A new program from the Securities and Exchange Commission will always (hopefully) catch my attention. I paused for a minute when I saw a press release for the SEC’s update of PAUSE, the “List of Firms Using Inaccurate Information to Solicit Investors.” That sounded interesting. The list even had a catchy acronym. PAUSE stands for Public Alert: Unregistered Soliciting Entities.
For me, interesting turned into a groan, like hearing a bad pun.
Bad acronym aside, I applaud any program that makes investors more aware of bad people trying to take their money away.
The PAUSE list comes from consumer complaints about firms claiming to be registered with the SEC, but are not. Feel free to browse through the list. I found dead links on the first few I tried to check out.
In addition to the PAUSE list, there is also Impersonators of Genuine Firms. This is a list of entities that use a name that is the same as, or similar to, the name of a US registered securities firm, notwithstanding the fact that the soliciting persons are not affiliated with a US registered securities firm. The SEC provides some detail to distinguish the fake firms from the registered firms.
My favorite additional list was the one of Fictitious Regulators. This is a list of entities that claim an endorsement, approval or other support by a governmental agency or international organization that does not exist or does not really lend support to the entity or the investments it is offering. Most of the websites for these scam agencies are dead.
Going back to the original press release, it used the word “update.” That meant PAUSE was not new. It was first created in 2007. (Release Nos. 34-56534 ; IA-2658 ; File No. S7-24-07)
In light of the challenges associated with taking enforcement action against such operations, the Commission believes that it is useful to devise a complementary approach that serves to empower prospective investors. The goal of the PAUSE Program is to provide prospective investors with relevant information about unregistered soliciting entities before they invest.
I don’t remember hearing much about PAUSE in the last 11 years.
