Securities regulator visits Libby

Montana Commissioner of Securities and Insurance Monica Lindeen was in Libby Wednesday afternoon to host a screening of a made-in-Montana documentary about investment fraud in the state.

The documentary, Gold Diggers: Investment Fraud in the Treasure State, tells the story of two of most notorious investment scams to be perpetrated upon Montana residents in recent history. Narrated by actor Bill Pullman, the film features interviews with the victims, securities experts and regulators.

Lindeen has been the Commissioner of Securities and Insurance in Montana for more than seven years. In that time, she said, the department has managed to recoup approximately $375 million for citizens duped by fraudulent investment scams.

“The problem, though, is that we know there’s at least that much or more out there we haven’t been able to recoup for people,” she said.

Recouping money from investment scams is generally difficult for two reasons, Lindeen said.

First, many people don’t report investment scams, especially when the perpetrator is someone they know and trust. Lindeen said it’s not only hard for people to report someone they trust for a crime, people also have difficulty admitting they’ve been scammed. Part of the tour’s intent, she said, was to show people that anyone can be the victim of fraud and the way to stop it is to report it and make people aware of the potential dangers that exist.

The second problem is that many of the investment scams originate in foreign countries or the money is moved offshore or spent so quickly regulators can’t seize it.

“A lot of times by the time the scam is reported, the money is already gone,” she said. “Unless they leave assets we can seize, it’s awfully hard to recoup people’s money.”

The state does have a Victim Restitution Fund, from which people can apply to have a portion of their stolen money returned. To date, the fund has reimbursed around $400,000, she said.

Investment scams, she said, take a variety of forms but there are some simple steps people can take to ensure they’re not being scammed.

First, she said, investors should do a bit of homework before they invest. All securities and investment people are required to be licensed through the Department of Securities and Insurance. A quick phone call to the office is all it takes to find out if the person is licensed. If they’re not, don’t give them any money. The department, while not able to provide investment advice, can also give callers basic information about various types of investments so potential investors can make educated decisions before investing.

“It’s just amazing to me how creative people can be when it comes to separating people from their money,” Lindeen said. “Everyone should call and check. If it sounds too good to be true, it probably is.”

Other steps potential investors should take to protect themselves include reading their monthly or quarterly statements and asking questions. 

“Read your statements,” she said. “Call your broker and ask questions. If you’re not satisfied with the answers, speak to their supervisor. If that doesn’t work, call our office. We’re here to help.”

Other tips Lindeen offered include never signing checks made out to invidivual investment brokers, always make sure the checks are written to the company. She also advised people never sign blank forms or forms they don’t completely understand. And never, she said, buy investment products over the phone.

Lindeen advised people considering making investments should go through reputable firms. The firms generally maintain more stringent compliance rules and also carry insurance policies that help victims and regulators recoup money in cases where a particular broker or dealer representing the firm commits fraud.

Above all, she said, potential investors need to know what they’re buying and from whom they’re buying it.

“The bottom line, always do your homework,” she said.