Sales in Unregistered Securities Are Soaring but It Comes at a Cost - Part 2
From the Desk of Jim Eccleston at Eccleston Law LLC:
This is the second in a series which highlights an InvestmentNews article concerning the recent uptick in the sale of unregistered securities and how those transactions have resulted in the proliferation of fraudulent schemes.
To begin, in an October 2018 report from the North American Securities Administrators Association (NASAA), state regulators have reported that enforcement actions against unregistered brokers and salespeople have increased at a faster rate than enforcement actions taken against registered individuals and firms.
According to NASAA, in 2017, state regulators filed enforcement actions against 675 unregistered individuals and firms, which was an increase of 24% over the prior year. In comparison, that same year state regulators filed enforcement actions against 647 registered individuals and firms, which reversed a two-year trend of the majority of respondents in state enforcement actions were registered brokers and investment advisers.
This trend is significant because unregistered individuals and firms are only on the fringe of the financial consulting industry. Furthermore, unregistered individuals and firms are more likely to sell risky investments to investors because many of them worked outside the supervision of licensed broker-dealers, which are under the purview of FINRA.
The attorneys of Eccleston Law LLC represent investors and advisors nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of practice for financial investors and advisors including Securities Fraud, Compliance Protection, Breach of Fiduciary Duty, FINRA Matters, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.
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