Important Notification! - NDBF Securities Citizenship Verification Process Update

Effective December 2018, a new portal will be available for Investment Advisers and Broker-Dealers to submit information for the citizenship verification process.  Information about the new portal can be found here.

Consumer Alerts

2018

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 mayattempt 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 https://ndbf.nebraska.gov/about/news-publications. 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. Inforned Investor Advisory Marijuana

Inforned Investor Advisory Marijuana


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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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:

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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.

FSTRB Cease and Desist Press Release

FSTRB Cease and Desist Order


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 ICOs
Informed Investor Advisory Cryptocurrency
Informed Investor Advisory ICO


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.

Consumer Advisory - Unicorns

Informed Investor Advisory - Unicorns

 


 

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 Advisory - Military Families Conversation Starters

 


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 Providers
Choosing Advisers and Planners Consumer Alert

 

2017

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. 

Guardian Brochure
Consumer Alert - Guardian Financial Abuse


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 Binary Options


Ohio Company Ordered to Stop Soliciting Investors

Publication Date: August 31, 2017

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 

A Voice 4 U C&D
A Voice 4 U Consumer Alert


Nebraska Man Convicted of Securities Fraud

Publication Date: May 22, 2017

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.

Scott Robert Prill Consumer Alert May 2017


Papillion Company Ordered to Stop Soliciting Investors

Publication Date: May 10, 2017

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&D
Blazefly Inc Order Affirming C&D
Consumer Alert Blazefly Inc May 2017


Omaha Company Ordered to Stop Soliciting Investors

Publication Date: March 20, 2017

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.

Parker Grant BMC Consumer Alert
Parker Grant BMC C&D