Top Investor Threats

The following is a list compiled by the North American Securities Administrators Association of the top financial products and practices that threaten to trap unwary investors and small business owners: Unregistered Products / Unlicensed Salesmen: The offer of securities by an individual without a valid securities license should be a red alert for investors. Con artists also try to bypass stringent state registration requirements to pitch unregistered investments with a promise of “limited or no risk” and high returns. Promissory Notes: In an environment of low interest rates, the promise of high-interest-bearing promissory notes may be tempting to investors, especially seniors and others living on a fixed income. Promissory notes generally are used by companies to raise capital. Legitimate promissory notes are marketed almost exclusively to sophisticated or corporate investors with the resources to research thoroughly the companies issuing the notes and to determine whether the issuers have the capacity to pay the promised interest and principal. Most promissory notes must be [...]

Alabama Man Indicted On Securities Fraud Charges

Last month, Jesse Morgan Hinson of Troy, Alabama was arrested for alleged violations of the Alabama Securities Act. Hinson turned himself in to Houston County law enforcement officials based on an arrest warrant issued after an October 2015 Houston County Grand Jury returned a four-count indictment. Hinson was released on $75,000 bond pending trial. The indictment charges Hinson with one count of Sale of Unregistered Securities and one count of Sale of Securities by an Unregistered Agent, Class C felonies, punishable by one year and one day to ten years' imprisonment and a $15,000 fine per charge upon conviction. Additionally, the indictment charges Hinson with two counts of Fraud in Connection with the Sale of Securities for making misrepresentations or omissions of material fact to an investor and for engaging in an act, practice or course of business which operates as a fraud or deceit upon an investor. The fraud charges are Class B felonies, punishable by two to twenty [...]

Pennsylvania Man Charged With Defrauding Investors Out Of $1.2M

Bernard M. Parker of Indiana, Pennsylvania is charged with defrauding twenty-two investors out of $1.2 million and using the cash to pay his mortgage, debit card purchases, and other personal expenses. Parker, who operated Parker Financial Services from his home, was indicted under seal on counts of securities and mail fraud. The case was then unsealed, and the SEC filed a related suit against Parker. FINRA records show that Parker is a former Edward Jones employee. Agents with the FBI, IRS and U.S. Postal Inspection Service said that from 2008 through 2014, Mr. Parker enticed customers to enter into “Investor Contracts” involving the purchase of tax lien certificates for properties in Florida, Colorado and Arizona that would earn returns of 6% to 9% annually, as well as other investments that were not registered by the state or the SEC. Parker told investors that their money invested in his contracts would be used for legitimate investments but then diverted hundreds of [...]

Kansas Man Sentenced In Securities Fraud Case

Paul C. Carageannis of Wichita, Kansas was sentenced to 60 months of probation and ordered to pay the balance of over $165,000 in misused funds to his victims. Carageannis pleaded no contest on June 15th to one count of felony securities fraud under the Kansas Uniform Securities Act. Carageannies bilked at minimum eleven Kansas investors out of more than $165,000 from October 2008 to February 2009 by selling unregistered securities in an oil and gas lease. Although Carageannis led his investors to believe otherwise, he had lost the lease and rather used most of the cash to pay off existing debts and for other personal uses. Almost $82,000 had been recovered for the victims at the time of the sentencing. In addition to imposing an extended term of probation, the court ordered Carageannis to repay his victims the remaining $84,044.32. “My office is pleased that Mr. Carageannis’s victims will see a return of most of their money,” said Kansas Securities Commissioner Josh Ney. [...]