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HELENA, Mont. — In recognition of International Fraud Awareness Week, Securities Commissioner Matt Rosendale is raising investor awareness of the risks associated with investments in promissory notes.

A promissory note is a written promise to pay or repay a specified sum of money at a stated time in the future, similar to a loan or IOU, and generally includes interest.

State securities regulators have identified promissory notes as a leading source of complaints to their agencies. The North American Securities Administrators Association (NASAA), of which the Montana CSI is a member, reported 210 investigations involving promissory notes, which led to 149 formal enforcement actions by state securities regulators last year.

Recent major Montana cases—such as Brandt and Moore—have involved fraudulent promissory notes.

The advisory reminds investors to be cautious of short-term promissory notes. Investors should be cautious about promissory notes with durations of nine months or less, as these notes generally do not require federal or state securities registration. Such short-term notes have been the source of most (though not all) of the fraudulent activity involving promissory notes.

The full advisory is available on CSI’s website HERE.

“Before making any financial decisions, ask questions, do your homework and contact our office if you suspect fraudulent activity,” Rosendale said. “Remember: if a deal sounds too good to be true, it probably is.”