Massachusetts Pursues Out-of-State Firms for Failing to Register
The Enforcement Section of the Massachusetts Securities Division has filed actions against two firms who solicited investors in Massachusetts without proper registration of the firms or their agents. In one complaint, the MSD alleges that an Ohio firm operating a Forex trading scheme that lost money met with Massachusetts residents in Massachusetts. In the other action, the MSD alleges that a BVI firm used a third party solicitor to solicit Massachusetts investors. The MSD seeks disgorgement and rescission. The MSD alleges violations of the Commonwealth’s registration provisions, although it did not allege any underlying fraud.
OUR TAKE: The states have stepped up enforcement activities of in-state solicitation by out-of-state firms. This will likely increase as the states expand their jurisdiction due to Dodd-Frank. These cases show the hazards of failing to register: disgorgement of all fees and rescission of past transactions.
Posted by Todd Cipperman at 3/9/2011 7:30 AM 
Categories: Distribution and Broker-Dealers
Tags: state registration enforcement solicitation
Categories: Distribution and Broker-Dealers
Tags: state registration enforcement solicitation
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