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Regulation and Compliance > Federal Regulation > SEC

SEC Releases Updated List of Fake Regulators, Deceptive Firms

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The Securities and Exchange Commission on Monday updated its list of fictitious regulators and firms falsely claiming to be registered, licensed and/or located in the U.S., along with entities that impersonate actual U.S. registered securities companies.

Included in the fresh list are 25 new soliciting entities and four phony regulators: Board of Financial Affairs, Finance Regulation Board, New York Compliance Regulatory Board and US International Registry & Compliance Agency.

In comparison, last year’s updated list included 11 firms, four fake versions of real firms and nine fictitious regulators.

The entities on the updated list came to the SEC’s attention through investor complaints and is known as the Public Alert: Unregistered Soliciting Entities (PAUSE) list.

The latest additions are firms that SEC staff discovered were providing inaccurate information about their affiliation, location or registration to solicit primarily non-U.S. investors, the SEC noted. Under U.S. securities laws, firms that solicit investors generally are required to register with the SEC and meet minimum financial standards and disclosure, reporting and record-keeping requirements, it pointed out.

Along with the new additions, the full updated PAUSE list includes the names of many entities, listed alphabetically, that have been amassed over time and were included on prior lists.

The list enables Main Street investors to “better inform themselves and avoid being victims of fraud,” according to the SEC.

“Today’s updates to the PAUSE list reflect one way the Commission uses tips and complaints to protect and inform Main Street investors,” according to Jennifer Diamantis, chief of the SEC Enforcement Division’s Office of Market Intelligence. “The new enhancements to the PAUSE website will allow investors easy access to resources to help protect their investments and avoid fraud,” she said in a statement.

The enhanced PAUSE website is also “now more streamlined and user-friendly with revised descriptions, relevant educational material, and new search capabilities,” the SEC said. Its new layout “allows investors using internet search engines to easily find” Public Alerts, it added.

Inclusion on the PAUSE list, however, does not mean the SEC found violations of U.S. federal securities laws or made a judgment about the merits of any securities being offered, the regulator pointed out.

The PAUSE list is periodically updated by the Office of Market Intelligence in coordination with the Office of Investor Education and Advocacy and the Office of International Affairs.

— Check out Reg BI Compliance Race Is On on ThinkAdvisor.


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