NASAA Says More Enforcement Actions in Past Year

The North American Securities Administrators Association (NASAA), the entity that represents state and provincial securities regulators, has distributed its annual Enforcement Report. In a public statement, NASAA said there have been a growing number of investigations and enforcement actions involving, precious metals, self directed IRAs, social media, and digital assets.

NASAA reported that state securities regulators opened 5,501 new investigations and continued to work on 2,572 ongoing investigations for a total of 8,073 investigations conducted in 2020. Of those, 8.073 investigations, state securities regulators took 2,202 enforcement actions in 2020.

These enforcement actions collectively led to $306 million in restitution ordered returned to investors, fines of $42 million, and criminal relief of 919 years, including incarceration and probation.

Melanie Senter Lubin, NASAA President and Maryland Securities Commissioner, stated:

“State securities regulators are at the forefront in the ongoing fight against financial exploitation and investment fraud. This report shows that state enforcement activity remained strong in 2020 despite the challenges of the COVID-19 pandemic.”

Joseph P. Borg, Director of the Alabama Securities Commission and co-Chair of NASAA’s Enforcement Section, added that this year’s report shows a tremendous commitment of resources put toward stopping schemes tied to precious metals and other commodities, digital assets, and internet and social media fraud that spread during the pandemic.

“For example, states reported a tripling of enforcement actions involving digital assets and almost twice as many cases involving bad actors using self-directed individual retirement accounts.”

In 2020, state securities regulators opened 196 investigations and 67 enforcement actions involving private offerings. This includes 69 investigations and 24 enforcement actions relating to Rule 506(c). The report does not clearly outline how many actions involved digital assets such as cryptocurrencies.

 



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