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Securities Department
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Securities Department

As State Auditor, Monica J. Lindeen serves as the Montana Comissioner of Securities and Insurance .  As the state regulator of these important financial markets, Lindeen works hard to protect Montana consumers while encouraging capital formation, and economic growth and development in the state.

The Securities Department protects Montana investors by regulating securities transactions. The department registers securities, brokerage firms, investment advisory firms and individuals working for those firms. The department also regulates the sale of living trusts and has authority over multi-level marketing  firms.

In addition to its regulatory function, the department has the authority to investigate violations of the Securities Act of Montana. The Securities Department has jurisdiction over fraudulent securities transactions and has broad enforcement authority to file administrative and injunctive actions and to refer criminal matters to the county attorneys.

Contact us to discuss an investment-related question or concern, call the Securities Department at (800) 332-6148 or (406) 444-2040. We usually request that complaints be submitted in writing, however you may find it useful to discuss your complaint with us before submitting it in writing.

Montana State Auditor's Office
Securities Department
840 Helena Ave.
Helena, MT 59601

Regulatory Functions
Brokerage firms and their representatives doing business in Montana must be registered with the department. The department also registers some of the investment advisers in Montana and all investment adviser representatives in Montana.

In addition to registering firms and salespeople, the department registers some of the securities that are bought and sold in Montana. There are exemptions available, which permit the offer and sale of certain securities without being registered with the department.

The Securities Department is a great resource for information about people offering and selling securities. The department has access to a database that lists all of the people and firms registered to sell securities in the country. You can find out if your firm or salesperson is properly registered in Montana and if they have had any discloseable disciplinary action taken against them. Call the department at (800) 332-6148 or (406) 444-2040 for this information.

Securities salespeople are required to provide you, the investor, with full disclosure about the security they are offering. In addition, brokerage firms and their representatives cannot engage in unethical practices such as churning or excessive trading in your account. Brokerage firms must obtain your prior approval before transacting business in your account, and the securities they recommend must be suitable for your financial situation and investment objectives. For more information about protecting yourself, click here.

The department also may have information about securities offerings being conducted in the state. Companies selling stock directly to investors may have to register or file a notice of their activity with the department.

Enforcement Functions
In addition to its regulatory duties, the department investigates consumer complaints about firms, salespeople and securities scams. The department has the authority to issue administrative cease and desist orders and file for injunctive relief. Also, the department can refer criminal matters to a county attorney for prosecution.

If you receive an unsolicited call from someone offering securities, be careful. Don't give out any personal identification to any unknown person.

Multi-level Marketing Firms
Multi-level marketing firms sell goods or services through independent agents. The compensation structure of these firms rewards participants who recruit others to participate in the sales plan or operation by giving them a portion of the sales commission generated by the recruited individual.

Multi-level marketing firms conducting business in Montana must file with the State Auditor's Office. This filing requirement is for the company itself. Participants and people selling on behalf of the MLM do not have to file. The form for filling is MLD-1.

Pyramid Schemes
While multi-level marketing firms are legitimate businesses, pyramid schemes are illegal in Montana, and the Securities Department investigates and takes action against them. Unlike multi-level marketing companies, pyramid schemes are fraudulent because no goods or services are sold. Compensation is derived primarily 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.

You can read the statute that outlaws pyramid schemes in Montana by clicking here.

Living Trusts
Individuals who want to transfer property and assets to others in a convenient and beneficial manner often establish trusts. Trusts can be used in the estate planning process by people, who upon their death, want their property to pass to their loved ones without going through the probate process. However, estate planning is a complex process encompassing a variety of issues and legal concerns. It is imperative that you consult with a professional well versed in trust and probate law to establish a well-planned and legally sound estate plan. Your lawyer is your best resource.

There are commercial firms that sell "living trusts." Their salespeople are not lawyers. To ensure that these trusts are sold by people who have financial knowledge, Montana law requires that they be registered with the Securities Department. One requirement for this registration is that the individual be registered as an investment adviser or a representative of an investment adviser.

If someone wants to sell you a "living trust," call the Securities Department first to make sure the person is properly registered in Montana.