Additional Archives
Securities Division Newsletters
November 2013 Newsletter
In this issue, we report on the arrest of Rondell Scott Hedrick of Lexington, NC. Law Enforcement agents with the North Carolina Secretary of State Division of Securities charged Mr. Hedrick, 48, of Lexington on October 27, 2013, with 27 felony counts related to an alleged precious metals investment scheme. He was placed the Davidson County Jail under $150,000 secured bond. We also report on efforts to introduce the principles of financial literacy into the state’s public school classrooms and provide links to useful resources. We also report that we have posted two newly updated resources on our website that are designed to help investors better understand the responsibilities of—and differences between—the various investment professionals they may encounter. We report that state securities regulators around the country are calling on Congress to take a balanced approach to capital formation proposals to restore investor confidence. We also report the findings of a national survey conducted on behalf of the FINRA Foundation which reveals that over 80 percent of respondents have been solicited to participate in potentially fraudulent schemes, and over 40 percent of those surveyed cannot identify some classic red flags of fraud, costing Americans about $50 billion annually. We also include links to new guides for advocates of financial crimes victims, for commodity futures fraud whistleblowers, and for caregivers charged with managing money for their loved ones. We also report on a survey of state securities regulators showing little difference in the type or frequency of deficiencies between existing state investment advisers and those advisers who switched from federal to state oversight as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act. We also provide updates to our recurring sections, Calendar of Upcoming Events, On The Docket, and News from the Regulators.
June 2013 Newsletter
In this issue we report that Secretary Elaine F. Marshall participated in a Financial Fitness Fair for Seniors that was jointly sponsored by the NC Attorney General’s Office and the Consumer Financial Protection Bureau (CFPB). We also report that Raleigh real estate developer Carolyn W. Grant received a 78-month jail sentence for her role in a scheme to defraud investors. She was also ordered to repay the nearly $13.6 million she stole from investors. We provide an update on the claims process that has been devised by the court-appointed receiver in the case. We report on Stephen E. Maiden, a hedge fund manager from Charlotte, who pleaded guilty to having carried out an $8.9 million Ponzi scheme. We also provide an update on the successful regulatory transfer of more than 2,100 investment advisers from federal to state oversight, commonly known as the “IA Switch.” We also provide information about how to download a free digital copy of the book, Ponzimonium, written by Bart Chilton, Commissioner of the Commodity Futures Trading Commission (CFTC). Using real examples drawn from the CFTC’s case files, Commissioner Chilton describes how scheme artists are ripping off America. We also provide an update on the status of the Summer 2013 Investor Education in Your Workplace® program. With the headlines full of reports about new energy-related technologies, we print the latest alert in our “Informed Investor” series, entitled “Energy Investments.” This alert is available for download from our website. We include statements from the North American Securities Administrators Association (NASAA) on two matters of importance to investors: the need for having a uniform fiduciary standard for broker-dealers and investment advisers that is at least as strong as the existing standard for investment advisers; and the need for Congress to enact legislation prohibiting forced arbitration. We include investor alerts on pump-and-dump schemes, things investors need to know to protect their pension or settlement income streams, and on the proliferation of bogus regulatory websites. Finally, we include our usual features, Calendar of Upcoming Events, On The Docket, Recent Enforcement Actions and News from the Regulators.​
April / May 2013 Newsletter
In this issue, we report on the success of “Elder Abuse: A Multidisciplinary Approach to Justice,” the first multijurisdictional conference devoted to the topic of elder abuse. We include an update in the on-going “Operation Wax House” racketeering case that involves a total of 92 defendants, many of whom are North Carolina residents. We report on the arrest of James H. Mason of Graham, NC, on charges that he solicited $4.7 million from at least 500 victims in a foreign currency exchange Ponzi scheme. In a similar but separate case, we report that a federal judge has ordered Timothy Bailey of Monroe and Michael Hudspeth, formerly of Statesville, to pay over $1.8 million in restitution and fines in connection with an off-exchange foreign currency Ponzi scheme that solicited at least 22 people. This spate of foreign currency (forex) schemes has prompted the Securities Division to re-issue an investor alert warning investors about the potential dangers associated with forex trading. We also report that fifteen North Carolina-based employers have opted to enroll some or all of their employees in the third round of the Investor Education in Your Workplace® Program. Once again the NC Department of the Secretary of State is making this 10-part, online investor education program available free-of-charge to up to 1185 people across the state. In this issue, we also unveil the two newest advisories in our “Informed Investor” series. One advisory deals with changes that are anticipated with the way private placement offerings may be marketed. The other advisory helps explain the differing duties and responsibilities of various financial service providers. This segues into the findings of a study conducted by the Consumer Financial Protection Bureau (CFPB) confirming that senior citizens are confused by the array of titles used by financial service providers. We also announce an upcoming series of seminars on business essentials for small businesses. Finally, we include our regular features: Calendar of Upcoming Events; On The Docket; Recent Enforcement Actions; and News from the Regulators.
March 2013 Newsletter
In this issue, we report on the Temporary Cease and Desist Order the NC Secretary of State Securities Division issued to Roman Novak, Radoslav Novak and Inter Reef LTD d/b/a Profitable Sunrise to bar them from offering and selling or attempting to sell securities in North Carolina. We also report that Gary D. Martin of St. Augustine, FL, and formerly of North Carolina, was sentenced to ten years in prison and ordered to pay $31.7 million restitution for his role in the $32.5 million Queen Shoals Ponzi scheme. The Queen Shoals mastermind, Sidney S. Hanson, is currently serving a 22-year federal sentence for his involvement in the scheme. We also announce that the North American Securities Administrators Association (NASAA) is teaming up with AARP to conduct a webinar on Tuesday, April 23, 2013, at 2:00 PM, on ways to avoid financial fraud. Registration details can be found in the newsletter by clicking the link above. We also provide a look at how well North Carolina participants did in the "Investor Education in Your Workplace® Program". We are also pleased to announce that we will be sponsoring another round of the program beginning May 6. Registration details are included in the newsletter by clicking the link above. We also republish an investor alert prepared by the Securities and Exchange Commission (SEC) concerning understanding what it means to grant your investment adviser "custody" of your investment assets. Finally, we include the usual features: Calendar of Upcoming Events, On The Docket, and News from the Regulators.
January / February 2013 Newsletter
In this issue, we report on the sentencing of two men, Mitchell Brian Huffman and Robert S. Moss, both of Charlotte, to prison for operating separate Ponzi schemes. We also provide an update on the status of the Investor Education in Your Workplace® Program in North Carolina. The Securities Division announces that it is sponsoring another round of the program to start in May and which will run until August. Interested employers wishing to bring the program to their employees should contact John Maron for more information. We also report that Barbara Bennett, Investor Education Specialist with the Securities Division, was named as the Department's "2012 Employee of the Year". We also report on an effort by the Department's Corporations and Securities Divisions to provide training to members of the state community college system's Small Business Center Network. We provide information about investor education resources available to citizens and members of the armed services and report on activities undertaken by the Division as part of Military Saves and America Saves Week. We report on efforts taken by the National Futures Association (NFA) to help investors research the professional backgrounds of their commodities brokers. On that theme, we reprint an article published by the Commodities Futures Trading Commission (CFTC) providing consumer information about commodity trading systems that are sold on the Internet. We also reprint an investor bulletin originally published by the Securities and Exchange Commission (SEC) explaining credit risk as it relates to municipal bonds. As usual, we list our Calendar of Upcoming Events, cases that are On The Docket, Recent Enforcement Actions and News from the Regulators.