Suspect Securities Fraud? Report it.
The Office of the Montana State Auditor, Commissioner of Securities and Insurance is a criminal justice agency that investigates and prosecutes insurance and securities fraud. Protecting consumers and rooting out fraud is our top priority.
Montana law requires agents, brokers, or anyone with reason to believe fraud has occurred to report the suspected fraud to our office.
If you prefer to report suspected fraud over the phone, or if you have questions about our online forms, call the Commissioner’s office at (800) 332-6148.
Common Types of Securities Fraud
Investment theft: Investment brokers who steal directly from their clients’ accounts for personal gain are guilty of investment theft. Investors may not immediately notice the missing money, and if they do, the broker may try to dodge the subject or blame the loss on a drop in the market.
Ponzi Schemes: Investment fraud that involves the payment of returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors to create the false appearance that investors are profiting from a legitimate business.
Pyramid Schemes: Unlike multi-level marketing companies, pyramid schemes are fraudulent because compensation is primarily derived from the fees paid by new recruits to the scheme. Participants have to recruit others to the plan to make money. As participants join, additional people must be recruited so that current participants can be paid. The pyramid eventually collapses because participants exhaust the pool of people available and willing to join. Often goods or services are offered in an attempt to appear legal.