Investor Alerts and Advisories

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Are you an informed investor? Expense Ratios

Categories: Investor Alert

Mutual funds and exchange traded funds (ETFs) offer investors a cost-efficient way to invest in professionally managed portfolios of securities. While it is often tempting to make a purchase based on a fund’s historical performance, informed investors know that past performance is no guarantee of future performance, and that they must review a fund’s prospectus, shareholder reports and portfolio holdings to see if the fund’s risk/return profile aligns with theirs. An informed investor will pay particular attention to a fund’s expense ratio, which, over time, can eat into a fund’s earnings significantly.

COVID-19-RELATED INVESTMENT SCHEMES ANTICIPATED: State Securities Regulators Outline Fraud Expectations, Provide Investor Protection Guidance

Categories: Investor Alert

Bismarck ND –  Amid the ongoing COVID-19 pandemic, securities regulators continue to urge investors to be on guard against an anticipated surge of fraudulent investment schemes.

Informed Investor Advisory: Affinity Fraud

Categories: Investor Alert

Affinity fraud is a fraudulent financial scheme that involves a scammer who is or appears to be part of a community or interest group. The scammer builds trust within the group, and exploits that trust to push fraudulent, non-existent, and too-good-to-be-true investments on other members of the group.

Be Cautious of the Crypto Investment Craze

Categories: Investor Alert

Cryptocurrencies burst into the investing mainstream in 2017 as the values of some virtual coins and tokens skyrocketed, led by Bitcoin. Mainstream media now feature daily coverage of new cryptocurrencies, coin exchanges, and related investment products.

What to Know about ICOs

Categories: Investor Alert

Initial Coin Offerings (ICOs) are attracting investors interested in new trends in technology investing. Regulation of ICOs is evolving and complex.

Securities Commissioner Reminds Investors to Approach Cryptocurrency with Caution

Categories: Investor Alert

Bismarck, ND, January 4, 2018  With cryptocurrencies continuing to attract headlines, Securities Commissioner Karen Tyler today reminded North Dakota investors to be cautious about investments involving cryptocurrencies. 

Escheatment: Do You Have Unclaimed Property Sitting with the Government?

Categories: Investor Alert

Escheatment is a process whereby the government takes ownership of property, including financial assets, that has been deemed abandoned by the property’s rightful owner. Escheatment of financial accounts typically occurs after a period of account-related dormancy (or “inactivity”) and after attempts to identify and contact the account owners have failed.

EB-5 Fraud: Immigrant Investors Beware

Categories: Investor Alert

In an effort to stimulate the U.S. economy through job creation and capital investment by foreign investors, the U.S. Congress in the early 1990s authorized the creation of a new type of immigrant visa known as the Employment-Based, Fifth Preference (EB-5) visa.

Small Business Advisory: Crowdfunding

Categories: Investor Alert

The Jumpstart Our Business Startups (JOBS) Act, a series of legislative provisions intended to facilitate capital formation in the United States, was signed into law in 2012. This legislation included the CROWDFUND Act, which made significant changes to current federal and state securities laws. The CROWDFUND Act allows entrepreneurs to raise capital by offering to sell interests in their businesses over the Internet. Under the CROWDFUND Act, a small business is allowed to raise $1 million in a 12-month period by selling its securities to investors without registering that offering with federal or state securities regulators. However, the Act places limitations on how and to whom a small business can sell its securities. In May 2106, the Securities and Exchange Commission (SEC) issued rules to implement this new exemption to allow securities sales through crowdfunding.

Investor Advisory: Crowdfunding

Categories: Investor Alert

The Internet has become an inexpensive and easy way for individuals and businesses to raise money. In 2012, Congress passed the JOBS Act, which directed the Securities and Exchange Commission (SEC) to formulate rules to exempt equity crowdfunding from the securities registration laws.  These rules went into effect in May, 2016 and removed restrictions on start-up companies that use the internet to find investors.   

Master Limited Partnerships: An Introduction

Categories: Investor Alert

The Securities and Exchange Commission’s Office of Investor Education and Advocacy is issuing this Investor Bulletin to help investors understand Master Limited Partnerships, or MLPs.  Because investing in an MLP may be unfamiliar, investors should carefully consider potential benefits – and risks – before making an investment decision.

Pension Advance Scams: Retirees Beware!

Categories: Investor Alert

A pension is a type of retirement plan, usually tax-exempt, in which an employee makes contributions toward a pool of funds set aside for an employee’s future benefit. The pool of funds is invested on the employee’s behalf, allowing the employee to receive benefits upon retirement.

  • Are you earning a pension from your employer and need cash fast?
  • Are you an investor looking for new ways to grow your investment dollars?

If you answer yes to either question, you may be the target of a new wrinkle on an old type of scam.

Third-Party Asset Recovery Companies: Are They Advocating for You?

Categories: Investor Alert

Victims of investment scams are wise to use caution if approached by companies promising to help them recover their lost investment funds and bring the perpetrators to "justice."  A third-party asset recovery company is a company that charges a fee to assist individuals in recovering money lost in scams.  The company claims to gather information on the scam and assist the individual in recovering lost investment dollars.  Many of these self-proclaimed recovery companies are not law firms, although they may advertise that they can provide legal assistance.  Typically, the targeted investors have lost thousands of dollars, perhaps even their entire life's savings, to fraudulent investment schemes.

Investor Bulletin: Exchange Traded Notes (ETNs)

Categories: Investor Alert

The SEC’s Office of Investor Education and Advocacy is issuing this Investor Bulletin to educate investors about exchange-traded notes (“ETNs”).  ETNs are unsecured debt obligations of financial institutions that trade on a securities exchange.  ETN payment terms are linked to the performance of a reference index or benchmark, representing the ETN’s investment objective.

Variable Annuities- An Introduction

Categories: Investor Alert

The SEC's Office of Investor Education and Advocacy is issuing this bulletin to educate investors about variable annuities and how they work. Variable annuities are complex products, and this Investor Bulletin focuses solely on the basics. For more in-depth information about variable annuities, see our companion publication, Variable Annuities: What You Should Know.

Be Wary of The Next Big Thing in Investments

Categories: Investor Alert

At first glance, marijuanabinary options, and digital currency appear to have no real connection to one another.  But what they all have in common is their recent emergence as three investments that both sellers and buyers hope will become the "next big thing."  Before you consider investing, make sure you understand what these products are, their benefits, and their risks.  

Non-traded REITs

Categories: Investor Alert

The SEC’s Office of Investor Education and Advocacy is issuing this bulletin to educate investors about investing in non-traded REITs

Identity Theft, Data Breaches and Your Investment Accounts

Categories: Investor Alert

The SEC’s Office of Investor Education and Advocacy is issuing this Investor Alert to provide investors with important steps to take regarding their investment accounts if they become victims of identity theft or a data breach.

Understanding Broker-Dealer Fees

Categories: Investor Alert

Savvy consumers know it is important to compare prices on similar products to get the best value for their money. Wouldn’t it be nice if the same were true when shopping for a broker-dealer firm to know which is best for you. 

Planning for Diminished Capacity and Illness

Categories: Investor Alert

The SEC’s Office of Investor Education and Advocacy and the CFPB’s Office for Older Americans are issuing this bulletin to help investors and consumers understand the potential impact of diminished capacity on their ability to make financial decisions and to encourage investors and consumers to plan for possible diminished financial capacity well before it happens.

Automated Investment Tools

Categories: Investor Alert

The SEC’s Office of Investor Education and Advocacy (OIEA) and the Financial Industry Regulatory Authority, Inc. (FINRA) are issuing this alert to provide investors with a general overview of automated investment tools.

Third-Party Custodians of Self-Directed IRAs and Other Qualified Plans

Categories: Investor Alert

This advisory issued is help investors separate fact from fiction regarding the responsibilities of third-party custodians of self-directed individual retirement accounts (IRAs) and other qualified plans. 


Categories: Investor Alert

The advisory includes tips to help investors recognize a high-yield investment program and offers steps investors should take to protect themselves from these scams.

Virtual Currency

Categories: Investor Alert

It pays to know what’s in your e‐Wallet

Registration or Licensing Status of Financial Professionals

Categories: Investor Alert

Financial professional titles and licenses are not the same.  A financial professional may use various titles whether or not he or she is registered or licensed with a regulatory authority.  Financial professionals that are registered as a broker-dealer or investment adviser have obtained registrations and licenses granted by federal or state regulatory authorities.  Working with a financial professional who is registered with or licensed by federal or state authorities affords you certain legal protections.

Energy Investments

Categories: Investor Alert

With energy demands and a desire for energy independence increasing globally, investments in traditional and alternative energy resources are being promoted more often and are becoming attractive to more investors. Some examples include: wind turbines, solar panels, biodiesel, ethanol, coal, oil, gas, hydrogen, wave, geothermal, oil sands, and liquefied natural gas. Many of these investments are highly risky and are usually not appropriate for all investors. It is not unusual for unscrupulous promoters to follow the headlines and take advantage of unsuspecting investors by engaging in fraudulent practices.

Promoters sometimes prey on investors interested in socially responsible products by labeling them as “green energy” investment opportunities. The phrase “green energy” implies that the products are ecologically friendly when in fact the promoters may be operating a fraudulent shell company and not producing anything.

Are You an Informed Investor? Financial Service Providers

Categories: Investor Alert

Whether you are just starting a retirement fund or need additional help with growing and managing your money, you may benefit from selecting an investment services professional. Finding a person who is knowledgeable, affordable, and trustworthy may be a challenging process. This advisory provides basic information on three types of financial services professionals and their obligations to you as a client: broker-dealer agents, investment adviser representatives, and financial planners. An individual professional can hold any of these three credentials or titles, among others.

Are you an informed investor? Exchange Traded Funds - ETFs

Categories: Investor Alert

Exchange Traded Funds (ETFs) have grown increasingly popular among retail investors seeking safe, stable alternatives to mutual funds.

Before investing in an ETF, ask yourself these questions: Do I understand this investment? Is this investment right for me?

Are you an informed investor? Nutraceutical Stock

Categories: Investor Alert

Many of the products that claim to achieve these objectives are called "nutraceuticals," a term used to describe dietary
supplements and food and drink products that contain additives purporting to provide health benefits. While some of the companies producing these products are legitimate, others could be bogus operations with the potential to harm unsuspecting investors.

Are you an informed investor? Crowdfunding

Categories: Investor Alert

The Internet has become an inexpensive and easy way for individuals and businesses to raise money for their activities. Congress recently passed the JOBS Act, which directs the Securities and Exchange Commission (SEC) to create rules exempting crowdfunding from the securities registration laws. Once implemented these rules will remove restrictions on start-up companies seeking investors over the Internet. Investors should be on the lookout for unscrupulous issuers and intermediaries who may attempt to engage in crowdfunding before the rules are written or misuse crowdfunding to steal from investors through false and misleading representations.

Are you an informed investor? GOLD!

Categories: Investor Alert

Historically speaking, the value of gold-related investments fluctuates even more than the stock market. Gold often moves in reverse of stocks and bonds, so when stocks are down, gold seems like a very tempting investment. Before jumping onto the gold bandwagon, there are a few things you might want to consider.

Are you an informed investor? Social Networking

Categories: Investor Alert

Social Networking in the Internet age allows people to connect to one another more quickly and easily than ever before. Investment promoters increasingly are logging on to find investors...and their money.

Before investing through a social network, ask yourself these questions: Have I verified that the promoter is legitimate? Do I understand the risks of the investment?

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For Assistance Contact:

Adam Montgomery, Examiner / Investigator, Email Adam

Phone: (701) 239-7184; ND Toll Free: (800) 297-5124