on April 24, 2020 or when the emergency has concluded, whichever is sooner.
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The Department’s action will allow financial institutions to prioritize working with their customers during the COVID-19 emergency.
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The institution may elect to move forward with a Department examination if it has previously provided a majority of the requested information; however, the determination to proceed will be left up to the institution.
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The Department’s action to temporarily cease examinations follows federal regulators such as the FDIC and Federal Reserve Bank.
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Additional time will be granted to resolve non-critical existing supervisory findings.
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Please contact Greg Freese at greg.freese@nebraska.gov with examination questions regarding banks, credit unions, or trust companies or Scott Peter at scott.peter@nebraska.gov for examination questions of mortgage companies, delayed deposit services, installment loan companies, and money transmitters. Both can also be reached at the Department’s main phone number: 402-471-2171.
Beware of Con Artists - COVID-19
NDBF Urges Nebraskans to Beware of Con Artists Looking to Profit from Coronavirus Fear and Uncertainty
March 9, 2020 (LINCOLN, NEB.) — In light of the ongoing developments related to the current coronavirus (COVID-19) situation, and its impact on financial markets, the Nebraska Department of Banking and Finance (NDBF) is urging Nebraskans to beware of con artists seeking to capitalize on fear and uncertainty.
“We know con artists are opportunistic and use current events to cloak their schemes with an air of immediacy and legitimacy. Never make an investment decision without understanding what you are investing in, who you are doing business with, where your money is going, how it will be used, and how you can get it back,” said NDBF Deputy Director Claire McHenry. “Always ask if the salesperson and the security are registered with their state or provincial securities regulator.”
Deputy Director McHenry also said investors should be on the lookout for scam artists trying to use the market downturn and the coronavirus to scare investors into so-called “safer, guaranteed investments.” “If you have concerns about your retirement accounts or investments, talk to your financial professional,” Deputy Director McHenry said. “Avoid making decisions based on panic or fear.”
To help investors identify common telltale signs of possible investment fraud, NDBF has provided three questions to ask before making a new investment.
-
First, is the investment being offered with a guaranteed high return with little or no risk?
All investments carry risk that you may potentially lose some or all of your money. Anyone who says their investment offer has no risk is lying. No one can guarantee an investment return.
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Second, is there a sense of urgency or limited availability surrounding the investment?
If the offer is legitimate, it will be there later. If someone offers you a “can’t miss” investment opportunity and puts you on the spot, do not be afraid to walk away.
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Third, is the person offering the investment, and the investment itself, properly licensed or registered?
For the same reasons you would not go to an unlicensed doctor or dentist, you should avoid unregistered investment salespeople and their products.
“Make sure you have all the facts before you hand your money over to someone else to invest,” Deputy Director McHenry said. Deputy Director McHenry also encourages investors to contact NDBF with any questions about the investment professional they are working with or the product being offered.
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
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DDS LICENSE RENEWAL DEADLINE
DDS LICENSE RENEWAL DEADLINE
News Release Date: March 04, 2020
NDBF REMINDS DDS LICENSEES OF May 1, 2020 RENEWAL DEADLINE
The Nebraska Department of Banking and Finance ("NDBF") reminds DDS licensees holding an active Delayed Deposit Services license in Nebraska that it will expire on May 1, 2020.
Nebraska Statutes require that each Delayed Deposit Services Business renew its license annually. Be advised that Section 45-926 of the Delayed Deposit Services Licensing Act prohibits the operation of a Delayed Deposit Services business without a license. Your current license will expire on May 1, 2020.
The 2020 Delayed Deposit Services Renewal Licensing Forms and Instructions are available on the Department web site at https://ndbf.nebraska.gov/industries/delayed-deposit-services-payday-len.... Licensees must use the licensing forms provided on the Department’s website. Forms from previous years will not be accepted.
To renew a DDS Business License, a licensee must submit the following:
1) Delayed Deposit Services Business License Renewal Application and Fee- MUST BE MAILED TO THE NEBRASKA DEPARTMENT OF BANKING AND FINANCE AND BE POSTMARKED NO LATER THAN APRIL 10, 2020.
Companies holding licenses in more than one county, all principal places of business and branches may be submitted on one application.
When you submit the license renewal application, you must include the appropriate renewal fees. The renewal fee is $500 for each principal place of business and $500 for each branch office.
2) Delayed Deposit Services Licensee Annual Report and Supplemental Annual Report for 2019- MUST BE ELECTRONICALLY SUBMITTED TO DOB.CONSUMERFINANCE@NEBRASKA.GOV NO LATER THAN APRIL 10, 2020.
Annual Report and Supplemental Annual Report for 2019 must be submitted for each license #.
3) Delayed Deposit Services Licensee Annual Report- Affidavit
Upon approval of the Annual Report and Supplemental Annual Report, the Department will email the Licensee’s Primary Contact the required Affidavit to be signed and notarized. The individual signing this form is
affirming that to the best of his or her knowledge the information contained in the Annual Report is true.
The completed Affidavit MUST BE MAILED TO THE NEBRASKA DEPARTMENT OF BANKING AND FINANCE.
ONCE APPROVED, RENEWAL LICENSES AND CERTIFICATES OF BRANCH APPROVAL WILL BE MAILED TO THE PRINCIPAL PLACE OF BUSINESS.
You must still file an Annual Report and Supplemental Annual Report, even if you are not renewing your DDS license.
If you have questions, please email dob.consumerfinance@nebraska.gov and include your company name and license number in the subject line or call 402-471-2171.
State Bank Closure
NDBF Closes Ericson State Bank, Ericson, Nebraska
Contacts:
Mark Quandahl, Director Patricia Humlicek Herstein, General Counsel
402-417-8982 402-525-8312
mark.quandahl@nebraska.gov patricia.herstein@nebraska.gov
Main Office: 402-471-2171
FOR IMMEDIATE RELEASE
February 14, 2020 (Lincoln, Neb.) – The Nebraska Department of Banking and Finance (NDBF) announced that at 4:00 p.m. today it closed Ericson State Bank, Ericson, Nebraska, because it was insolvent. NDBF had been closely monitoring the bank for some time and recently made a demand for a capital injection, which was not met.
NDBF named the Federal Deposit Insurance Corporation (FDIC) as receiver of the bank. The FDIC has entered into a purchase and assumption agreement with Farmers and Merchants Bank, Milford, Nebraska. The transaction includes the assumption of all customer deposits. The sole office of Ericson State Bank, located at 427 Central Avenue, Ericson, Nebraska, will be open for business on Tuesday, February 18, 2020, under the name, Farmers and Merchants Bank. Farmers and Merchants Bank is owned by Country Bank Shares, Inc., Milford, Nebraska.
“The failure of Ericson State Bank resulted primarily from large out-of-territory commercial loan losses and poor management practices which led to a deterioration of the bank’s capital. When the capital was not replenished, the Department was left with no option but to place the insolvent institution in receivership,” said Mark Quandahl, NDBF Director. Quandahl noted that the overwhelming majority of Nebraska banks are in a strong condition.
Ericson State Bank was chartered in 1959, and is a subsidiary of Wheeler County Bancshares, Inc., a one-bank holding company, located in Ericson, Nebraska, owned by Debra Poulsen and Jack Poulsen. As of December 31, 2019, Ericson State Bank had total assets of approximately $100.9 Million and total deposits of approximately $95.2 Million.
A copy of a 2019 NDBF regulatory action against the bank can be found at http://www.nebraska.gov/ndbf/searches/Orders/20190923_EricsonStateBank_ConsentOrder.pdf
The most recent closures of Nebraska state-chartered banks occurred November 4, 2011, when Mid City Bank, Inc., Omaha, Nebraska, was declared insolvent, and February 13, 2009, when NDBF closed Sherman County Bank, Loup City, Nebraska. Mid City Bank, Inc. was purchased by Premier Bank, formerly known as Purdum State Bank, Purdum, Nebraska. Sherman County Bank was purchased by Heritage Bank, headquartered in Wood River, Nebraska. Prior to the Loup City closing, no state-chartered bank had been closed since 1989.
Customers with questions about today's transaction should call the FDIC toll-free at
1-877-367-2717.
Interested parties may also visit the FDIC website:
https://www.fdic.gov/bank/individual/failed/banklist.html
Statistical data about the bank may be found at: https://www7.fdic.gov/idasp/confirmation_outside.asp?inCert1=18265
********************************************************************************
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Mark Quandahl and Patti Herstein will be available between 4:00 p.m. – 6:00 p.m. CST on Friday, February 14.
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Mark Quandahl will be available on Saturday, February 15, 9:00 a.m. – 4:00 p.m. CST.
-
The NDBF main office will be closed for the weekend and the Presidents’ Day Holiday on Monday, February 17, and will reopen Tuesday, February 18, from 8:00 a.m. – 5:00 p.m. CST
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A copy of the official release is here:
Single Bank Pooled Method RFP 2020-001 Questions and Responses
Nebraska Department of Banking and Finance
January 24, 2020
Responses to Questions regarding RFP 2020-001
The Nebraska Department of Banking and Finance has issued a Request for Proposal for an Administrator of the Public Funds Security Act Single Bank Pooled Method described in Nebraska Revised Statutes Sections 77-2386 et seq.
The last day to submit questions regarding the RFP was 1/17/2020. Below are the Department’s responses to all questions submitted by the deadline.
RFP can be found at this link: https://ndbf.nebraska.gov/sites/ndbf.nebraska.gov/files/news-release/Banking%20and%20Finance%20RFP2020-001.pdf
“RFP Number 2020-001-Public Funds Security Act Single Bank Pooled Method Questions”
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Solicitation Section Reference |
Solicitation Page Number |
Question |
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#1. |
Scope of Service |
Cover Page |
Does the Department anticipate appointing more than one Administrator? |
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Response to #1 |
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No. However, in the event of the need for a successor Administrator to be appointed, it may be possible that more than one Administrator could be named over the life of the appointment.
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#2. |
Glossary of Terms and Section V., B. 12
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Page viii and page 20
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Should the definition of “public depositor” reflect a reference to “agency” or “state agency” rather than “state entity” as proposed? |
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Response to #2 |
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No. The reference to “public depositors” is to political subdivisions of the State of Nebraska, such as School districts, townships.
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#3. |
Section I., Q. |
Page 6 |
Does NDBF anticipate conducting oral Interviews / presentations? |
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Response to #3 |
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Yes. NDBF will conduct oral interview / presentations if necessary to assist in the Administrator selection.
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#4. |
Section I., Q. |
Page 6 |
If an applicant knows it will not be available for oral interview/presentations during the time frame identified in the RFP, can alternate arrangements be made for this purpose? |
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Response to #4 |
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Yes.
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#5 |
Section I., R. |
Page 6 |
Does NDBF anticipate asking for additional Best and Final Offers? If so, in light of the July 1, 2020, effective date of the law, is this potential factored into the timeline? |
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Response to #5 |
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Yes. If necessary, NDBF will request BAFOs. Potential for BAFOs has been factored into the proposed timeline; however, NDBF reserves the right to adjust the timeline.
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#6 |
Section II., B. |
. Page 8 |
If notifications are intended to apply for issues beyond the appointment of the Administrator, should notification by electronic means be authorized? |
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Response to #6 |
|
Yes.
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#7 |
Section II., M. |
Page 10 |
Since the Administrator is granted the same statutory immunity as the Director/Department of Banking, is a cashier's check or performance bond necessary? |
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Response to #7 |
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A legal conclusion as to the extent of immunity extended to the Administrator has yet to be determined. The Department is requiring a cashier’s check or performance bond of the Administrator. The Director will not consider any applicant administrator unwilling or unable to post such security.
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#8 |
Section II., M, |
Page 10 |
Does the Department intend to require the performance bond or cashier’s check to be provided by the designated Administrator? |
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Response to #8 |
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Yes. The Performance bond or cashier’s check must be provided by the designated Administrator upon appointment.
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#9 |
Section II., M. |
Page 10 |
If a cashier’s check or performance bond in the amount of $100,000 is required to be provided by the designated Administrator, has the cost of the performance bond been factored into the fees that may be charged by the Administrator? |
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Response to #9 |
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No. A performance bond for services to be provided to or on behalf of the State of Nebraska is not extraordinary.
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#10 |
Section II.,M. |
Page 10 |
Can applicant satisfy the contract surety requirements through use of a bank-issued or FHLB-issued letter of credit? |
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Response to #10 |
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Yes, provided the letter of credit can be drawn upon demand by NDBF.
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#11 |
Section II., Q. |
Page 11 |
Should the RFP contain provisions addressing the circumstances under which the applicant may terminate its obligation to administer the program? |
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Response to #11 |
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The RFP and the response of the applicant Administrator must contain all operating understandings between NDBF and Administrator. The applicant Administrator should set forth all circumstances under which the applicant would terminate its obligation to administer the program, or forfeit its appointment.
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#12 |
Section III., B. |
Page 13 |
Parent corporation of applicant currently provides payroll services for applicant. May the parent corporation satisfy the requirement to “use a federal immigration verification system to determine the work eligibility status of employees physically performing services within the appointment period?” |
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Response to #12 |
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Yes.
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#13 |
Section III., E. |
Page 14 |
Would NDBF consider allowing an exception to the restriction on fee increases during the first two years of the appointment or any renewal thereof based on “unanticipated circumstances?” |
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Response to #13 |
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Unknown. NDBF will not speculate on future actions based on unknown circumstances. Any fee increases would be subject to the prior approval of the Director.
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#14 |
Section III., F. |
Page 14 |
How does NDBF anticipate determining “deviation from “industry standards?” |
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Response to #14 |
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By comparison to standard practices of other administrators and entities involved with monitoring, reporting or supervising the pledging of securities to secure public deposits.
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#15 |
Section III., H. |
Page 14 |
Can the RFP be clarified to confirm that applicant shall retain ownership and title of any software or processes developed to automate the program reporting process and the right to patent, license, or copyright, duplicate, transfer, sell, the design, specifications, concept, or deliverable of such software or processes? |
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Response to #15 |
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The RFP and the response of the applicant Administrator must contain all operating understandings between NDBF and Administrator. The applicant Administrator should set forth all ownership and title concerns pertaining to its administration of the program.
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#16 |
Section III., I. 1. |
Page 15 |
Can NDBF clarify who are “contractors’ employees?” |
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Response to #16 |
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Any person employed by the Administrator or Sub-Administrator or who provides services in furtherance of the appointment.
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#17 |
Section III., I. |
Page 16 |
Some of the required coverage limits exceed industry standards and are in excess of the limits currently in place under applicant’s insurance coverages and will result in significant cost increases for applicant. Will NDBF consider lower coverage limits for certain categories of required insurance coverage? |
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Response to #17 |
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The RFP and the response of the applicant Administrator must contain all operating understandings between NDBF and Administrator. The applicant Administrator should set forth any proposed lower insurance coverage limits pertaining to its administration of the program.
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#18 |
Section III., I. |
Page 16 |
One of the required insurance coverages is “Independent Administrators” coverage. It does not appear that this term is utilized within the insurance industry as an acknowledged type of coverage. Would NDBF clarify the specific type of coverage that will satisfy this requirement? |
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Response to #18 |
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Independent Contractor.
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#19 |
Section III., O. |
Page 18 |
Can NDBF provide a timeframe within which the Administrator must comply with changed Nebraska Technology Access Standards in the event of an amendment to the appointment?
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Response to #19 |
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NDBF will consider commercially reasonable time frames for technology compliance in the event of an amendment to the Nebraska Technology Access Standards. Due to the potential of cyber security issues, a standard predetermined time is not practical and the Administrator will need to present compliance concerns to the Director on a case by case basis.
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#20 |
Section III., R. |
Page 18 |
Can NDBF clarify who or what constitutes the “Customer” of the administrator for purposes of the “Warranty” provisions?
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Response to #20 |
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Customer includes all parties reliant upon the services of the Administrator.
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#21 |
Section IV., C. |
Page 19 |
With respect to activities of the State, State Auditor, or Department, will any audit conducted be limited to a review of applicant activity related duties as Administrator of the pooled collateral program or will other applicant-related activities and financial information be subject to audit? |
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Response to #21 |
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The Department is not in a position to limit, restrict or otherwise comment on any audit conducted by the Auditor of Public Accounts.
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#22 |
Section V., F. (3) and Exhibit E – Transactions
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Page 21 and 30 |
Can NDBF explain why provisions requiring the Administrator to pre-approve the acceptance, substitution or withdrawal of any Pledged Securities are included in the RFP? There does not appear to be any statutory authority for requiring prior approval by the Administrator. Section 77–2392 expressly provides that a bank, …shall have the right at any time and without prior approval to substitute or exchange other securities of equal value” subject to the requirement that the substituted or exchanged securities do not reduce the market value of the securities to less than 102% of the public funds required to be collateralized.
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Response to #22 |
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The agreement between the Administrator and bank should provide for advance notice to the Administrator of any security substitutions. The provisions should enable communications preventing pledging gaps or mismatches which may result in non-compliance fees while maintaining required collateralization of public funds. NDBF will consider responses which provide for prior or contemporaneous notice of substitution in lieu of prior approval. The RFP and the response of the applicant Administrator must contain all operating understandings between NDBF and Administrator.
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#23 |
Section V., G. |
Page 22 |
Will the Administrator, in “providing” reports to custodial officials within 20 days after receiving monthly reports from Covered Depositories, be able to satisfy the requirement by posting the required information on the Administrator’s website? |
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Response to #23 |
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If the governmental unit has agreed in advance to receive such reports by accessing the administrator’s website, provision of reports may be accomplished by electronic means.
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#24 |
Section V., G. |
Page 22 |
Should the reports referenced in Section V. G. (1)-(7) be made available only to program participants, rather than being made available to the public? |
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Response to #24 |
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The Department considers the reports referenced to be public records that should be made available to the public.
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#25 |
Section V., G. |
Page 22 |
As of what date is the information in the reports referenced in Section V. G. (1)-(7) to be obtained? |
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Response to #25 |
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The most recent available monthly report, as of the time of the request.
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#26 |
Section V., H. |
Page 22 |
Is the Administrator to retain any “non-compliance fees” received? |
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Response to #26 |
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Yes. So long as the fee reflects non-compliance with the guidance. The Department retains the authority to assess fines and penalties in accordance with the Banking Act.
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#27 |
Section V., H. and Exhibit E – Noncompliance and Remedies |
Page 22 and 31 |
Section V. H. authorizes recovery of non-compliance fee from Custodial Officials. The applicable list of program fees under Exhibit E only addresses non-compliance fees for Covered Depositories and Qualified Trustees and does not make any reference to Custodial Officials under the provisions regarding non-compliance and remedies. Should the RFP be revised to reflect the circumstances under which Custodial Officials may be subject to non-compliance fees? |
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Response to #27 |
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The RFP and the response of the applicant Administrator must contain all operating understandings between NDBF and Administrator. The applicant Administrator should set forth any proposed circumstances under which Custodial Officials may be subject to non-compliance fees.
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#28 |
Exhibit E – Month-end Bank Report of Deposits and Monthend Qualified Trustee Report
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Page 29 and 30 |
The bank reporting requirement relating to “deposits” and the Qualified Trustee reporting requirement, contain categories of information relating to collateral at items r) and s), relating to face or par value and market value of securities pledged. Should these categories of information be deleted? If not, there would appear to be no statutory basis to require this information to be provided on a daily basis |
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|
Response to #28 |
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The listed reporting requirements are considered to be essential for the Department to evaluate the Administrator’s performance. The RFP and the response of the applicant Administrator must contain all operating understandings between NDBF and Administrator. The applicant Administrator should set forth any proposed format and information to be contained on the report, the timeliness of said report and the justification for the same.
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|
#29 |
Exhibit E – Month-end Bank Report of Deposits
|
Page 29 |
Does a requirement for covered depositories to report daily balances of deposits only apply if a deposit guarantee bond is utilized for pledging purposes? (See Section 77-2394)
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Response to #29 |
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No. Administrator is to enable a process to confirm collateralization coverage, appropriately protecting public deposits.
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#30 |
Exhibit E – Program Fees
|
Page 30 |
Will NDBF consider allowing a higher maximum application fee if application fees are tiered based on bank asset sizes? |
|
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Response to #30 |
|
The RFP and the response of the applicant Administrator must contain all operating understandings between NDBF and Administrator. The applicant Administrator should set forth any proposed higher maximum application fees based on bank asset size and the justification for the same.
|
|
#31 |
Exhibit E – Program Fees
|
Page 30 |
Will NDBF consider allowing an annual administration fee? |
|
|
Response to #31 |
|
The RFP and the response of the applicant Administrator must contain all operating understandings between NDBF and Administrator. The applicant Administrator should set forth any proposed annual administration fee and the justification for the same.
|
|
#32 |
Section VI., B. 2. |
Page 33 |
This section requires specifically named individuals who will be working on NDBF’s project to be identified and for resumes to be provided to NDBF for review. At this time, applicant is unsure as to whether it will appoint a current employee or employees to fill this administrative role or if it will hire new personnel for this purpose. May applicant simply designate individuals in leadership/supervisory roles who will ultimately be responsible for supervisions and for whom responsible individuals will ultimately report, to satisfy this requirement? |
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Response to #32 |
|
Yes.
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#33 |
General |
N/A |
If pending legislation (LB 854) is adopted, will the program requirements and forms be revised to reflect any such statutory changes? |
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Response to #33 |
|
Yes.
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|
#34 |
General |
N/A |
Will NDBF allow proposed forms and agreements (Exhibits B, C, D, and E) to be modified, based on anticipated input from participants (Covered Depositories, Custodial Officials and Qualified Trustees)? |
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|
Response to #34 |
|
Yes. The RFP and the response of the applicant Administrator must contain all operating understandings between NDBF and Administrator. The applicant Administrator should set forth any proposed forms and agreements and the justification for the same.
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Single Bank Pooled Method Administrator RFP
Nebraska Department of Banking and Finance
January 10, 2020
Notice of Request for Proposal
The Nebraska Department of Banking and Finance has issued a Request for Proposal for an Administrator of the Public Funds Security Act Single Bank Pooled Method described in Nebraska Revised Statutes Sections 77-2386 et seq.
The due date and time for responses to the RFP is 2:00 p.m. Central Standard Time on February 14, 2020.
All information pertinent to this request can be found on the Department’s webpage at https://ndbf.nebraska.gov/
Questions regarding the RFP should be submitted to Nebraska Department of Banking and Finance Director Mark Quandahl at mark.quandahl@nebraska.gov.
Single Bank Pooled Method Administrator RFP
2019
NDBF ANNOUNCES TOP INVESTOR THREATS FOR 2020
December 17, 2019 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (NDBF) today announced the top five investment products or schemes likely to trap Nebraska’s investors in the New Year and recommended steps they can take to protect themselves from investment fraud.
The list was developed by surveying members of the North American Securities Administrators Association, of which NDBF is a member, to identify threats investors are likely to see in 2020. The following were most frequently identified by NASAA members as the top five areas of concern for the coming year:
• Promissory Notes
• Ponzi Schemes
• Real Estate-related Investments
• Cryptocurrency-related Investment Products
• Social Media/Internet-based Investment Schemes
"It is important for investors to understand what they are investing in and who they are investing with. Don’t fall for promises of guaranteed high returns with little to no risk or deals pitched with a false sense of urgency or limited availability," said Deputy Director Claire McHenry. "Before you ring in the New Year, make a resolution to protect your money from fraudulent investments and those who may be trying to fleece you."
Investment offers that sound "too good to be true" often share similar characteristics. The most common telltale sign of an investment scam is an offer of guaranteed high returns with no risk. All investments carry the risk that some, or all, of the invested funds could be lost. "Anyone who says their investment offer has no risk is lying," Deputy Director McHenry said. "No one can guarantee an investment return. Remember if it sounds too good to be true, it usually is."
Many of the threats facing investors involve private offerings, which are exempt from federal securities registration requirements and are not sold through public stock exchanges. "Unregistered private offerings generally are high-risk investments and don’t have the same investor protection requirements as investments sold through public markets," Deputy Director McHenry said.
Investors should always ask if the salesperson and the investment itself are properly licensed or registered. This information can be confirmed by the NDBF. Working with a properly licensed investment professional affords investors certain legal protections. "For the same reasons you wouldn’t go to an unlicensed doctor or dentist, you should avoid unregistered investment salespeople and their products," Deputy Director McHenry said.
Information about each of the 2020 investor threats and contact information for all state and provincial securities regulators can be found on NASAA’s website at www.nasaa.org. NDBF also offers a wide range of free investor education materials and can help investors research the background of those selling or advising the purchase of an investment. NDBF can be reached at (402) 471-3445 or through its website at https://ndbf.nebraska.gov/.
#####
BlueExpress Electronic Securities Filing Outage and Update
December 2, 2019 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (NDBF) announced today that ClearSky is conducting updates to its BlueExpress filing solution. Filers using BlueExpress to file Form NF for mutual fund filings should be aware of scheduled disruptions to electronic filings and a change required in order to continue electronic filing.
Filers should expect an electronic filing outage on Thursday, January 9, 2020 in order for ClearSky to complete and verify the migration and confirm state access to the new filing database. Filers will also need to update the BlueExpress State URL. NDBF notified electronic filers of the required update. If you did not receive the notification or otherwise need assistance, please contact NDBF at DOB.SecuritiesFiling@nebraska.gov or 402-471-3445.
ClearSky provided NDBF with the following schedule:
Date:
January 8, 2020 Final day to use current BlueExpress State URL
January 9, 2020 Electronic filing outage for all filers
January 10, 2020 Electronic filing to resume using new BlueExpress State URL
###
SECURITIES LICENSE RENEWAL DEADLINE
NDBF REMINDS INVESTMENT ADVISERS, BROKER-DEALERS OF DECEMBER 31, 2019 RENEWAL DEADLINE
November 1, 2019 (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, 2019. 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, 2020.
State-registered investment adviser and investment adviser representative deadlines:
• By December 20, 2018 – Submit Nebraska specific forms and documentation to NDBF
• Before December 26, 2018 – Submit renewal payments through CRD/IARD
• Before December 26, 2018 – Submit required electronic form filings through CRD/IARD
FINRA broker-dealer and agent deadlines:
• Before December 26, 2018 – Submit renewal payments through CRD/IARD
• Before December 26, 2018 – 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 20, 2019
###
Industry Advisory
Department of Banking and Finance
Industry Advisory
NDBF OFFERS RESOURCES TO HELP INVESTMENT PROFESSIONALS WORK WITH CLIENTS AFFECTED BY THE OPIOID EPIDEMIC
October 28, 2019 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (NDBF) today announced the availability of resources to raise awareness of the impact of the opioid epidemic on investment professionals and their clients, especially senior investors.
"The opioid crisis in North America is devastating families and our communities. It is also a rising contributor to elder financial abuse," said NDBF Deputy Director Claire McHenry.
The U.S. Department of Health and Human Services in 2017 declared opioid abuse a public health emergency and estimated in 2017 that 11.4 million Americans misused prescription opioids. Recent research by Virginia Tech’s Center for Gerontology and the Elder Justice Coalition identified a connection between opioid abuse and elder abuse, including financial exploitation.
Deputy Director McHenry said the agency is offering two new resources to help raise awareness of how the opioid crisis impacts investment professionals and their clients.
The first is a guide to help investment professionals understand the many ways opioid use disorder might affect their clients, how to spot signs of financial exploitation, and how to help clients affected by opioid abuse. The guide also includes a list of helpful resources. The second resource consists of conversation starters financial professionals can use to help start a dialogue with clients about the financial ramifications of opioid addiction.
"Investment adviser representatives and broker-dealer agents are well positioned to be part of the solution, but they have to be prepared to talk to clients in crisis," Deputy Director McHenry said. "The cost of opioid addiction and treatment can have major financial ramifications. Clients facing opioid addiction – either themselves or within the family – may be strapped for resources and can be vulnerable to poor financial decision-making or even fraud."
The resources are also available on the agency’s website ndbf.nebraska.gov.
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
###
Pooled Collateral RFI
Nebraska Department of Banking and Finance
September 27, 2019
Notice of Request for Information
The Nebraska Department of Banking and Finance has issued a Request for Information for gathering information from qualified parties interested in serving as administrator of a Single Bank Pooled Collateral program as set forth in LB 622 of the 2019 Nebraska Legislature.
The due date and time for responses to the RFI is 2:00 p.m. Central Daylight Time on November 1, 2019.
All information pertinent to this request can be found on the Department’s webpage at https://ndbf.nebraska.gov/
Questions regarding the RFI should be submitted to Nebraska Department of Banking and Finance Director Mark Quandahl at mark.quandahl@nebraska.gov
RFI Pooled Collateral 2019 FINAL September 19 2019
Consumer Advisory Opportunity Zone Investments
NDBF ISSUES ADVISORY ON OPPORTUNITY ZONE INVESTMENTS
August 6, 2019 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (NDBF) today issued an advisory to raise awareness of the risks associated with investments in opportunity zones, economically distressed communities where new investments, under certain conditions, may be eligible for preferential tax treatment as part of the 2017 Tax Cuts and Jobs Act.
“This program provides an opportunity to strengthen investments in low-income communities and rural areas that traditionally struggled to attract the capital necessary to spur economic growth and job creation,” Deputy Director Claire McHenry said.
Investors attracted to opportunity zone investments for the potential tax benefits and promise of return on investment should weigh various factors before deciding to invest. The advisory discusses how opportunity zone investments work, the risks investors should understand when considering opportunity zone investments, and steps investors can take to protect themselves.
The full advisory is available on the agency’s website ndbf.nebraska.gov.
Separately, the North American Securities Administrators Association (NASAA), of which NDBF is a member, and the U.S. Securities and Exchange Commission (SEC) recently issued a summary that explains the application of the federal and state securities laws to opportunity zone investments.
The summary also provides an overview of the SEC and state requirements relating to qualified opportunity funds and their securities offerings, broker-dealer registration, and considerations for advisers to a qualified opportunity fund. The summary is available on the NASAA website http://www.nasaa.org/wp-content/uploads/2019/07/Opportunity-Zones-NASAA-SEC-Staff-Statement.pdf
Before making any financial decisions, ask questions, do your homework and contact NDBF at (402) 471-3445 for more information.
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
Consumer Advisory - Opportunity ZOne.pdf
Informed Investor Advisory - Opportunity Zone.pdf
###
NOTICE OF RULEMAKING HEARING
NEBRASKA DEPARTMENT OF BANKING AND FINANCE
Notice is hereby given that the Nebraska Department of Banking and Finance will hold a rulemaking hearing on August 19, 2019, commencing at 1:30 p.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:
1) The proposed revision of 48 NAC Chapters 2, 4, 5, 7, 10, 12, 18, 20, and 21.
2) The proposed outright repeal of 48 NAC Chapters 17, 22-34, and 36.
48 NAC 2—Definitions. The purpose of the proposed amendments is to repeal definitions that are no longer necessary due to the proposed amendments to 48 NAC 21, and the proposed outright repeal of 48 NAC 22-34, and 36. The proposal also clarifies existing definitions and adopts a definition of the term "Department."
48 NAC 4—Broker-Dealers. The purpose of the proposed amendments is to eliminate requirements for manual signatures and the payment of filing fees by physical checks or money orders.
48 NAC 5—Issuer-Dealers. The purpose of the proposed amendments is to eliminate requirements for manual signatures and the payment of filing fees by physical checks or money orders.
48 NAC 7—Investment Advisers. The purpose of the proposed amendments is to adopt cybersecurity requirements for investment advisers. In addition, the proposed amendments eliminate requirements for manual signatures and the payment of filing fees by physical checks or money orders.
48 NAC 10—Recordkeeping by Investment Advisers. The purpose of the proposed amendments is to amend recordkeeping requirements for investment advisers as related to cybersecurity.
48 NAC 12—Fraudulent, Dishonest and Unethical Business Practices. The purpose of the proposed amendments is to provide that an investment adviser’s use of a client’s password to access the client’s account is a dishonest and unethical business practice. The rule further provides that an investment adviser’s failure to establish, maintain and enforce a required policy is a dishonest and unethical business practice.
48 NAC 17—Uniform Limited Offering Exemption. This chapter is proposed for outright repeal as such rule is no longer necessary as a result of the United States Securities and Exchange Commission’s repeal of Regulation D, Rule 505, 17 CFR 230.505.
48 NAC 18—Information Requirements for the Section 8-1111(20) Nebraska Intrastate Issuer Exemption. The purpose of the proposed amendments is to eliminate
requirements for manual signatures and the payment of filing fees by physical checks or money order.
48 NAC 20—Federal Covered Securities. The purpose of the proposed amendments is to eliminate the requirement that issuers offering securities in Nebraska pursuant to the Securities & Exchange Commission ("SEC") Regulation A, Tier 2 use a broker-dealer, provided no commissions or other remuneration are paid as provided by LB 259 (2019). The proposal also eliminates requirements that filing fees be paid by physical check or money order.
48 NAC 21—Underwriting Expenses, Underwriter’s Warrants, Selling Expenses, and Selling Securities Holders. The purpose of the proposed amendment is to replace this rule with a rule captioned "North American Securities Administrator Association Statements of Policy." The rule incorporates by reference Statements of Policy adopted by the North American Securities Administrators Association ("NASAA") and requires issuers registering offerings to comply with the requirements of the Statements of Policy. The following NASAA Statements of Policy are proposed for adoption:
1) "Statement of Policy Regarding Corporate Securities Definitions" as amended on May 6, 2018.
2) "Statement of Policy Regarding Underwriting and Selling Expenses, Underwriter’s Warrants and Selling Expenses" as amended on May 6, 2018.
3) "Statement of Policy Regarding Promotional Shares" as amended on March 31, 2008.
4) "Statement of Policy Regarding Promoters’ Equity Investment" as amended on September 11, 2016.
5) "Statement of Policy Regarding Loans and Other Material Transactions" as amended on May 6, 2018.
6) "Statement of Policy Regarding the Impoundment of Proceeds" as amended on March 31, 2008.
7) "Statement of Policy Regarding Unequal Voting Rights" as amended on September 11, 2016.
8) "Statement of Policy Regarding Specificity in Use of Proceeds" as amended on September 11, 2016.
9) "Statement of Policy Regarding Unsound Financial Condition" as amended on May 6, 2018.
10) "Statement of Policy Regarding Debt Securities" as adopted on April 25, 1993.
11) "Statement of Policy Regarding Preferred Stock" as amended on September 11, 2016.
12) "Statement of Policy Regarding Options and Warrants" as amended on March 31, 2008.
13) "Statement of Policy Regarding Real Estate Investment Trusts" as amended on May 7, 2007.
14) "Statement of Policy Regarding Real Estate Programs" as amended on May 7, 2007.
15) "Registration of Oil and Gas Programs" as amended on May 6, 2012.
16) "Registration of Publicly-Offered Cattle Feeding Programs" as adopted on September 17, 1980.
17) "Registration of Commodity Pool Programs" as amended on May 6, 2012.
18) "Equipment Programs" as amended on May 6, 2012.
19) "Registration of Asset Backed Securities" as amended on May 6, 2012.
20) "Statement of Policy Regarding Church Extension Fund Securities" as amended on April 18, 2004.
21) "Mortgage Program Guidelines" as amended on May 7, 2007.
22) "Omnibus Guidelines" as amended on May 7, 2007.
23) "Statement of Policy Regarding Use of Electronic Offering Documents and Electronic Signatures" as adopted on May 7, 2017.
48 NAC 22—Promotional Shares. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 23—Promoter’s Equity Investment. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 24—Loans and Other Material Affiliated Transactions. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 25—Impoundment of Proceeds. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 26—Unequal Voting Rights. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 27—Specificity Regarding Use of Proceeds. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 28—Unsound Financial Condition. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 29—Debt Securities. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 30—Preferred Stock. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 31—Options and Warrants. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 32—Real Estate Investment Trusts. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 33—Limited Partnerships. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 34—Registration of Asset Backed Securities. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
48 NAC 36—General Obligation Financing by Religious Denominations. This chapter is proposed for outright repeal due to the adoption of the NASAA Statements of Policy in the proposed amendments to 48 NAC 21.
The rulemaking hearing is being conducted under and by virtue of the provisions of Section 84-907, R.R.S 1943, as amended, which provides that COPIES OF THE PROPOSED RULES ARE AVAILABLE FOR PUBLIC EXAMINATION at the Office of the Department of Banking and Finance, 1526 K Street, Suite 300, Lincoln, Nebraska 68508, and at the Office of the Secretary of State, 1201 N Street, Suite 120, Lincoln, Nebraska 68509. In addition, the proposed rules are available on the Department of Banking and Finance’s website at https://ndbf.nebraska.gov, and the Secretary of State’s website www.sos.ne.gov.
A copy of the Fiscal Impact Statement is available at the Office of the Department of Banking and Finance and on the Department’s website.
All interested persons are invited to attend and testify at the hearing. Interested persons may also submit written comments to the Department of Banking and Finance prior to the hearing, which comments will be made part of the hearing record at the time of the hearing.
If auxiliary aids or reasonable accommodations are needed for attendance at this hearing, please call the Nebraska Department of Banking and Finance at (402) 471-2171, or, for persons with hearing impairments, please call the Nebraska Relay System, (800) 833-7352 TDD. This contact should be made at least seven (7) days prior to the hearing.
Dated at Lincoln, Nebraska, this 11th day of July, 2019.
Claire McHenry, Deputy Director—Securities
Nebraska Department of Banking and Finance
- Title 48 Changes
- TITLE 48 CHAPTER 02.pdf
- TITLE 48 CHAPTER 04.pdf
- TITLE 48 CHAPTER 05.pdf
- TITLE 48 CHAPTER 07.pdf
- TITLE 48 CHAPTER 10.pdf
- TITLE 48 CHAPTER 12.pdf
- TITLE 48 CHAPTER 17.pdf
- TITLE 48 CHAPTER 18.pdf
- TITLE 48 CHAPTER 20.pdf
- TITLE 48 CHAPTER 21.pdf
- TITLE 48 CHAPTER 22.pdf
- TITLE 48 CHAPTER 23.pdf
- TITLE 48 CHAPTER 24.pdf
- TITLE 48 CHAPTER 25.pdf
- TITLE 48 CHAPTER 26.pdf
- TITLE 48 CHAPTER 27.pdf
- TITLE 48 CHAPTER 28.pdf
- TITLE 48 CHAPTER 29.pdf
- TITLE 48 CHAPTER 30.pdf
- TITLE 48 CHAPTER 31.pdf
- TITLE 48 CHAPTER 32.pdf
- TITLE 48 CHAPTER 33.pdf
- TITLE 48 CHAPTER 34.pdf
- TITLE 48 CHAPTER 36.pdf
- Fiscal Impact Statement
- NASAA Statement of Policy
- Asset Backed Securities
- Cattle Feeding Programs
- Church Extension Fund Securities
- Commodity Pool Programs
- Corporate Securities Definitions
- Debt Securities
- Electronic Offering Documents and Electronic Signatures
- Equipment Programs
- Impoundment of Proceeds
- Loans and Other Material Transactions
- Mortgage Program Guidelines
- Oil and Gas Programs
- Omnibus Guidelines
- Options and Warrants
- Preferred Stock
- Promoters Equity Investment
- Promotional Shares
- Real Estate Investment Trusts
- Real Estate Programs
- Specifity in Use of Proceeds
- Underwriting Expenses
- Unequal Voting Rights
- Unsound Financial Condition
NDBF RECOGNIZES WORLD ELDER ABUSE AWARENESS DAY
NDBF RECOGNIZES WORLD ELDER ABUSE AWARENESS DAY
WARNS OF DANGER SIGNS FOR SUSPECTED FINANCIAL ABUSE
June 14, 2019 (LINCOLN, NEB.) — In recognition of World Elder Abuse Awareness Day (WEAAD) on June 15, the Nebraska Department of Banking and Finance (NDBF) reminds financial professionals and the public throughout Nebraska to be on the lookout for elder financial abuse, including potential exploitation by family members or caretakers.
“Senior financial exploitation is a growing problem. Many in our elderly population are vulnerable due to social isolation and distance from family, caregiver, and other support networks,” Deputy Director Claire McHenry said. “Taking the time to understand the warning signs and the steps that can be taken to report financial abuse are key to helping those who cannot help themselves.”
The North American Securities Administrators Association (NASAA), of which NDBF is a member, has developed resources to help call attention to the red flags of fraud and suspected guardian financial abuse. For example, the “Guarding the Guardians” publication provides examples of exploitation and information on how to report suspected abuse.
Examples of suspected guardian abuse include:
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The guardian takes money from the protected individual’s investment portfolio to buy a flashy car for personal use.
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The guardian overcharges for a caregiving service, such as billing the estate hourly for wait time to file paperwork in person when it could have been submitted online.
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The guardian does not take the protected individual to medical appointments or purchase necessary medication.
The publication as well as other resources to help seniors are available on NASAA’s Serve Our Seniors website at serveourseniors.org/about/investors/. Other senior investor protection resources are available on the NDBF’s website at ndbf.nebraska.gov.
Financial and investment professionals also are encouraged to contact the agency to request a Senior$afe presentation on how to spot and report suspected senior financial exploitation.
Deputy Director McHenry asks anyone with suspicions of possible senior financial exploitation to contact the agency at 402-471-2171.
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
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Consumer Advisory: Robo-Advisers
May 20, 2019 (LINCOLN, NEB.) — Investors are increasingly turning to robo-advisers to help them manage their portfolios. Easy-to-use smartphone apps and online portals make setting up an account with a robo-adviser convenient and quick, which is contributing to their increasing popularity.
The Nebraska Department of Banking and Finance (NDBF) today issued an investor awareness advisory providing information and resources to help investors better understand robo-advisers. The advisory discusses how robo-advisers work and things to consider when investing with a robo-adviser.The full advisory is available on the agency’s website here https://ndbf.nebraska.gov/about/news-publications.
Robo-advisers are relatively new to the investing landscape. Before making any financial decisions, ask questions, do your homework.
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
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Consumer Advisory
LPL Financial to pay $499,000 to Nebraska for Securities Violations
April 30, 2019 (Lincoln, Nebraska) – The Nebraska Department of Banking and Finance (NDBF) announced today that LPL Financial has paid the State of Nebraska $499,000 as part of a nationwide settlement of claims that it sold unregistered securities.
“This settlement sends a strong message that states hold firms accountable and continue to serve a vital role in protecting investors,” Deputy Director Claire McHenry said.
The settlement stems from a multi-state investigation led by Alabama and Massachusetts. State securities regulators concluded that LPL offered and sold unregistered, non-exempt securities and failed to reasonably supervise the flow of information to ensure full and proper compliance with state securities registration requirements.
The settlement also found that LPL violated state securities laws by failing to maintain books and records, failing to effectively supervise its agents and staff, and that it was negligent in cancelling certain third-party services critical for compliance with state securities requirements.
In total, LPL will pay $26 million in civil penalties among the states. Additionally, LPL will offer to repurchase from investors’ securities held in LPL accounts determined to have been unregistered, non-exempt equity or fixed-income securities sold since October 1, 2006, plus 3% interest.
The settlement amount includes a $60,000 fine, $80,000 in costs to the Department, and $359,000 to be paid to the Department of Banking and Finance Settlement Cash Fund. The settlement funds will primarily be utilized to further financial literacy programs for K-12 Nebraska students.
A copy of the Consent Order is available on the Department’s website http://www.nebraska.gov/ndbf/searches/Orders/20190410_LPLFinancialLLC_ConsentOrder.pdf
More information about the laws governing the financial industries in Nebraska can be found on the Department’s website at 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.
Consumer Advisory - LPL Settlement.pdf
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NDBF NOW ACCEPTING ONLINE FILING FOR UNIT INVESTMENT TRUSTS
April 22, 2019 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (NDBF) today announced that the North American Securities Administrators Association’s (NASAA) Electronic Filing Depository (EFD) System has been expanded to accommodate the electronic filing of Form NF-UIT notice filings for unit investment trusts (UITs) with the NDBF.
Developed by NASAA, 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.
“By continuing to embrace technology, states are providing more innovative capital formation solutions to benefit issuers and investors alike,” NDBF Deputy Director Claire McHenry said.
Nebraska is among a growing number of states participating in the online filing of Form NF-UIT and among the 48 states participating in the online EFD system for Form D. Future system enhancements are being considered to accommodate the electronic filing of Form NF-Mutual Funds and franchise filings.
The Department’s expansion of online filing for unit investment trusts helps grow Nebraska and further the state’s mission of creating opportunities through more effective, more efficient and consumer focused state government.
The EFD website also enables the public to search and view, free of charge, filings made through EFD with state securities regulators. EFD is available at: https://www.efdnasaa.org.
“If you have questions about a particular offering, you should contact the NDBF,” McHenry said.
Issuers or investors with questions about EFD can contact the NDBF at (402) 471-3445.
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.
Consumer Advisory - Online UIT Filings.pdf
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NEO 1 % Disaster Loans
Nebraska Energy Office 1% Energy Related Disaster loans through Nebraska Financial Institutions
The Nebraska Department of Banking and Finance and the Nebraska Energy Office (NEO) presented a webinar on April 12, 2019. The webinar focused on the NEO Dollar and Energy Savings Loan Program 1% loans to assist those impacted by floods to repair their homes, provided the home has not been condemned.
Please click here for a copy of the full webinar:
NDBF & NEO 1 % Disaster Loans Webinar
Please click here for the slide deck with updated phone numbers since the call:
Nebraska Energy Office 1%
Nebraska Energy Office 1% Energy Related Disaster loans through Nebraska Financial Institutions
Nebraska Financial Institutions should be aware of important changes to the Nebraska Energy Office’s Dollar and Energy Savings Loan Program. The NEO has adjusted its Dollar and Energy Savings Loan program to make it more attractive to Nebraska Financial Institutions and more helpful to Nebraskans affected by the recent weather disasters.
Effective immediately, the Nebraska Energy Office (NEO) is offering Dollar and Energy Savings Loan Program 1% loans to assist those impacted by floods to repair their homes, provided the home has not been condemned.
Project applications need to be submitted to your Nebraska-based lender and the NEO office prior to installation for verification of compliance with program requirements. However, if emergency improvements have been made, and you wish to apply for the 1% program with your lender, NEO will consider prior improvements provided installed equipment and materials meet program requirements. NEO is also waiving the requirement that the property needs to be at least 5 years old for this offering.
This program will end August 1, 2019. All necessary project forms and additional information can be obtained here:
Getting a Loan for Prequalified Projects.
Additional questions, please contact energy@nebraska.gov
Representatives from Department of Banking and Finance and the Nebraska Energy Offices will hold a webinar to provide information and take questions from interested Nebraska Financial Institutions on the NEO’s Disaster Assistance 1% Dollar and Energy Savings Loan Program
Event Information: Nebraska Energy Office 1% Disaster Loans
Time: 9:00 am CST to 10:00 am CST April 12, 2019
https://nvcn-cio.webex.com/nvcn-cio/onstage/g.php?MTID=e116112b646a7f8667e5861c73e9ab420
NDBF PROMOTES THE IMPORTANCE OF FINANCIAL LITERACY
April 2, 2019 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (NDBF) today announced its support of Financial Literacy Month, a nationwide investor awareness initiative that invites people to improve their understanding of financial principles and best practices.
"Educating investors of all ages empowers them to make sound financial choices," said Deputy Director Claire McHenry.
For this year’s Financial Literacy Month campaign, NDBF is focusing on raising awareness among millennials, those born between 1981 and 1996, of the importance of investing and protecting those investments from financial predators.
"Financial literacy is important for the financial future of Nebraska. We cannot afford to let the next generation embark on these critical early investing years without the financial literacy and awareness they will need," McHenry said.
A recent survey by the North American Securities Administrators Association (NASAA), of which the NDBF is a member, found that three-quarters of millennials (76 percent) said they do not have a brokerage account to hold investments such as stock, bonds, mutual funds or retirement assets. Among those who do invest, nearly half (46 percent) said they were not concerned about their financial security in retirement.
"This shows a gap in understanding of how to build wealth for a financially secure retirement. I encourage investors, or those thinking about investing, to visit our website, which offers a variety of investor awareness and protection resources." McHenry said.
Investors also are encouraged to contact NDBF before making an investment decision to learn more about the investment product and the person offering it for sale. "One quick call is all it takes," McHenry said. "Education is an investor’s best defense against investment fraud and best tool to build a strong financial future."
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
Consumer Advisory - Financial Literacy Month.pdf
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WATCH FOR SCAMS AFTER NEBRASKA FLOODING
March 21, 2019 (LINCOLN, NEB.) In the aftermath of widespread damage from the recent flooding throughout Nebraska, the Nebraska Department of Banking and Finance (NDBF) cautioned investors to watch out for opportunistic investment scams.
“Nebraskans have big hearts and are looking for ways to help out communities and neighbors impacted by flooding. However, we know from experience that financial predators are out there trying to seek profit from the misfortune of others,” said NDBF Director Mark Quandahl. “Unsolicited investment offers seeking to capitalize on the aftermath of the flooding should be approached with extreme caution.”
NDBF Deputy Director Claire McHenry reminded investors to watch for red flags of disaster-related scams, including unsolicited email, social media messages, crowdfunding pitches or telephone calls promoting investment pools or bonds to help flood victims, water-removal or purification technologies, electricity-generating devices and distressed real estate remediation programs. She said that scam artists may linger long after the flood waters have receded to prey on victims who anticipate receiving large lump-sum insurance settlements for damaged property and other losses.
NDBF offered three tips to help investors avoid disaster-related scams:
•Delete unsolicited emails or social media messages and hang up on aggressive cold callerspromoting flood-related investments, especially those from small companies touting unprovenor new technologies or products.
•Use common sense. Claims of guaranteed returns or low/no investment risk are classic redflags. Every investment involves some degree of risk.
•Do your homework. Contact NDBF to check that both the seller and investment are licensedand registered. If not, they may be operating illegally. Contact information for other statesecurities regulators is available on www.nasaa.org.
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
NDBF Press Release - Nebraska Flooding - Scams Alert (03-21-2019)
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Legislative Bills Approved March 8 2019
Legislative Bills 258 & 259 with Effective date March 8, 2019 and LB 355 has Various Operational Dates.
For more information about the Legislative Bills please Click the below pdf links for the respective bills.
Legislative Bill 258 - Effective March 8, 2019
Legislative Bill 259 - Effective March 8, 2019
Legislative Bill 355 - Various Operational Dates
DDS LICENSE RENEWAL DEADLINE
NDBF REMINDS DDS LICENSEES OF May 1, 2019 RENEWAL DEADLINE
The Nebraska Department of Banking and Finance ("NDBF") reminds DDS licensees holding an active Delayed Deposit Services license in Nebraska that it will expire on May 1, 2019.
Nebraska Statutes require that each Delayed Deposit Services Business renew its license annually. Be advised that Section 45-926 of the Delayed Deposit Services Licensing Act prohibits the operation of a Delayed Deposit Services business without a license. Your current license will expire on May 1, 2019.
The 2019 Delayed Deposit Services Renewal Licensing Forms and Instructions are available on the Department web site at https://ndbf.nebraska.gov/industries/delayed-deposit-services-payday-len.... Licensees must use the licensing forms provided on the Department’s website. Forms from previous years will not be accepted.
To renew a DDS Business License, a licensee must submit the following:
1) Delayed Deposit Services Business License Renewal Application and Fee- MUST BE MAILED TO THE NEBRASKA DEPARTMENT OF BANKING AND FINANCE AND BE POSTMARKED NO LATER THAN APRIL 12, 2019.
Companies holding licenses in more than one county, all principal places of business and branches may be submitted on one application.
When you submit the license renewal application, you must include the appropriate renewal fees. The renewal fee is $500 for each principal place of business and $500 for each branch office.
2) Delayed Deposit Services Licensee Annual Report and Supplemental Annual Report for 2018- MUST BE ELECTRONICALLY SUBMITTED TO DOB.CONSUMERFINANCE@NEBRASKA.GOV NO LATER THAN APRIL 12, 2019.
Annual Report and Supplemental Annual Report for 2018 must be submitted for each license #.
3) Delayed Deposit Services Licensee Annual Report- Affidavit
Upon approval of the Annual Report and Supplemental Annual Report, the Department will email the Licensee’s Primary Contact the required Affidavit to be signed and notarized. The individual signing this form is affirming that to the best of his or her knowledge the information contained in the Annual Report is true.
The completed Affidavit MUST BE MAILED TO THE NEBRASKA DEPARTMENT OF BANKING AND FINANCE.
ONCE APPROVED, RENEWAL LICENSES AND CERTIFICATES OF BRANCH APPROVAL WILL BE MAILED TO THE PRINCIPAL PLACE OF BUSINESS.
You must still file an Annual Report and Supplemental Annual Report, even if you are not renewing your DDS license.
If you have questions, please email dob.consumerfinance@nebraska.gov and include your company name and license number in the subject line or call 402-471-2171.
NDBF Participates in National Investor Awareness Campaigns
February 25, 2019 (LINCOLN, NEB.) —The Nebraska Department of Banking and Finance (NDBF) is participating in America Saves Week and Military Saves Week, February 25-March 2, to help raise awareness among investors, especially those entering the workforce or those early in their careers, of the importance of safeguarding their financial futures.
"Building a safe and secure financial future it is critical for all generations and we must ensure this important message is making its way to Millennials," said Deputy Director Claire McHenry.
The nation’s 75 million Millennials, those born between 1981 and 1996, have surpassed Baby Boomers as the largest demographic in the United States. With nearly a quarter of the entire U.S. population, Millennials also make up nearly two-fifths of all working age Americans – those saving and investing to build retirement nest eggs.
"Millennials either are just coming of age or are starting to get serious about building wealth for their financial futures. At the same time, many are straddled with student loan debt, are ill-equipped with the financial literacy tools necessary to build their future and may become susceptible to go-to promise of con artists: high returns for low risk," Deputy Director McHenry said.
To help promote investor awareness and protection, the NDBF is providing three quick tips.
1. Watch for the Red Flags of Fraud. "If it sounds too good to be true, it usually is," Deputy Director McHenry said.
2. Understand Who You Are Doing Business With. "Many of us spend more time reading restaurant’s reviews than researching the background of our stockbroker or investment adviser," she said.
3. Know where to turn for help. "Your state securities regulator is just a click or call away," Deputy Director McHenry said.
NDBF can provide detailed information about an investment product, broker or adviser. This information is free and easy to obtain. For more information, please contact NDBF at (402) 471-3445 or online at www.ndbf.nebraska.gov.
NDBF is a proud partner in America Saves Week and Military Saves Week, national public awareness campaigns led by the Consumer Federation of America to motivate people to save for their financial future. To learn more, visit www.americasaves.org.
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.
Consumer Advisory - Military Saves Week.pdf
Informed Investor Advisory Military Saves.pdf
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Electronic Surety Bond Adoption
Electronic Surety Bond Adoption
EFFECTIVE February 1, 2019
On January 25, 2019 the Director of the Nebraska Department of Banking and Finance signed the Order Adopting Acceptance of Electronic Surety Bonds for Mortgage Bankers, Installment Loan Licensees, Installment Sales Licensees and Money Transmitter Licensees. Effective February 1, 2019, Electronic Surety Bond (ESB) tracking will be managed through NMLS for the following license types:
• Mortgage Banker License
• Mortgage Banker Registration
• Installment Loan License
• Installment Sales License
• Installment Sales Registration
• Money Transmitter License
Management of ESBs through NMLS will allow for the tracking of surety bond requirements and the maintenance of surety bond information validated by authorized surety companies and/or surety bond producers. After February 1, 2019, new company license applications will be required to meet all surety bond requirements by completing the electronic process. Current licensees must convert all existing surety bonds to NMLS via the submission of an ESB by the date listed on the Conversion Plan found on the State Licensing Requirement page of the NMLS Resource Center. Please thoroughly review the Conversion Plan and take the necessary steps to convert existing surety bonds by the January 31, 2020 deadline. Failure to complete the conversion process may affect your company’s ability to renew your license for the next year. Refer to the renewal section of the Conversion Plan for more information.
Licensees must first grant authority to their surety bond company/producer in NMLS, and then contact the company/producer to prepare the ESB. See the ESB for Licensees page for resources and more information. As noted in the Conversion Plan, there is an ESB Quick Guide on the NMLS Resource Center for your reference.
If you have any questions about the ESB adoption plan, feel free to contact this agency at 402-471-2171or by email at dob.mortgage@nebraska.gov. When contacting this agency, please specify the type of license you are referring.
ADVISORY: PROMISSORY NOTES
January 24, 2019 (LINCOLN, NEB.) —The Nebraska Department of Banking and Finance (NDBF) announced today the release of a new Informed Investor Advisory to raise investor awareness of the risks associated with investments in promissory notes.
State securities regulators have identified promissory notes as a leading source of complaints to their agencies. In fact, the North American Securities Administrators Association (NASAA), of which NDBF is a member, reported 210 investigations involving promissory notes, which led to 149 formal enforcement actions by state securities regulators in 2017.
The advisory reminds investors to be cautious of short-term promissory notes. Investors should be cautious about promissory notes with durations of nine months or less, as these notes generally do not require federal or state securities registration. Such short-term notes have been the source of most (though not all) of the fraudulent activity involving promissory notes.
The full advisory is available here: ndbf.nebraska.gov/about/news-publications.
Before making any financial decisions, ask questions, do your homework and contact NDBF at 402-471-2171.
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
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2018
DDS Legislative Changes-LB194
NEBRASKA DELAYED DEPOSIT SERVICES LICENSING ACT
IMPORTANT NOTICE REGARDING LEGISLATIVE CHANGES
EFFECTIVE JANUARY 1, 2019
On April 19, 2018, Nebraska Governor Pete Ricketts approved Legislative Bill 194 ("L.B. 194") which was passed by the Nebraska Unicameral on April 18, 2018. L.B. 194 amended certain provisions of the Delayed Deposit Services Licensing Act, Neb. Rev. Stat. §§ 45-901 to 45-931 ("Act"), which will become effective on January 1, 2019. The revised Act can be found at https://nebraskalegislature.gov.
The Nebraska Department of Banking and Finance ("NDBF") will update current Interpretative Opinions and Frequently Asked Questions providing guidance on the Act on this website on or immediately after the effective date of such changes. Guidance regarding the Act in its current form continues to be available on the NDBF website at https://ndbf.nebraska.gov.
Questions regarding the Act may be directed to the NDBF at
NDBF RELEASES CYBERSECURITY REPORT, BEST PRACTICES TO NEBRASKA ADVISERS
Dec. 3, 2018 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (“NDBF”) released today the results of its 2018 Cybersecurity Survey of Nebraska-Registered Investment Advisers. The report details results of a voluntary survey issued to all Nebraska advisers used to assess cybersecurity practices and risk management. The 2018 survey is follow up to the 2016 Cybersecurity Survey to determine whether Nebraska advisers had improved their cybersecurity practices.
“The Department wishes to thank all of the Nebraska advisers that participated in the survey,” Deputy Director Claire McHenry said.
In general, NDBF found that Nebraska advisers were taking steps to address cybersecurity threats, but that firms also could improve their practices. The survey focused on several cybersecurity issues, including devices, Wi-Fi access, passwords and encryption, and anti-virus/anti-malware protections. The report also identifies best practices and resources to assist firms to address cybersecurity issues.
“Cybersecurity remains a key priority for the Department,” said Deputy Director McHenry. “It is essential that investment advisers address cybersecurity threats to protect their clients and their firms, regardless of the size of the firm.”
2018 Cybersecurity Survey Report.pdf
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NEBRASKA MAN CONVICTED OF SECURITIES FRAUD
November 30, 2018 (Lincoln, Nebraska) – Bruce A. Billesbach (“Billesbach”) of Blair Nebraska has been convicted of securities fraud in two Nebraska counties. Billesbach sold investment interests to Nebraska residents to fund an options and futures trading program operated by him. Billesbach fraudulently failed to provide material information to the investors in his offer and sale of securities to them. Billesbach was sentenced to a total of ten years of probation in Douglas County and five years of probation in Washington County. In addition, Billesbach was ordered to pay restitution totaling $70,000.
The Nebraska Department of Banking and Finance investigated the transactions and initiated criminal referrals to prosecutors in Douglas and Washington counties.
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.
Nebraska man convicted of Securities Fraud.pdf
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MT Call Report Submission
NEBRASKA MONEY TRANSMITTER LICENSEES
IMPORTANT NOTICE REGARDING CALL REPORTS
The Nebraska Department of Banking and Finance ("NDBF"), by Order of the Director effective November 9, 2018, has adopted "mandatory" Money Services Businesses ("MSB") Call Reports under the Nationwide Multistate Licensing System ("NMLS"). A copy of the Order is attached to this Notice.
Such reporting will commence with the Q4 2018 reporting period, and the initial report is due 45 days after such fourth quarter end (February 14, 2019). Previously, filing MSB Call Reports electronically through NMLS was optional in Nebraska. A "Location" report, which will be available on the NDBF website, will continue to be required to be submitted directly to the NDBF at renewal. A request for an exemption from mandatory reporting through the NMLS may be submitted to the Director.
MSB Call Reports were developed with the goal of enhancing and standardizing the information available to state regulators concerning the activities of MSB licensees, including money transmitters. Electronic submission of MSB Call Reports through the NMLS enables licensees to efficiently, effectively, and securely comply with the reporting requirements of multiple states. Licensees will be able to submit quarterly and annual information directly in NMLS. Twenty-four state agencies currently have adopted mandatory NMLS MSB Call Reports in NMLS. Training and additional materials are available in the NMLS Resource Center
Questions regarding this Notice or the attached Order should be directed to NDBF at
SECURITIES LICENSE RENEWAL DEADLINE
NDBF REMINDS INVESTMENT ADVISERS, BROKER-DEALERS OF DECEMBER 31, 2018 RENEWAL DEADLINE
November 2, 2018 (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, 2018. 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, 2019.
State-registered investment adviser and investment adviser representative deadlines:
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By December 21, 2018 – Submit Nebraska specific forms and documentation to NDBF
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Before December 27, 2018 – Submit renewal payments through CRD/IARD
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Before December 27, 2018 – Submit required electronic form filings through CRD/IARD
FINRA broker-dealer and agent deadlines:
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Before December 27, 2018 – Submit renewal payments through CRD/IARD
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Before December 27, 2018 – 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 21, 2018.
CONSUMER ADVISORY
NDBF ISSUES ADVISORY ON MARIJUANA-RELATED INVESTMENTS
October 22, 2018 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (NDBF) is cautioning investors about schemes and risks associated with marijuana-related investments.
Investments in marijuana business ventures are becoming more prevalent and are receiving increased media coverage. Fraudsters may attempt to use this attention to convince investors to hand over money for risky or outright fraudulent marijuana ventures.
The advisory provides information about common marijuana-related investment schemes and the unique risks associated with marijuana-related investments, including reverse merger and pump-and-dump schemes, and jurisdictional legality.
The full advisory is available on the agency’s website here.
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.
Consumer Advisory - Marijuana.pdf
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CONSUMER ADVISORY
WATCH FOR SCAMS IN FLORENCE’S WAKE
September 18, 2018 (LINCOLN, NEB.) — In the wake of widespread damage caused by Hurricane Florence, the Nebraska Department of Banking and Finance (NDBF) cautioned investors to watch out for opportunistic investment or charitable scams.
“Natural disasters bring out the best and worst in people. While news stemming from Hurricane Florence has rightfully focused on the tireless efforts of first responders and neighbors helping neighbors, we know from experience that financial predators are lurking like snakes in the water to seek profit from the misfortune of others,” said Deputy Director Claire McHenry “Unsolicited investment offers seeking to capitalize on the aftermath of Hurricane Florence should be approached with extreme caution.”
McHenry reminded 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. She said scam artists may linger long after the storm has passed to prey on victims who anticipate receiving large lump-sum insurance settlements for damaged property and other losses.
The agency also cautioned about fraudulent charitable solicitations that prey on the goodness of people seeking to help those in need.
“There will be fraudulent solicitations for charities in Florence’s wake,” McHenry said. “Donors are reminded to do their research. As with any charitable contribution, those who want to contribute to relief efforts should send contributions to charitable organizations that are registered properly with state authorities and with an established track record of getting donations to victims.”
NDBF offered three quick tips to help investors avoid disaster-related scams:
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Delete unsolicited emails or social media messages and hang up on aggressive cold callers promoting hurricane-related investments, especially those from small companies touting unproven or new technologies or products.
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Use common sense. Claims of guaranteed returns or low/no investment risk are classic red flags. Every investment involves some degree of risk.
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Do your homework. Contact your state or provincial securities regulator to check that both the seller and investment are licensed and registered. If not, they may be operating illegally. Contact information is available on NASAA’s website.
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
Consumer Advisory - Hurricane Florence.pdf
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CONSUMER ADVISORY
PROTECT YOURSELF FROM INVESTMENT FRAUD
Sept. 11, 2018 (LINCOLN, NEB.) — If you are looking at an investment opportunity, the Nebraska Department of Banking and Finance (NDBF) urges you consider this first: Americans lose billions of dollars to fraud each year. A little extra effort can help you protect your money. While the details of investment scams constantly change, common warning signs, or red flags, are often present. Watch out for:
- Guaranteed high returns – a guarantee is only as good as the person offering it, and their credit rating.
- Low risk and high returns – if it is a high return investment, you are putting your money at risk.
- Offshore investment opportunities – if you send your money offshore, you lose the protection offered by state securities laws.
- Tax loopholes – you will still have to pay taxes, even after you lose your money.
If you are offered an investment opportunity, consider these questions:
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Are you dealing with a licensed financial adviser or broker? Anyone selling securities or offering investment must be registered with NDBF or operating under an exemption. Call NDBF or go to brokercheck.finra.org to check their registration and background.
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Do you understand how the investment works? Scam artists rely on your lack of knowledge to make money. Seek independent advice and verify what you have been told. Get terms of the deal in writing and keep copies.
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Have you had enough time to make a decision? Take your time. Do not give in to high-pressure sales tactics.
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Do you understand how the salesperson makes money? Ask questions about what commissions the sales person will receive and whether they have any of their own money invested in the venture.
If you have answered no to any of these questions, investigate further.
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
Consumer Advisory - Protect yourself from investment fraud.pdf
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CONSUMER ADVISORY
STATE RESIDENTS URGED TO BE ON GUARD AGAINST AFFINITY FRAUD
STATE REGULATOR WARNS INVESTORS NOT TO LET GUARD DOWN
August 16, 2018 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (NDBF) issued a warning today for Nebraska residents to be on the lookout for affinity fraud. Affinity fraud occurs when an investment promoter plays upon the fact that they share something in common with a potential investor – such as attending the same place of worship, being a member of the same race or ethnic group, or working in the same profession. Investors are more likely to trust this type of salesperson. But after lowering their guard and giving their money to a promoter, they can end up losing their entire investment.
NDBF urges investors to not be taken in by testimonials from other group members who express enthusiasm for an investment’s success. “Many investors fall prey to promoters who may seem to share your values and life experiences,” said Deputy Director Claire McHenry. “But no matter who is promoting an investment opportunity, you should protect yourself by maintaining your skepticism and investigating before investing your money.”
“While early investors may receive returns on their investments, scam artists frequently use money from later investors to pay high returns to early investors. Those who invest at the later stages of the scam often lose all the money they thought they were investing,” McHenry said.
McHenry encourages investors to be leery about promises of “guaranteed” investments since all investments involve risk. In addition, she said investors should be very skeptical when high rates of return are promised, especially when few investments are earning high returns.
“Affinity fraud are some of the saddest cases that we see,” said McHenry, “because people not only lose their money but they’ve been betrayed by someone they trusted.”
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.
20180816 - Consumer Advisory - Affinity Fraud
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NOTICE OF RULEMAKING HEARING
NEBRASKA DEPARTMENT OF BANKING AND FINANCE
Notice is hereby given that the Nebraska Department of Banking and Finance will hold a rulemaking hearing on July 25, 2018, 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:
1) The proposed repeal of Title 45, Chapters 1-5, 10, 13-14, 22, and 29.
2) The proposed repeal of Title 46, Chapters 1-6, 9 and 12.
3) The proposed repeal of Title 47, Chapters 1-11.
4) The proposed revisions to Title 48, Chapters 6, 13, 16, 38, and 39.
5) The proposed repeal of Title 48, Chapter 35.
45 NAC—Banking Rules: Chapters 1-5, 10, 13-14, 22, and 29, are proposed for repeal as such rules are obsolete.
46 NAC—Industrial, Savings & Loan, Credit Union Rules: Chapters 1-6, 9, and 12 are proposed for repeal as such rules are obsolete.
47 NAC—Electronic Transmission Terminal Rules: Chapters 1-11 are proposed for repeal as such rules are obsolete.
48 NAC—Securities Rules: The following amendments are proposed for Title 48:
48 NAC 6—Agents of Broker-Dealers: The purpose of the proposed revision of 48 NAC 6 is to update provisions governing broker-dealer agents. The proposal adjusts examination requirements for agents to correspond to new examination requirements established by the Financial Industry Regulatory Authority.
48 NAC 13—Information Requirements for the Section 8-1110(5) Exchange Exemption: The purpose of the proposed revision of 48 NAC 13 is to eliminate an obsolete notice filing requirement and to designate approved exchanges for the exchange exemption.
48 NAC 16—Information Requirements for the Section 8-1111(15) Agricultural Cooperative Exemption: The purpose of the proposed revision of 48 NAC 16 is to clarify that the filing requirements apply to all cooperatives and limited cooperative associations.
48 NAC 35—Repealed. This chapter is proposed for a complete repeal as such rule is obsolete.
48 NAC 38—Information Requirements for the Section 8-1111(23) Notice: The purpose of the proposed revision of 48 NAC 38 is to increase the amount that can be raised from $250,000 to $750,000, and to authorize issuers to rely upon the federal "Intrastate Offering Exemption", 17 CFR 230.147A.
48 NAC 39—Conditions and Information Requirements for the Section 8-1111(24) Crowdfunding Exemption: The purpose of the proposed revision of 48 NAC 39 is to eliminate certain restrictions on advertising. Issuers will be allowed to advertise across state lines as long as the advertising states that the offering is limited to Nebraska residents.
The rulemaking hearing is being conducted under and by virtue of the provisions of Section 84-907, R.R.S 1943, as amended, which provides that COPIES OF THE PROPOSED RULES ARE AVAILABLE FOR PUBLIC EXAMINATION at the Office of the Department of Banking and Finance, 1526 K Street, Suite 300, Lincoln, Nebraska 68508, and at the Office of the Secretary of State, 1201 N Street, Suite 120, Lincoln, Nebraska 68508. In addition, the proposed rules are available on the Department of Banking and Finance’s website at https://ndbf.nebraska.gov, and the Secretary of State’s website www.sos.ne.gov.
A copy of the Fiscal Impact Statement is available at the Office of the Department of Banking and Finance and on the Department’s website.
All interested persons are invited to attend and testify at the hearing. Interested persons may also submit written comments to the Department of Banking and Finance prior to the hearing, which comments will be made part of the hearing record at the time of the hearing.
If auxiliary aids or reasonable accommodations are needed for attendance at this hearing, please call the Nebraska Department of Banking and Finance at (402) 471-2171, or, for persons with hearing impairments, please call the Nebraska Relay System, (800) 833-7352 TDD. This contact should be made at least seven (7) days prior to the hearing.
Dated at Lincoln, Nebraska, this 19th day of June, 2018.
Mark Quandahl, Director
Nebraska Department of Banking and Finance
The drafts can also be found HERE(https://ndbf.nebraska.gov/about/legal/ndbf-2018-rules-updates-hearing-20180725) on the Department's Website.
WORLD ELDER ABUSE AWARENESS DAY
NDBF RECOGNIZES WORLD ELDER ABUSE AWARENESS DAY
WARNS OF THE DANGER SIGNS FOR SUSPECTED ABUSE BY GUARDIANS
June 15, 2018 (LINCOLN, NEB.) — In recognition of World Elder Abuse Awareness Day (WEAAD) today, the Nebraska Department of Banking and Finance (NDBF) reminds financial professionals and the public throughout Nebraska to be on the lookout for the red flags of suspected financial abuse, including potential abuse by guardians assigned to oversee the financial matters of seniors no longer able to do so for themselves.
"A trusted guardian can be a wonderful resource. But sometimes guardians may take advantage of the trust placed in them to look after the people or assets in their care," NDBF Deputy Director Claire McHenry said.
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 assets.
"Fraudsters often target seniors for financial exploitation because they may be isolated from family, caregivers, and other support networks. That’s why it is important to know the red flags that could signal a senior’s savings may be in danger," Deputy Director McHenry said.
The North American Securities Administrators Association (NASAA), of which NDBF is a member, recently developed a resource to help call attention to the red flags of suspected guardian financial abuse. The "Guarding the Guardians" publication also provides examples of exploitation and information on how to report suspected abuse.
Suspected signs of guardian financial abuse include:
Using guardianship authority to transfer property for the guardian’s benefit.
Receiving personal payments from a protected individual without court permission.
Authorizing frequent cash withdrawals from the protected individual’s accounts without explanation.
Using or borrowing property for personal benefit without court authorization.
Making unexplained decisions that are not in the protected individual’s best interest.
Deputy Director McHenry asks anyone with suspicions of possible exploitation by guardians to contact the agency at 402-471-2171.
More information about the laws governing the securities industry in Nebraska can be found on NDBF’s website at 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.
CONSUMER ADVISORY
NDBF ISSUES ADVISORY ON CRYPTOCURRENCIES AND ICOS
June 8, 2018 (LINCOLN, NEB.) The Nebraska Department of Banking and Finance (NDBF) reminds investors to be cautious when investing in cryptocurrencies and initial coin offerings (ICOs). Recent enforcement actions by federal and other state regulators against ICOs and cryptocurrency-related investment products show that fraudulent activity involving these products poses a significant threat to Main Street investors.
"Fraudulent activity harms investors and legitimate businesses interested in taking advantage of the new technology. We urge investors to approach initial coin offerings or cryptocurrency-related investment product with extreme caution," NDBF Deputy Director Claire McHenry said.
To help investors understand the risks associated with investing in ICOs and cryptocurrency-related investment products, NDBF issued two new Informed Investor Advisories, "What to Know About ICOs" and "Be Cautious of the Crypto Investment Craze."
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.
Consumer Advisory - Cryptocurencies and ICOsInformed Investor Advisory CryptocurrencyInformed Investor Advisory ICO
Cease and Desist Order Issued
NDBF WARNS ABOUT FAKE FINANCIAL REGULATOR
JUNE 8, 2018 (LINCOLN, NEB.) - The Nebraska Department of Banking and Finance is warning Nebraska residents about an entity claiming to be a financial regulator. The Federal Securities Trading Regulatory Board (“FSTRB”), with a website at www.fstrb.org claims to be operating from 201 North 8th Street, Unit 210, Lincoln, Nebraska. According to its website, the FSTRB is responsible to “oversee, administer, and enforce the federal securities laws related to Corporate Mergers & Acquisitions.” The FSTRB also claims to license entities and individuals engaged in the financial industry, including broker-dealers, investment advisers, “deposit taking” institutions, and money transmitters.
The Department was contacted by a resident of Finland who reported that a group of investors were attempting to purchase the stock of a company located in Pennsylvania. During the transaction, the FSTRB became involved in the facilitation of the sale of the stock. As instructed by a FSTRB employee, the investors wired money to an account in the Philippines.
The Department has confirmed that there is no entity calling itself the FSTRB located at the address listed on its website. Furthermore, the FSTRB is not a legitimate financial regulator. It appears that this entity and website were created to give credibility to securities transactions and to induce investors to wire funds to “purchase” the securities.
On June 8, 2018, the Department issued a Cease and Desist Order against FSTRB ordering it to cease acting as a broker-dealer and to cease making false and misleading representations to investors, including representing that they are a regulatory agency.
To help investors determine if they are dealing with a bogus regulator, the North American Securities Administrators Association, an organization consisting of state and provincial securities regulators, including the Department, identified the following warning signs:
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You cannot find references to them on any other regulatory websites. If you cannot find information about the “regulator” on the site of the International Organization of Securities Commissions, www.iosco.org, they probably are not a legitimate regulator.
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They endorse or approve any investment opportunity, stock, or company. Legitimate regulators are not in the business of promoting any deal, only enforcing securities laws and ensuring fair dealing.
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They say that paying a fee to “release restricted shares” is anything other than an attempt to steal your savings. This is a common ploy, and a recent twist on age-old advance fee schemes.
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Little or no information about the “regulator” appears in Internet search engines. Any legitimate regulator should generate hundreds of entries in any Internet search engine.
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If you talk to other regulators, and they say they have “never heard of them,” you are most likely dealing with a fake regulator.
The Department strongly cautions consumers on conducting business over the Internet with financial companies with whom they are unfamiliar. In many cases, the customer is told to wire money or send a money order, often to a location outside the United States. Consumers never receive the promised services and cannot recover their money. Furthermore, these consumers may be asked to provide personal information such as social security numbers and bank account numbers to the Internet company, which makes them prime targets for identity theft.
Individuals who conducted business with the FSTRB are asked to contact the Department.
A copy of the Cease and Desist Order is also available on the Department’s website at www.ndbf.nebraska.gov.
More information about the laws governing the financial industries in Nebraska can be found on the Department’s website. 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.
Consumer Advisory
NDBF ISSUES ADVISORY ON FINANCIAL UNICORNS
April 24, 2018 (LINCOLN, NEB.) — The Nebraska Department of Banking and Finance (NDBF) is cautioning investors about pre-IPO investments in large privately held companies with supposed valuations of more than $1 billion, commonly referred to as "unicorns." Investing in unicorns is speculative and generally unavailable to retail investors.
NDBF is sharing an Informed Investor Advisory about financial unicorns. The advisory provides information and resources to help investors better understand "unicorn" companies. The advisory discusses the risks of investing in pre-IPO companies, including fraud, as well as disclosure, liquidity and valuation considerations.
The full advisory is available on the agency’s website here.
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.
Federal Regulatory Alert
The Federal Trade Commission issued a WESTERN UNION refund alert on March 22, 2018. FRAUDSTERS are reportedly using official looking emails to collect information about your Western Union settlement. FTC warns everyone, do not apply for a Western Union settlement refund on line, you must use the forms made available by the FTC.
If you lost money to scammers who had you pay using Western Union between January 1, 2004 and January 19, 2017, you can ask for your money back.
To learn more, follow the link to the Federal Trade Commission.
https://www.consumer.ftc.gov/blog/2018/03/western-union-refunds-scam-alert?utm_source=govdelivery
Consumer Advisory
Conversation Starters For Military Families
MARCH 1, 2018 (LINCOLN, NEB.) — This week is Military Saves Week, which encourages members of the military and their families to save money and build wealth. The Nebraska Department of Banking and Finance (“NDBF”) proudly supports our service members and understands that they have unique challenges.
Military life changes quickly with deployments, relocations, promotions or changes in dependents. NDBF is issuing conversation starters to help military families prepare themselves to make safe and wise financial decisions.
Budgeting
- How much income goes toward fixed expenses (e.g. rent, insurance) versus flexible expenses (e.g. entertainment and investments)?
- Have you created a financial plan to show where your money goes?
- Have you taken advantage of military resources to help develop personal finance skills?
- Are your family members aware of all financial accounts, bill deadlines, investments, etc. in case of deployment or an emergency?
Saving
- What are your short and long-term financial goals (e.g. buy a home, start a family)?
- Do you have an emergency fund for unexpected financial hardships?
- How could you spend less and save more?
- Are you aware of the special savings accounts and financial programs available to military personnel on deployment?
Investing
- What are the risks and benefits of investing compared to saving?
- What investments are appropriate now (e.g. securities, real estate, education)?
- How do you balance immediate financial needs with long-term financial goals?
- Do you understand basic investing strategies (e.g. diversification and dollar cost averaging)?
- Who can help you make informed financial or investment decisions?
- Are you taking advantage of all government-offered investment and retirement plans?
Scams and Frauds
- How do you identify and report suspected fraud?
- Where can you verify the background of financial professionals or firms?
- How can you effectively monitor your investments?
- How can you stay aware of current investment scams and fraud?
Additional information about Military Saves Week and a list of resources and events is available at www.militarysaves.org.
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.
CONSUMER ALERT
NDBF Announces New Resources and Tools for Choosing a Financial Professional
February 14, 2018 (Lincoln, Neb.) — The Nebraska Department of Banking and Finance (“NDBF”) announced today a new resource, The Informed Investor Advisory: Financial Service Providers. The advisory will help Nebraskans understand the different types of financial services providers, how to check out their background, and important questions to ask before signing a contract.
Nebraskans are also encouraged to check out a new online guide available at www.aarp.org/InterviewAnAdvisor that helps identify questions to ask before hiring a financial adviser. Interview an Adviser is a free tool launched recently by AARP and the North American Securities Administrators Association (NASAA), of which the Department is a member. The online tool does not require an AARP membership to use.
“Many people would benefit from working with a financial professional. It’s best to take the time and do your homework to understand the services they offer, their responsibilities to you, and what you will be paying. However, many people don’t know where to start or what questions to ask,” says NDBF Deputy Director Claire McHenry.
The selection of any professional can be done best by following a step-by-step search process. Check his or her credentials, experience, reputation and qualifications by using BrokerCheck.FINRA.org or contacting NDBF. Identify your primary needs in seeking financial advice in order to evaluate each financial adviser you meet based on his or her ability to help fulfill those needs. Ask a lot of questions to make sure the adviser is a good fit for you based on your financial situation and needs. It is your responsibility and right to fully investigate the financial adviser's background, methods of practice, and credentials.
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.
Informed Investor Advisory Financial Service ProvidersChoosing Advisers and Planners Consumer Alert
CONSUMER ALERT
NDBF Reminds Investors to Approach Cryptocurrency with Caution
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.
Cryptocurrency Concerns
Some concerns investors should consider before investing in any offering containing cryptocurrency include:
- Cryptocurrency is subject to minimal regulatory oversight, susceptible to cybersecurity breaches or hacks, and there may be no recourse should the cryptocurrency disappear.
- Cryptocurrency accounts are not insured by the Federal Deposit Insurance Corporation (FDIC), which insures bank deposits up to $250,000.
- The high volatility of cryptocurrency investments makes them unsuitable for most investors, especially those investing for long-term goals or retirement.
- Investors in cryptocurrency are highly reliant upon unregulated companies, including some that may lack appropriate internal controls and may be more susceptible to fraud and theft than regulated financial institutions.
- Investors will have to rely upon the strength of their own computer security systems, as well as security systems provided by third parties, to protect purchased cryptocurrencies from theft.
Common Red Flags of Fraud
NDBF also reminds investors to keep watch for these common red flags of investment fraud:
- “Guaranteed” high investment returns. There is no such thing as guaranteed investment returns, and there is no guarantee that the cryptocurrency will increase in value. Be wary of anyone who promises a high rate of return with little or no risk.
- Unsolicited offers. An unsolicited sales pitch may be part of a fraudulent investment scheme. Cryptocurrency investment opportunities are promoted aggressively through social media. Be very wary of an unsolicited communication—meaning you didn’t ask for it and don’t know the sender—about an investment opportunity.
- Sounds too good to be true. If the project sounds too good to be true, it probably is. Watch out for exaggerated claims about the project’s future success.
- Pressure to buy immediately. Take time to research an investment opportunity before handing over your money. Watch out for pressure to act fast or “get in on the ground floor” of a new tech trend.
- Unlicensed sellers. Many fraudulent investment schemes involve unlicensed individuals or unregistered firms. NDBF can help investors research the background of those selling or advising the purchase of an investment.
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.
2017
Consumer Alert
NDBF Announces Top Investor Threats
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:
- PROMISSORY NOTES: A promissory note is a written promise to pay (or repay) a specified sum of money at a stated time in the future or upon demand. Companies may sell promissory notes to raise capital, and usually offer them only to sophisticated or institutional investors. But not all promissory notes are sold in this way. Promissory notes from legitimate issuers can provide reasonable investment returns at an acceptable level of risk, although state securities regulators have identified an unfortunately high number of promissory note frauds. Investors should be cautious about promissory notes with durations of nine months or less, as these notes generally do not require federal or state securities registration. Such short-term notes have been the source of most (though not all) of the fraudulent activity involving promissory notes identified by securities regulators.
- REAL ESTATE INVESTMENTS: The promise of earning quick money through investments related to real estate continues to lure investors. Investors should be cautious about real estate investment seminars, especially those marketed aggressively as an alternative to more traditional retirement planning strategies involving stocks, bonds and mutual funds. Two of the most popular current investment pitches at these seminars involve so-called “hard-money lending” and “property flipping.” Hard-money lending is a term used to refer to real estate investments financed through means other than traditional bank borrowing. Investors may be tempted by the opportunity to earn greater rates of return by participating on a hard-money loan and may (or may not) appreciate the potential risks. Property flipping is the practice of purchasing distressed real estate, refurbishing it, and then immediately re-selling it in hopes of earning a profit. Property flipping financed through borrowed funds or outside investments can be done entirely lawfully, but it can also be a source for fraud. A scammer may, for example, defraud potential investors in the flip by misrepresenting the value of the underlying property or its profit potential.
- PONZI/PYRAMID SCHEMES: A Ponzi scheme (named after 1920’s swindler Charles Ponzi) is a ploy wherein earlier investors are repaid through the funds deposited by subsequent investors. In a Ponzi scheme, the underlying investment claims are usually entirely fictional; very few, if any, actual physical assets or investments generally exist. As the number of total investors grows and the supply of potential new investors dwindles, there is not enough money to pay off promised returns and cover investors who try to cash out. Similarly, a pyramid scheme is a fraudulent multi-level marketing strategy whereby investors earn potential returns by recruiting more and more other investors. Multi-level marketing strategies are not intrinsically fraudulent, and there are many legitimate multi-level marketing companies offering various consumer products and services. What makes a multi-level marketing strategy into a fraudulent pyramid scheme is the lack of a genuine underlying investment enterprise or product upon which the strategy can hope to be sustained.
- OIL & GAS INVESTMENTS: Many oil and gas investment opportunities, while involving varying degrees of risks to the investor, are legitimate in their marketing and responsible in their operations. However, as in many other investment opportunities, it is not unusual for unscrupulous promoters to attempt to take advantage of investors by engaging in fraudulent practices. These investments may be marketed as safe and secure, high-yield investments and therefore attract investors, such as seniors, who are interested in safety of principal with some income-producing potential. Oil and gas ventures are typically highly speculative, though, and may not be suitable for many investors. Because these ventures are so speculative, the potential for fraud is rife. Scammers may misrepresent the likelihood that an oil or gas well will be successful – or may not even ultimately drill a well at all. Fraudulent oil and gas schemes frequently take the form of Ponzi schemes, with investors’ funds being “recycled” to keep the scheme going.
- AFFINITY FRAUD: In an affinity fraud, a con artist uses some sort of connection with the victim as the basis for the fraud. Affinity frauds may involve people who attend the same church, belong to the same club or association, or share a common hobby. The con artist knows it is often easier for victims to trust someone who seems to be like them. And once trust is gained, it is easier to exploit that trust to perpetrate a scam. Once a victim realizes that he or she has been scammed, too often the response is not to notify the authorities but instead to try (usually unsuccessfully) to solve problems within the group. Affinity fraud can not only be financially devastating to the victims, but often has the perverse effect of causing victims to lose trust in the group or affiliation that was previously a source of comfort or support. The psychological damage can be just as harmful as the financial damage.
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.
Investment Adviser Resources
NDBF IDENTIFIES COMPLIANCE, CYBERSECURITY RESOURCES FOR INVESTMENT ADVISERS
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.
Consumer Alert
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.
Federal Regulatory Alert
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.
12/31/2017 RENEWAL DEADLINE
NDBF REMINDS INVESTMENT ADVISERS, BROKER-DEALERS OF DECEMBER 31, 2017 RENEWAL DEADLINE
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:
- By December 22, 2017 – Submit Nebraska specific forms and documentation to NDBF
(see requirements) - Before December 26, 2017 – Submit renewal payments through CRD/IARD
- Before December 27, 2017 – Submit required electronic form filings through CRD/IARD
FINRA broker-dealer and agent deadlines:
- Before December 26, 2017 – Submit renewal payments through CRD/IARD
- Before December 27, 2017 – Submit required electronic form filings through CRD/IARD
Non-FINRA Broker-Dealers and agents must submit all required forms and documentation to NDBF
( see requirements) by December 22, 2017.
Consent Order
Nebraska Department of Banking and Finance entered into a Consent Order with Ocwen Loan Servicing, LLC and Ocwen Mortgage Servicing, Inc.
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.
Ocwen - Consent Order, Exhibit A and Exhibit BOcwen - Loan Servicing Cease and Desist 4 20 2017 seal
CONSUMER ALERT
NDBF OFFERS NEW PUBLICATION ON RED FLAGS OF GUARDIAN FINANCIAL ABUSE
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.
CONSUMER ALERT
NDBF ISSUES BINARY OPTIONS ADVISORY
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
EMAIL: claire.mchenry@nebraska.gov
CONSUMER ALERT
Ohio Company Ordered to Stop Soliciting Investors
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
EMAIL: thomas.sindelar@nebraska.gov
Hurricane Harvey Consumer Alert
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:
- Delete unsolicited emails or social media messages and hang up on aggressive cold callers promoting hurricane-related investments, especially those from small companies touting unproven or new technologies or products.
- Use common sense. Claims of guaranteed returns or low/no investment risk are classic red flags. Every investment involves some degree of risk.
- Do your homework. Contact NDBF to check that both the seller and investment are licensed and registered. If not, they may be operating illegally.
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
EMAIL: claire.mchenry@nebraska.gov
Financial Institution Officers
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.
Investment Adviser Seminar
NDBF to Hold August 17th Investment Adviser Compliance Seminar
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.
Securities Rules Update Announced
Securities Act of Nebraska Rules Effective
Comprehensive Securities Rules Update Announced
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
amended.
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:
- Implements filing requirements for Regulation A, Tier 2 Offerings,
- Increases the maximum amount that can be raised pursuant to the Intrastate Offering Exemption, Section 8-1111(20) of the Securities Act of Nebraska, from $750,000.00 to $1,000,000.00,
- Amends the information required to be submitted to the Department to request an Order Curing Late Notice for certain notice filings,
- Adopts the most recent North American Securities Administrators Association (“NASAA”) Statements of Policy concerning the registration of securities in Nebraska,
- Adopts the recent amendments to NASAA’s Brochure Rule for state -registered investment advisers,
- Adopts NASAA’s model custody rule for state -registered investment advisers, which includes a definition of the term “custody”,
- Adopts rules concerning succession planning for state-registered investment advisers, and
- Repeals a rule concerning debt securities issued by a church or congregation
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
few weeks.
World Elder Abuse Awareness Day
NDBF Recognizes World Elder Abuse Awareness Day
Encourages Financial Firms to Watch for Signs of Elder Financial Fraud and Exploitation
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:
- Has the elder moved away from existing relationships and toward new associations with other "friends" or strangers who show excessive interest in his or her finances or accounts, refuse to allow the elder to speak or are reluctant to leave the senior's side during conversations?
- Does the elder show an unusual degree of fear, anxiety, submissiveness or deference toward the person accompanying him or her?
- Does the elder display unexplained or unusual excitement over an investment opportunity, financial windfall or prize check?
"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.
World Elder Abuse Awareness Day
Girls State
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.
Consumer Alert
Nebraska Man Convicted of Securities Fraud
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.
Consumer Alert
Papillion Company Ordered to Stop Soliciting Investors
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.
Blazefly Inc C&DBlazefly Inc Order Affirming C&DConsumer Alert Blazefly Inc May 2017
Cease and Desist Order Issued
Cease and Desist Order Issued to Mortgage Servicers
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.
NDBF Press Release – Ocwen Financial Corp. 4-20-2017
Banking Act Update Signed
Comprehensive Banking Act Update Signed Into Law
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
Consumer Alert
Omaha Company Ordered to Stop Soliciting Investors
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.
BSA/AML Self-Assessment Tool
State Regulators Release BSA/AML Self-Assessment Tool
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.
New Look & New Web Address
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.info@nebraska.gov .
2016
Designated Securities Manuals
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
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 Hearing
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.
Hearing Notice
Fiscal Impact Statement
Current Title 48 Securities Rules
Switches
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.
Securities Act of Nebraska Form U-1: New Filing Requirement
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.
NDBF Takes Emergency Action Against Omaha Investment Adviser
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.
Read the Emergency OrderRead the Court ComplaintRead the Court OrderRead the Order Setting HearingRead the Order Appointing Receiver
DASH for the STASH Winner
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).
Dash for the Stash - Investor Education and Protection Program
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.
2015
Switches
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.
Consumers Beware of Scam Involving Old & Non-Existing Debts
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.
Investor Protection Institute to Offer $100 Prize in "Dash for the Stash"
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.
Read more, including Contest Rules, Participating Libraries, and the Focus of the Contest
Notice of Rulemaking Hearing
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:
- The proposed revision of Title 48, Chapter 1.
- The proposed adoption of new Title 48, Chapter 38.
- The proposed adoption of new Title 48, Chapter 39.
- The proposed adoption of new Title 48, Chapter 40.
- The proposed adoption of new Title 48, Chapter 41.
- The proposed adoption of new Title 48, Chapter 42.
2013
Nebraska Department of Banking and Finance Warns About Online Escrow Company
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.
2012
Statement of Policy #33
Virginia-Based Company Ordered to Stop Soliciting Nebraska Investors
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.
2011
Nebraska News
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.
IA “Switch” Workshop Announcement
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
Masquerading Web site: Helpwithmybank.com
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:
Email: occalertresponses@occ.treas.gov
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
Nebraska Department of Banking and Finance Closes Mid City Bank, Inc., Omaha
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.
Nebraska Regulator Named Head of International Securities Organization
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.
Depository Institution Mortgage Loan Originators Must Register
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.
Chapters 1 and 15 of Title 48 of the Nebraska Administrative Code have been amended
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.
Department of Banking Issues Warning about Oil and Gas Scams
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.
UPDATED DELAYED DEPOSIT SERVICES INFORMATION
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.
Click here for the DDS Interpretative Opinions.Click here for the DDS FAQs.
FDIC Announces Hotline for Small Businesses Regarding Availability of Credit
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.
2010
Notice of Rulemaking Hearing Nebraska Department of Banking and Finance
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 proposed revision of Title 48, Chapter 1.
- The proposed revision of Title 48, Chapter 15.
Omaha-Based Company Ordered to Stop Soliciting Investors
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.
Nebraska Regulator Named Future Head of International Securities Organization
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.
Nebraska Department of Banking and Finance Warns Borrowers about an Online Loan Company
Nebraska Department of Banking and Finance Warns Consumers About Two Online Loan Companies
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.
NDBF Announces Successful Implementation of Mortgage Loan Originator Licensing Requirements
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.
DBF Joins 35 State Settlement With CitiFinancial
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.
NMLS Consumer Access (01-25-2010)
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.
Norfolk-Based Company Ordered to Stop Soliciting Investors
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.
2009
Omaha-Based Companies Ordered to Stop Soliciting 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.
Internet Loan Scammer Impersonating Lincoln Business
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.
Department Issues Cease and Desist Order to Omaha-Based Investment Firm
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).
Read News ReleaseOrder to Cease and Desist Order to Show Cause
NDBF Warns Consumers of Loan Scam
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.
Department Warns of Mystery Shopping Scam
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.
Department Issues Warning of Two Internet Loan Scams
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.
Nebraska Banking Department Closes Sherman County Bank
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.
State Agencies Investigate Grand Island Insurance Agency
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.
NDBF Cease and Desist OrderU.S. District Court Bankruptcy filing
Nebraska Department of Insurance
2008
TEST NEWS RELEASE
Department Teams Up with AARP for Free Lunch Investment Seminar Monitor Program
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.
Official Warn Consumers About Internet Lending Fraud
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.
NDBF Reaccredited by CSBS
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.
Department Issues Another Warning on Internet Loan Scams
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.
Officials Issue Warning About Internet Lending Scams
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.
Munn to Join Federal Banking Council
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.
2007
Kearney-Based Company Ordered to Stop Soliciting Investors
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 Joins Nationwide Mortgage Licensing System(9/18/07)
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.
Bruning, Munn File Action Against Alleged Predatory Lender
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.
View the news releaseRead the Administrative OrderRead the Court Filed Complaint
Cease & Desist Order Issued to Nebraska Internet Payday Lender
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.
Consumer Advisory on Foreclosure Rescue Services
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.
Consumer Alert On Mortgage Payment Increases
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.
Lincoln Company Ordered to Cease Offering Securities Without Full Disclosure of the Background of the Company’s Principals
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.
Nebraska Department of Banking and Finance Adopts Regulatory Guidance on Nontraditional Mortgage Products
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.
