This Order revises and applies existing regulations and orders that were issued under previous statutes to the Vermont Uniform Securities Act that became law on July 1, 2006. All Exhibits are included.
Please note: Exhibit 3.1 Agent Registration Fees have increased from $55.00 to $60.00.
The Vermont Uniform Securities Act contains a broad definition of the term "security." Thus, the popular concept of what constitutes a security -- stocks and bonds -- is incomplete. The term also includes, among other things, limited partnership interests; notes; variable annuities; evidences of indebtedness; interests in or under an oil, gas or mining lease; and "investment contracts." 9 V.S.A. § 5102(28)
Think through your financial objectives. Fully evaluate your personal finances and decide how much you want to invest, how much return you need and how much risk you are willing to take BEFORE discussing your financial goals with your broker.
Get references. Ask friends, relatives and co-workers forf the names of brokers who have served them well.
Contact the Financial Industry Regulator Authority (FINRA) hotline at (800) 289-9999 for more information about firms and their registered representatives.
There are more than a thousand brokerage firms available to sell you securities. Some may have offices in Vermont, while others may conduct their business from outside the state via mail, telephone or by computer. No matter where they are located, Vermont law requires all firms and their salespersons to be registered with the Vermont Securities Division.
The telephone rings . . . It happens to all of us. The telephone rings as you’re sitting down to dinner, relaxing with family or friends, or putting the kids to bed. A stranger is selling something. . . . is there help or trouble on the line?
It’s known as “cold calling.” For many businesses, including securities firms, cold calling serves as a legitimate way to reach potential customers. But sometimes, serious trouble and financial losses await you at the other end of the line. Dishonest brokers may pressure you to buy a bad investment. Or the investment might be a scam. Whether the calls are annoying, abusive, or downright crooked, you can stop cold callers. The law protects you by requiring cold callers to follow several rules. But you need to take steps to take advantage of these rules and to protect yourself.
When people from the securities industry call to sell you something, they must:
Call Only Between 8:00 a.m. and 9:00 p.m.
These time restrictions do not apply if you are already a customer of the firm or you’ve given them permission to call you at other times. Cold callers may call you at work at any time.
Say Who’s Calling and Why
Cold callers must promptly tell you:
their name,
their firm’s name, address, and telephone number, and
that the purpose of the call is to sell you an investment.
Be cautious when strangers offering get-rich-quick schemes contact you with “cold” phone calls, e-mails or unannounced visits to your home.
The phone calls could be “boiler room” scams, featuring operators who rent offices with impressive addresses. They hire unlicensed salespeople to work banks of phones, calling individuals from lists the promoters buy. The promises of fast profits usually don’t come true.
Question fantastic promises of extraordinary returns on your investments.
Shy away from high-pressure sales techniques requiring hurried money commitments.
Some fraudulent schemes have used messengers to pick up investors’ checks almost as soon as they ended a phone call.
Avoid investments in which the seller has little or no written information about the company or its past performance.
Then again, even printed materials can be fakes. Read all materials carefully, ask questions and check with experts.
Be wary of investments that are sold on the basis of rumors, tips or supposedly inside information.
Ask the seller to give you written information about the investment, including the prospectus (also called an offering circular) and financial statement.
Such information is required for many types of investments, including stock and franchise offerings, limited partnerships and mutual funds. Read this information before you sign a purchase order to pay for an investment.
Consult with your registered stockbroker, banker, lawyer, accountant or real estate agent.
