News and Information

INVESTOR ALERT: Self-Directed IRAs and the Risk of Fraud

PHOENIX, AZ— The Arizona Corporation Commission is warning investors of the potential risks of investing through self-directed Individual Retirement Accounts, commonly known as self-directed IRAs. Unlike most IRAs, a self-directed IRA is held by a custodian that often allows investments in a wide variety of alternative investments such as real estate, tax liens, precious metals and private placement securities. Investors should understand that the custodians of self-directed IRAs may have limited duties to investors and generally will not evaluate the quality or legitimacy of an investment and its promoters.

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Commission Sanctions Two Phoenix Businessmen for Investment Frauds Totaling $1.78 Million

PHOENIX, AZ—The Commission ordered two Phoenix businessmen, who were not registered to offer or sell securities, to pay restitution and penalties for defrauding investors out of $1.78 million.

In the first case, the Commission ordered Phoenix resident Ulf Olof Holgersson to pay $957,983 in restitution and a $50,000 administrative penalty for committing securities fraud. The Commission found that, while not registered to offer or sell securities in Arizona, Holgersson told investors he would “borrow” their money and invest it in the stock market, but failed to set up individual brokerage accounts for the investors. The Commission found that Holgersson, who operated under the trade name of Viking Asset Management, promised prospective investors a five percent monthly return, but used the funds to pay for his personal living expenses. Further, the Commission found that Holgersson misrepresented the safety of the investments and issued account statements to the investors showing that their investments had grown tremendously, but almost immediately thereafter, he sent investors a letter stating that he lost all of their money in trading in the commodities market. In settling this matter, Holgersson neither admitted nor denied the Commission’s findings, but agreed to the entry of the consent order.

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Lost and Found or Safe and Sound: How to Solve Mysteries of Old Bank Accounts
Have you ever found an old bank statement, passbook, certificate of deposit or receipt for a safe deposit box and wondered if there is “lost” money or other assets waiting for you or a loved one? This is especially a common occurrence for people who serve as an executor of a deceased person’s estate or as a financial caregiver for an ill or elderly friend or relative. To help you research old bank accounts and, perhaps, recover something valuable, FDIC Consumer News offers these tips.
First determine whether the bank is open (perhaps under a different name), closed or has merged with another bank. The FDIC’s Bank Find, an online database that enables you to trace the history of any FDIC-insured institution, is at http://www2.fdic.gov/idasp/main_bankfind.asp. That Web site also has contact information for open institutions.
• If the bank is still open, “ask if it still has the account or safe deposit box in your name or the name of your loved one,” said Debi Hodes, an FDIC Consumer Affairs Specialist.
Note: If you inquire about someone else’s deposit account or safe deposit box, the bank will likely require you to produce documentation such as a death certificate and a court appointment as executor if the person is dead, or a power of attorney or similar directive giving you the legal right to handle these matters for a living person. The bank may be able to tell you what happened to the money or property.
The owner may have already closed the account (which FDIC officials say is frequently the case). The assets may still be at the bank. Or, the account may have been classified as abandoned after a period of time set by state law. If the latter, the bank would have transferred any money or valuables to the unclaimed property office in the state of the owner’s last known address. However, also be prepared for the bank to have no record of the account. “This can occur when the account Lost and Found or Safe and Sound: How to Solve Mysteries of Old Bank Accounts was closed or transferred to the state so long ago that it has been removed from the bank’s computer system and paper records,” noted Evelyn Manley, a Senior Consumer Affairs Specialist at the FDIC.
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New Standards, Disclosures for Mortgage Professionals Can Help Consumers Find a Loan Originator
Among the steps taken by Congress in 2008 to enhance consumer protections and reduce fraud in the residential mortgage industry was to pass the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the SAFE Act ).
The law also establishes minimum standards for mortgage loan originators (MLOs) who are state-licensed (primarily independent mortgage brokers) and requires all MLOs employed by federally regulated depository institutions and Farm Credit System institutions, as well as certain subsidiaries, to register with the Nationwide Mortgage Licensing System and Registry (NMLS).
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