Securities as defined by Wisconsin law, include stocks, bonds, promissory notes and other evidences of indebtedness; shares in mutual funds; stock options; limited partnership interests; interests in oil and gas, mining, or real estate ventures or leases; certificates of deposit; some commodity contracts; and “investment contracts” (a catch-all term for certain kinds of unusual investment arrangements in which the investor is to rely on the effort of others for some essential managerial activities).
Broker-dealers are firms which market investments to the public. Broker-dealers and their sales agents who contact persons in Wisconsin seeking to sell them securities must be licensed by the Department of Financial Institutions.
These firms are also regulated by the Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission (SEC).
The Wisconsin Department of Financial Institutions has specifically asked that investors be on the lookout for the following securities frauds/ investment schemes:
PONZI SCHEMES use the money of later investors to pay off earlier investors. Early investors receive what appear to be high dividends or interest on their investments. Reports of these high returns are then used to entice new investors. In reality, there is no underlying business. The early investors are simply being paid off with funds received from the later investors. When the scheme collapses, as it always does, current investors lose their money and the promoters walk away rich.
AFFINITY SCHEMES use a common connection between you and the salesperson to establish trust. This is simply a ploy to get you to drop your defenses so that you can be separated from your money. Because you are members of the same group, he or she wants you to believe that you would never be defrauded. The fact that the salesperson is of your race, religion, ethnic or other similar type group does not make the investment legitimate.
REAL ESTATE SCHEMES AND OIL AND GAS VENTURE SCAMS come in many forms. Most are designed to convince you to invest in some kind of property or mineral rights at a location that neither you nor other investors have ever seen. Statistical reports and glowing projections are produced to entice you to invest in the hope of becoming an oil baron or a real estate magnate. In fraudulent promotions, even if the property or oil well does exist—which is often not the case—the proposed income-producing activity either does not exist, or does not operate as represented.
The State of Wisconsin has also set up hotlines for investors to call if they have questions or want to report what they believe is an investment fraud. In such instances, investors are encouraged to call the Department of Financial Institutions Division of Securities at 1-800-47CHECK or to mail a complaint to:
Department of Financial Institutions
Division of Securities
PO Box 1768
Madison, Wisconsin 53701
The Department of Financial Institutions has wide regulatory powers and can sanction, bar, or criminally investigate individuals or companies involved in securities fraud. Additionally, investors may also have a private right of action against these firms or individuals.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida. With over 30 years of securities law experience, including experience working at FINRA (f/k/a the NASD) and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses. The firm reviews securities fraud cases throughout Wisconsin, including reviewing securities fraud cases in Milwaukee, Madison, Racine, Kenosha, Sheboygan, Osh Kosh, Green Bay, and Janesville.
If you have questions about investments you made in Wisconsin, the securities attorneys of The White Law Group may be able to help. For a free consultation, call the firm’s Chicago office at 312-238-9650.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.