PAUSE before you invest: Check the Recently Updated SEC List of Firms Using Inaccurate Information to Solicit Investors
Several minutes of online research could protect your entire life savings. The U.S. Securities and Exchange Commission (SEC) recently updated its list of firms using inaccurate information to solicit investors. They added 11 soliciting entities, four impersonators of genuine firms and nine regulators that actually don’t exist.
Researching the companies and financial firms through which you are investing is the most critical step in avoiding broker negligence and investment fraud.
The list, known as the Public Alert Unregistered Soliciting Entities (PAUSE) list was compiled by the SEC in 2007 and has been updated based on thousands of complaints from investors about companies who were providing inaccurate information about their affiliation, location or registration. In the United States, firms that solicit investors are generally required to register with the SEC and meet minimum financial standards and disclosure, reporting and record keeping requirements.1
The firms on the PAUSE list fall into two categories. The first is a list of impersonators of genuine firms. These include entities that use a name that is the same as, or similar to, the name of a legitimate U.S. securities firm that is registered with the SEC. In many cases, these impersonators even report having the same address as the legitimate firm.
The second PAUSE list is a list of fictitious regulators. The impersonators claim that their offerings to investors are endorsed, approved or supported in some way by these fictitious governmental agency or international organizations.2 Some of the official sounding groups on this list include The Board of International Equities, the Central Finance Regulatory Commission, and the Economic and Financial Securities Commission. Many of these entities have purported addresses in Washington, DC, to further enhance the appearance of legitimacy.
One of the recent additions to the PAUSE list involves a Michigan-based firm, Global Financial Group Advisors LLC d/b/a Stonebridge Financial. The impostor firm has a very similar name — Global Financial Group Advisors. The legitimate Michigan firm is located in Grand Rapids, Michigan, but the impostor is located in New York. According to the PAUSE list, the impostor has no connection with, and is not to be confused with, the genuine entity.3
It is important to note that the PAUSE list is not all inclusive. It does not include all unregistered entities, impersonators of genuine firms, fake regulators or entities that have been the subject of complaints received by the SEC.4 Investors should also be aware that inclusion on the PAUSE list doesn’t mean that the SEC has concluded that a violation of the US securities laws has occurred or that the SEC has made any judgment about the merits of the securities being offered by these entities.5 For more tips and resources on how to avoid investment fraud schemes, visit the SEC website www.investor.gov.
Don’t be a victim of securities or investment fraud, ask questions and know your rights. Our Michigan Securities Law Firm has over 20 years’ experience in securities litigation, investment fraud, ponzi schemes and more. Call us if you believe you have been a victim and have suffered financial losses. Broker negligence and misconduct is punishable by law and an experienced securities lawyer can help. Call today at 313-334-7767 for a case evaluation.
1 SEC Updates List of Firms Using Inaccurate Information to Solicit Investors, www.sec.gov, 6/10/2019
2,4,5 Public Alert: Unregistered Soliciting Entities (PAUSE), www.sec.gov
3 Public Alert: Unregistered Soliciting Entities (PAUSE), www.sec.gov, 6/10/2019