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News Release: 01-15
GRAY DAVIS, Governor
Date: 08/12/01
DEMETRIOS A. BOUTRIS, Commissioner
State Internet Surveillance Team Protects Investors
Department of Corporations Secures Online Advisers' Compliance
Sacramento, August 12, 2001 — Investigators from the California Department of Corporations' Internet Compliance and Enforcement (ICE) Team are conducting a sweep to ensure that individuals offering investment advice on the Internet do not mislead consumers about their status as licensed investment advisers.
"By conducting sweeps like this, the California Department of Corporations is working to prevent complaints before they happen," said Corporations Commissioner Demetrios A. Boutris. "One hundred and twenty of the Internet advisers contacted either verified that they were obeying the law, took their sites off the Web or made the necessary changes to let California consumers know they are not offering professional financial services."
Given that more Californians than ever are logging on to the World Wide Web to pay their bills, purchase products and search for information, the Department of Corporations is taking steps to ensure that online financial advisers who solicit computer-savvy consumers are registered and licensed with the state.
The ICE Team focused its preventive efforts on "expert" Web sites that connect visitors with individuals who hold themselves out as authorities on a variety of subjects. These "experts" answer users' queries via e-mail and/or telephone for a set per-minute fee. The Department of Corporations is continuing its inquiry into a number of additional Web pages that offer investment advice.
The Department of Corporations reminds consumers to contact the Department at www.corp.ca.gov to find out if a company or individual is properly licensed to do business or has any history of violating the law. Failure to properly register or a history of trouble with authorities should be a red flag to any prospective investor.
The Department of Corporations is California's Investment and Financing Authority, reporting to the Business, Transportation and Housing Agency and the Governor. The Department is responsible for the regulation, enforcement and licensing of securities, franchises, off-exchange commodities, investment and financial services, independent escrows, consumer and commercial finance lending and residential mortgage lending. For further information or to obtain a complaint form, see the Department's Web site at www.corp.ca.gov.
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