Arkansas Securities Attorneys
Investment fraud can happen anywhere—even in Arkansas. A recent case of potential investment fraud in Arkansas illustrates why you may need an Arkansas securities attorney.
In October 2013, Allen Wichtendahl, of Rogers, Arkansas, pled guilty to securities fraud, mail fraud, and money laundering, according to a press release issued by the U.S. Attorney’s Office for the Western District of Arkansas. What happened? In July 2009, Allen Wichtendahl began contacting potential investors, encouraging them to invest in a company called New Vision Technology. He told the investors that New Vision Technology sold products in Bulgaria and planned to open businesses in Nigeria (including a power plant and cassava processing facility). He initially sold “parts” of the company for $3,200, but later increased the cost per “part” to $40,000. Allen Wichtendahl told investors that their investments would make them wealthy—but these investors never saw a penny in return. Instead, Allen Wichtendahl used investor money for his personal enrichment and misled investors as to the financial status of New Vision Technology, inflating the company’s revenue. He was ultimately sentenced to 22 years in prison for defrauding investors out of more than $1 million.
This case demonstrates how investors, whether they be sophisticated or inexperienced, can be taken advantage of by unscrupulous players in the investment world. If you think you may have been the victim of investment fraud, you shouldn’t hesitate to contact an Arkansas securities attorney. You should always contact an Arkansas securities attorney if you have questions about stock fraud in Arkansas, but it is also crucial to understand how Arkansas state regulators work to prevent investment fraud in the first place.How Arkansas Protects Investors from Broker Fraud
How does Arkansas protect investors from investment fraud, including broker fraud?
Arkansas has had a Securities Commissioner since 1959. Initially, the Securities Commissioner operated under the jurisdiction of the State Bank Department. In 1983, the Securities Division became an independent agency. What does the Arkansas Securities Department do? The Arkansas Securities Department is responsible for protecting Arkansas investors by registering brokers, providing Investor Education resources, and enforcing the Arkansas Securities Act.
What is the Arkansas Securities Act? The Arkansas Securities Act has many provisions to regulate the sale of securities in Arkansas and protect Arkansans. In brief, the Arkansas Securities Act:
- defines terms like “security,” “issuer,” and “broker-dealer”;
- outlines criminal and civil penalties for different forms of securities fraud;
- states that the Securities Commissioner may investigate securities fraud at their discretion;
- makes provisions for the funding of the Investor Education Fund;
- defines who must register as a broker or agent and who is exempt from registration; and
- delineates how securities should be registered in Arkansas, and describes which securities are exempt from registration.
The Arkansas Securities Act is Arkansas’s version of a “blue sky law,” which regulates securities at the state level. More more information on “blue sky laws,” see our article “What are ‘Blue Sky Laws’?”
Another way that the Arkansas Securities Department protects investors is through its Investor Education initiative. In 2003, the Investor Education Fund was founded, allowing the Arkansas Securities Department to prioritize Investor Education. The Investor Education division helps investors:
- protect themselves from investment fraud;
- know what to look for in a broker or investment advisor;
- be alert to misleading advertising; and
- understand their rights as investors.
As part of its commitment to Investor Education, in partnership with Kiplinger’s, the Arkansas Securities Department distributes online pamphlets, such as:
- Financial Field Manual: The Personal Finance Guide for Military Families
- Fighting Fraud 101: Tips for Older Investors
- 5 Keys to Investing Success
- Mutual Funds and ETFs: Maybe All You’ll Ever Need
While investing can be exciting and a potential way to build wealth, it is important to stay informed about fraud so that you can protect yourself and safeguard your financial future.
If you have questions about your investments, please contact the experienced securities attorneys of Fitapelli Kurta. Our securities fraud attorneys have worked with investors from Arkansas. Whether you’re in Little Rock, Fayetteville, Hot Springs, Conway, Springdale, or any other town in Arkansas, we’re here to help you. We only get paid if you do. Our attorneys work on contingency: we only collect a fee from clients if we can recover money on their behalf. Call (877) 238-4175 or email email@example.com for your free case consultation.