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Who’s Minding the Store-Regulating the Securities Industry

Who’s Minding the Store-Regulating the Securities Industry. Securities and Investments. Regulating the Securities Industry. Regulations (continued). Regulations (continued). Regulations (continued). State Regulations. Texas State Securities Board Texas Securities Act

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Who’s Minding the Store-Regulating the Securities Industry

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  1. Who’s Minding the Store-Regulating the Securities Industry Securities and Investments

  2. Regulating the Securities Industry

  3. Regulations (continued)

  4. Regulations (continued)

  5. Regulations (continued)

  6. State Regulations • Texas State Securities Board • Texas Securities Act • Provides that securities in Texas are registered • Those who sell securities must also be registered • Also provides investor education • All states have securities regulations called “Blue Sky” laws

  7. Types of Fraud • Affinity fraud • Fraud that targets a group of people such as immigrants or people of the same religious affiliation. • The scammer tries to empathize with the particular group. • Baby Boomer (Elderly) fraud • These scammers target people of a certain age group who may be facing financial challenges due to caring for elderly parents. • They may also target those people nearing or at retirement who can use extra income.

  8. Types of Fraud (continued) • Ponzi Scheme-also known as “Pyramid” scheme • A plan that pays early investors with the contributions of later investors with no real investment actually existing. The only individuals making money are the initial few at the expense of the later investors.

  9. Unethical Corporate Behavior and Fraud • Well-known companies: • Enron • Basically losses and debt were hidden from the public which made the company appear more profitable than it was, with the help of accounting firm Arthur Andersen. Executives made millions from selling off stock causing the demise of company pensions. • WorldCom • Company executives and accountants overstated assets among other criminal corporate activity, which quickly led to bankruptcy and losses for investors. • Tyco • Executives reportedly made loans from the company and never repaid in addition to profiting from fraudulent securities sales.

  10. Formal Assessments • Regulator Acronym Assignment #1 - Students are to select any two of the many regulatory agencies they have learned about in this lesson. Then they will place the initials of that organization on a posterboard or on the computer on a word processing document if a lab is available, and for each letter they will create a phrase beginning with that letter that describes an aspect of the agency and what it does. • Recognizing Fraud Assignment #2 – In pairs, students are to select a brochure relating to frauds and scams located on the North Carolina Secretary of State website. They will create a presentation to present to the class using either presentation management software, an online presentation program, or visuals such as posters and handouts explaining the topic and suggested ways to avoid the unethical or illegal behavior. • Letter to the President Assignment #3 – Instruct students to pretend that they are one of the employees of one of the companies that have been discussed regarding fraud and unethical behavior. You have been hurt by the company’s actions so now you are typing a letter, using proper personal-business letter format, that 1) states your purpose for writing the letter, 2) explains in detail all of the ways the company has hurt you and how you feel about its actions, and 3) a request for some sort of resolution that the company can make to the people who were hurt.

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