SEC Updates Its List of Unregistered Firms That Use Misleading Information to Primarily Solicit Non-U.S. Investors
On August 6, 2018, the SEC announced that it has updated its list of unregistered firms that use misleading information to primarily solicit non-U.S. investors, adding 16 soliciting entities, four impersonators of genuine firms, and nine bogus regulators.
The updates by the SEC Division of Enforcement’s Office of Market Intelligence, in coordination with the SEC’s Office of Investor Education and Advocacy and the Office of International Affairs, are part of the agency’s continuing effort to protect retail investors.
The SEC’s list of soliciting entities that have been the subject of investor complaints, known as the Public Alert: Unregistered Soliciting Entities (PAUSE) list, enables investors to better inform themselves and avoid being a victim of fraud. The latest additions are firms that the SEC staff found were providing inaccurate information about their affiliation, location, or registration.
Under U.S. securities laws, firms that solicit investors generally are required to register with the SEC and meet minimum financial standards and disclosure, reporting, and recordkeeping requirements.
In addition to alerting investors to firms falsely claiming to be registered, the PAUSE list flags those impersonating registered securities firms and bogus “regulators” who falsely claim to be government agencies or affiliates. Inclusion on the PAUSE list, according to the SEC, does not mean the SEC has found violations of U.S. federal securities laws or made a judgment about the merits of any securities being offered.
Before investing, the SEC strongly encourages individuals to check the background of anyone selling an investment using the free “Check Out Your Investment Professional” search tool at Investor.gov. Additionally, the SEC recommends to always verify that the seller is currently licensed or registered.