SEC launches Web-based program to warn investors about questionable securities solicitations |
Date: Thursday, September 27, 2007
Author: James Langton, Investment Executive
Regulator seeking public comment
The U.S. Securities and Exchange Commission today announced a new
Internet-based initiative to alert investors worldwide about problems
with certain unregistered entities engaged in solicitations of
securities transactions.
Through its “Public Alert:
Unregistered Soliciting Entities” (PAUSE) program, the commission will
publish on its Web site certain factual information about unregistered
soliciting entities that have been the subject of complaints forwarded
by investors and others around the globe, including foreign securities
regulators. The commission is seeking public comments on the PAUSE
program before it begins.
The SEC says that by sharing
information received in complaints about particular unregistered
soliciting entities earlier, it is aiming to give retail investors a
new tool to help them avoid questionable investment solicitations,
including solicitations from online boiler room and advance fee scheme
operations.
“Ferreting out operators of boiler rooms and
secondary advance fee schemes that prey on innocent investors is a
priority of this commission,” said SEC chairman Christopher Cox in a
news release. “The PAUSE program is designed to proactively attack this
problem, using the Internet to fight back by arming investors with
information in real time to help them ask tough questions before giving
their hard-earned money to strangers. This encourages all investors to
PAUSE and determine whether an entity is properly registered with the
SEC or located in the United States as claimed. We look forward to
hearing the public’s views about this important initiative.”
To
implement the PAUSE initiative, the commission will post on its public
Web site specific information about unregistered soliciting entities
that have been the subject of complaints. For each of these entities,
the commission’s staff will have determined either that there is no
U.S. registered securities firm with that name, or that there is a U.S.
registered securities firm with the same or similar name, but that
solicitations appear to have been made by people not affiliated with
the U.S. registered securities firm. A second PAUSE list will name
fictitious government agencies and international organizations referred
to by entities that are subjects of complaints.