SEC Updates List of Firms Using Inaccurate Information to Solicit Investors
Author: Destiny Aigbe
June 26, 2024
The Securities and Exchange Commission (SEC) recently announced an update to its Public Alert: Unregistered Soliciting Entities (PAUSE) list, which aims to protect investors from fraudulent schemes. The updated list includes 24 soliciting entities, six impersonators of genuine firms, and four bogus regulators. This initiative is part of the SEC's ongoing effort to help investors better inform themselves and avoid falling victim to investment fraud.
Key Takeaways for Investors:
- Increased Vigilance Required: Investors should be particularly vigilant about communications that appear to come from official sources, including the SEC. With the rise of AI technology, it has become easier for fraudsters to impersonate legitimate organizations and individuals.
- Verification is Crucial: Always verify the authenticity of any communication claiming to be from the SEC or other regulatory bodies. Do not provide personal information until you are certain of the identity of the person or entity contacting you.
- Understanding the PAUSE List: The PAUSE list includes firms that have been subjects of investor complaints for providing inaccurate information about their affiliation, location, or registration. It also flags those impersonating registered securities firms and bogus regulators. Note that inclusion on the PAUSE list does not mean the SEC has found violations of U.S. federal securities laws or made any judgments about the merits of the securities being offered.
- Legal Requirements for Firms: Under U.S. securities laws, firms that solicit investors are generally required to register with the SEC. They must also meet minimum financial standards and adhere to disclosure, reporting, and recordkeeping requirements.
- Continuous Monitoring and Updates: The PAUSE list is periodically updated by the SEC’s Office of Market Intelligence in coordination with the Office of Investor Education and Advocacy and the Office of International Affairs. Regularly reviewing these updates can help investors stay informed about potential threats.
For more information on how fraudsters lure victims into scams, you can view the SEC’s investor alert here.
By staying informed and vigilant, investors can better protect themselves from fraudulent schemes and ensure their investments are secure.
About the Author
Destiny Aigbe
Managing Partner
Aigbe Law PLLC | Dark Alpha Capital
A Corporate and Securities Law Firm
With a robust foundation in law and finance, Destiny Aigbe has carved a distinguished career, underpinned by his pivotal role in orchestrating and managing complex transactions that have propelled companies to significant growth and market prominence. As a seasoned attorney and strategic advisor, Destiny has been instrumental in facilitating over $75 million in capital raises, demonstrating a keen acumen for securing funding and fostering investor confidence.
Destiny's leadership in the execution of six successful public listings, through meticulously structured reverse mergers and registration statements, showcases his adeptness in navigating the intricacies of the public markets and his capacity to guide companies through transformative growth phases. His involvement in five mergers as an operator further illustrates his versatile skill set, extending beyond legal expertise to include hands-on management and operational strategy, though these ventures did not involve funding.
Destiny's professional journey is marked by a commitment to excellence and a diverse range of experiences, from representing a wide spectrum of clients including public and private companies, and investment firms, to holding significant roles within the US government. His tenure with the US Department of State and the National Institutes of Health highlights his adaptability and his contribution to the advancement of entrepreneurial ventures in sectors like biotechnology and nanotechnology through strategic funding initiatives.
An alumnus of Vanderbilt University Law School, Destiny focused on Finance and Mergers & Acquisitions, further honing his expertise with a certificate in Law and Business. His foundational education in Finance was obtained with honors from the University of Maryland's Robert H. Smith School of Business, which laid the groundwork for his subsequent achievements in investment banking and legal practice.
Residing in the Washington, D.C. area, Destiny Aigbe continues to leverage his extensive experience and insightful leadership to drive innovation, growth, and success for his clients and the ventures he is involved with.
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