2. Ohio Division of Securities Your Name Here Investment Fraud and Investor Protection

3. INVESTMENT SCAMS n Over $10 Billion a year n $1 million every hour n All educational and income levels

4. Division of Securities n Licensing Section n Registration Section n Enforcement Section

5. Don’t become a Victim.

6. Who Needs to be Licensed? n Sn Sn Sn Salespersons n Bn Bn Bn Brokerage Firms n In In In Investment Advisers n In In In Investment Adviser Representatives

7. Central Registration Depository (CRD) n Salesperson’s Employment History n Customer Complaints n Pending Arbitration n Criminal History n Actions by other Regulatory Agencies

8. Investment Advisers stand in a fiduciary capacity with their clients.

9. Securities Salespeople are Prohibited from: n Making False Representations of Material Fact (i.e.Lying) n Omitting to Disclose Material Information (i.e. not telling you important things) n Selling Unregistered Securities

10. Securities Salespeople are Prohibited from: n Recommending Unsuitable Securities n Executing Unauthorized Transactions n Excessive Trading in Your Account (Churning) n Charging a Price not reasonably related to the Market Price n Receiving Excessive Commissions n Guaranteeing against Losses

12. Securities Investor Protection Corporation (SIPC) n Coverage provides losses suffered by investors in the event of financial difficulties of a brokerage firm. n Provides coverage up to $500,000.

13. Registration of Securities n All Securities sold in the State of Ohio must be Registered or properly Exempt from Registration.

14. Registration Process n Review Terms and Conditions of Offering. n Review Literature in Connection with Offering. (prospectus) Not an endorsement, but a statement that offering has met the minimum requirements of the Ohio Revised Code.

15. Enforcement Section Investigates alleged violations of the Ohio Securities Act and takes action when necessary.

16. INVESTMENTS

17. Characteristics of a Scam n Guaranteed Returns n Promise of Quick Profits n Inside Information n Refusal to send Written Information n Calls coming from distant cities/states n Reluctant to provide Information about sales person or firm n Unusual arrangements for payment. n Poorly presented Financial Products

18. Types of Investment Fraud n PONZI Schemes n Promissory Notes n Viatical Settlements n Franchise/Business Opportunities n International Investing n Boiler rooms

19. Boiler Room

20. Boiler Rooms n Call people in other states n Mooch lists n Answer for every objection n Little or no risk n High rate of return & secret tips

21. Boiler Rooms n Demand immediate action n Won’t disclose street address n Avoid U.S. mails n Stall with excuses n Disappear when heat’s on

22. Pyramid Schemes Pyramid Scheme Pyramid Scheme n Profit or cut for recruiting n No product or way too high priced product n Unrealistic claims Network Marketing n Commission on sale of product n Not paid for recruits n Tangible product or service n Fair market price

23. Ponzi Schemes n Type of pyramid scheme n Use later investors’ $ to pay off early investors - “songbirds” n Promise very large returns in short time

24. Ponzi Schemes n “Can’t lose” way of making money n Collapses when # investors waiting for $> # of new investors n “House of cards” collapses

25. Fraudulent Sales Techniques n High pressure sales tactics n “Decide now before the opportunity is gone” n Promises that sound too good to be true n “The investment is risk-free”

26. Fraudulent Sales Techniques n “There is no time to provide written information and references” n “We need your credit card or checking account number” n “We will pick up the money at your home” n “You have won a free gift or trip”

27. The best part of my job.

28. Investor Bill of Rights n Right to Information on firm/salesperson n Right to Information on Risks/Obligations n Right to good advice n Right to all paperwork n Right to accurate account statements

29. Investor Bill of Rights n Right to have terms explained n Right to your money n Right to prompt service n Right to know what you are being charged and why n Right to State records concerning your broker/salesperson

30. Warning Signs n High Pressure Sales Tactics - Must Act Now ! n Promises of High Guaranteed Returns n Refusal to send you Written Information Before you Invest

31. If it sounds to good to be true.. n It Probably Is !! n Say No to offers you are unsure about

32. The fact of the matter is...

33. Ohio Division of Securities Hotline: 1-800-788-1194