October 2022

Scam Jams Bring Anti-Fraud Message to Wendell and Roanoke Rapids 

As part of World Investor Week 2022 (October 3-9), Secretary Marshall and her representative spoke at anti-fraud events in Wendell and Roanoke Rapids.

Secretary Marshall was one of the featured speakers at Triangle Family Services' Scam Jam anti-fraud event in Wendell on October 4th. She spoke about the Department's work to protect North Carolinians from investment fraud and dangerous counterfeit prescription drugs, the importance of smart giving, and the Secretary of State's Advance Health Care Directive Registry.

Secretary Marshall warned that scam artists use people’s concerns about global inflation, economic disruptions and market volatility to lure investors through promises of supposedly “safe” investments with “guaranteed” returns. She also urged everyone to beware of schemes touting quick guaranteed returns for seniors and everyone else who’s worried about losses to their retirement portfolios.

NC Secretary of  State Elaine F. Marshall speaking in Wendell.

Approximately half the Securities Division’s enforcement actions involve fraud aimed at seniors. And studies indicate that for every documented case of a senior being ripped off, another 44 cases never get reported at all.

Reasons for that include seniors’ concerns that if their adult children learn of them being defrauded it could cast doubt on whether their parents should still be living on their own or managing their own finances.

Secretary Marshall speaking to Scam Jam attendees in Wendell.

Marshall implored seniors to not let that stop them from reporting scams, noting that a wide range of professionals can fall prey to scams.

“Listen, business owners get scammed. Doctors get scammed. Lawyers get scammed. These crooks are called scam “artists” because they are “artists” in a truly twisted way. They’ve just chosen to devote their “talent” to doing harm – to stealing people’s savings instead of helping them build their savings.”

Call our NC Investor Hotline at 1-800-688-4507 when considering an investment opportunity to make sure the individual promoting the investment is registered to sell securities in North Carolina and that the investment opportunity itself is registered.

Marshall also urged people to check out online pharmacies through the Center for Safe Internet Pharmacies search engine at verifybeforeyoubuy.org to assure that the pharmacy they’re considering buying their meds from is legitimately allowed to do business in the United States. She noted 97% of online pharmacy are not legitimate to do business in the United States, meaning that regulators have no way of determining how much of what those pharmacies sell is actually counterfeit and dangerous. Scam Jam attendees also learned about the secure, online Advance Health Care Directive Registry that's hosted by the Secretary of State's Office.

On October 6th, Investor Education and Protection Services Director John Maron presented similar information during a Scam Jam in Roanoke Rapids.

More Information

The SEC’s Office of Investor Education and Advocacy, the Commodity Futures Trading Commission (CFTC), the Financial Industry Regulatory Authority (FINRA), the National Futures Association (NFA), and the North American Securities Administrators Association (NASAA) have prepared this Investor Bulletin with tips for becoming a more resilient investor. 

Institute for the Fiduciary Standard Podcast Takes on the Influence of "Finfluencers"

Secretary of State Investor Protection and Education Services Director John Maron joined a panel of experts on September 21st for a discussion of the dangers of so-called “Finfluencers” offering financial advice. Our finfluencer advisory, as well as advisories on other investment-related topics, can be found at https://sosnc.gov/online_services/securities/investor_education_booklets. 

Click on the image below to listen to the conversation in its entirety.

Rural RISE NC Initiative Expands into Lenoir and Greene Counties

Secretary Marshall visited Kinston this month for a business roundtable featuring local small business start-ups from across Lenoir and Greene Counties. Marshall met with local business owners as she announced the addition of Lenoir and Greene Counties to the Secretary of State's Rural RISE (Resources for Innovators, Start-ups and Entrepreneurs) NC Initiative. The Initiative connects new businesses with free and low-cost resources.

Marshall updated the region's business people on the robust new business creation filing numbers being processed by SOSNC's Business Registration Division. She also briefed them on the work being done through the Agency's Rural RISE NC initiative to connect Innovators, Start-Ups, and Entrepreneurs with crucial resources.

The Secretary of State's Office has a variety of resources available for small businesses across North Carolina. While Rural RISE will be statewide, the core focus will be on the 78 counties across North Carolina that are considered rural.

ATTENTION D/B/As:

Take Action Now!

On December 1, 2017, the North Carolina Assumed Business Name Act (N.C.G.S. 14A § 66-71) took effect. Under this revised law, any company that registered its assumed name before December 1, 2017, must re-file an assumed name certificate with their county Register of Deeds before December 1, 2022, in order to continue doing business under that assumed name. If you filed an assumed name certificate after December 1, 2017, you do not need to refile.

With this single filing, the business may choose the counties in which it wants to do business using the assumed name. Furthermore, the new law requires the NC Department of the Secretary of State to maintain a registry of all assumed business names from across the state.

Failure to re-register by December 1, 2022 will mean that the business will lose its registered assumed business name. Please note: The registration of an assumed business name does not confer or protect the uniqueness of a name (multiple unrelated businesses may have the same exact registered assumed business name). Registration is designed to promote business transparency by identifying the owner of a business and how to contact them if there is a dispute. Failing to re-file by the deadline not only means losing the registered assumed business name, but it will expose the owner to damages associated with the cost of identifying them if litigation is brought against them by another party.

Don't delay. Re-register today! Click here to find your county's Register of Deeds Office.

Give Generously, but Wisely to Support Disaster Relief Efforts

As the long recovery process from Hurricane Ian moves forward, North Carolina Secretary of State Elaine F. Marshall continues to urge North Carolinians to keep a weather eye out for scams to assure that their charitable contributions make it to the people in need. 

“We all watched the heartbreaking scenes of devastation and loss in Florida, and felt significant impact here in North Carolina after the hurricane made its second U.S. landfall in South Carolina,” Secretary Marshall said.

“In the face of such immense suffering we all want to reach out and help, but I encourage everyone to do a little research as you’re reaching out to make sure your donations are doing the most good possible.”

If you get an unsolicited solicitation through a call, text, email or message on social media, research the organization yourself online instead of clicking on links in the unsolicited message. Also make your donations directly on the charity’s official website rather than clicking on a link in a text or email.

Secretary Marshall offers these other tips for smart giving:

• Give to established charities with resources on the ground to help the affected regions.

• Research charities registered with the Secretary of State’s Charitable Solicitation Licensing Division at https://www.sosnc.gov/divisions/charities and download the Smart Donor Checklist for a list of suggested questions you should ask any charity that solicits you for contributions.

If you have gotten a suspect solicitation—contact our Charitable Solicitation Licensing Division at 1-888-830-4989 or visit us online at sosnc.gov to report it. The more detail you can share the better. So take a screenshot of the message, or in the case of a suspicious phone solicitation try to write down all the details you remember about the call.

For North Carolinians who want further guidance, Charity Navigator has compiled and rated a list of charities helping with Hurricane Ian relief efforts.

Cyberattacks and data breaches are on the rise among small businesses, partly because many may lack the resources to put strong cybersecurity plans and practices in place. The Cybersecurity Infrastructure and Security Agency (CISA) offers an Action Plan for Small Businesses to help small businesses be safer and more cyber aware, including setting up multi-factor authentication (MFA).

Cyber attacks can be devastating, and they’re increasingly common among small and mid-sized businesses. In 2020 alone, there were around 790,000 instances of cybercrime in the United States, which is 300,000 more than the previous year. In total, these attacks cost losses of $4 million. With such a rapid increase in cybercrime and the increasing threat of attacks, you must take the relevant steps to prevent your business from being a target. The National Cybersecurity Alliance details everything you need to know.

SMALL TO MID-SIZED BUSINESSES ARE EASY TARGETS

You may think you don’t need to be concerned about the threat of cyberattacks on your small business, but the harsh reality is cyber attackers know small and medium-sized companies don’t take so much care when it comes to their cybersecurity. Therefore, they become easy targets. 

It’s reported that a whopping 43% of U.S. cyberattacks in 2018 targeted small businesses. This staggering statistic proves just how important cybersecurity is for even the smallest companies.

PLAN AHEAD

Once you truly understand the threat cyberattacks pose to your business, the first step to take is to plan a disaster response. Also known as a disaster recovery plan, this process enables companies to respond to cyber breaches as quickly as possible and redirect resources into restoring any lost data.

Steps to developing an effective disaster response include:

• Consider which stakeholders may be impacted.
• Conduct a business impact analysis to prioritize the most important systems.
• Perform a disaster recovery plan test run.
• Review the efficacy of the test run, and make improvements.
• Review the plan regularly to ensure procedures are still comprehensive and effective.

CISA's Action Plan for Small Businesses breaks cybersecurity tasks down by role, starting with the CEO. It then details tasks for a Security Program Manager, and the Information Technology (IT) team. While following this advice is not a guarantee you will never have a security incident, it does lay the groundwork for building an effective security program. 

NASAA's Senior Issues and Diminished Capacity Committee Presents: Securities Regulators and Adult Protective Services Agents Speak

On November 3rd, NASAA’s Senior Issues and Diminished Capacity Committee will present the third installment of its series of webinars featuring knowledgeable securities regulators and adult protective services professionals who work in the trenches to combat at-risk investor abuses. They will discuss the issues that they confront and the methods that they use to mitigate exploitation.

Panelists will discuss new trends that they see, enforcement work to stop fraud, multidisciplinary teams working at the local, state and federal level, training and education initiatives and more. There will be detailed discussion about how the SEC, FINRA, state regulators and Adult Protective Services agencies work together, and separately, in this space.

This free, 90-minute live webinar will begin at 2:30 PM and is open to the public. It will provide benefits to anyone who is interested in learning more about vulnerable/retirement-stage investor protection issues.

Click Here To Register

NASAA 2023 Fee Announcement

The North American Securities Administrators Association (NASAA) has announced the continued waiver of Investment Adviser Registration Depository (IARD) system fees in 2023 for state-registered investment adviser firms, and the continuation of the initial set-up and annual system fees paid by investment adviser representatives.

Effective January 1, 2023, the initial IARD set-up and renewal system fees will remain $15 for investment adviser representatives. This fee was $45 when the IARD system became operational in 2001. These fees fund user and system support as well as system enhancements of the IARD system to improve its effectiveness and efficiency and to make it more user-friendly for applicants and registrants.

NASAA President and Iowa Deputy Securities Administrator Andrew Hartnett said NASAA’s Board regularly monitors IARD operations and costs to determine when a fee change is warranted to ensure the effective and efficient operation of the IARD system.

IARD is an electronic filing system for Investment Advisers and Investment Adviser Representatives sponsored by NASAA and the Securities and Exchange Commission (SEC). The system provides investment advisers and their representatives a single source for filing state and federal registrations and notice filings with regulators. Public access to certain regulatory filings made through the IARD is available through the Investment Adviser Public Disclosure (IAPD) database.

Recent SEC Action and Updated Investor Alerts

On October 12th, the Securities and Exchange Commission adopted amendments to the electronic recordkeeping, prompt production of records, and third-party recordkeeping service requirements applicable to broker-dealers, security-based swap dealers (SBSDs), and major security-based swap participants (MSBSPs). The amendments are designed to modernize recordkeeping requirements given technological changes over the last two decades and to make the rule adaptable to new technologies in electronic recordkeeping. The amendments will also facilitate examinations of broker-dealers, SBSDs, and MSBSPs. Click here for more information.

The SEC’s Office of Investor Education and Advocacy recently issued updated versions of two of its Investor Bulletins to provide investors with the latest information about investing in Initial Public Offerings (IPOs) and securities-based crowdfunding opportunities. Click here to browse all of the SEC's Investor Bulletins.