Who is Protecting Our Investments?

CASH KID

If we're going to be money-savvy kids, we must know how to watch out for scams and frauds that will cause us to lose our hard-earned money.

In this episode of the Cash Kid Podcast, we explore the importance of investment protection and scam prevention with Amanda Senn, the director of the Alabama Securities Commission. Learn about the role of the Securities Commission, real-world examples of its impact on preventing fraud, and how technology affects financial safety. Discover actionable tips on how to safeguard personal information, the significance of financial literacy, and the new financial education requirements for high school students. This informative episode aims to educate kids and adults alike on the essentials of financial protection and literacy.

Episode:

So, you got some cash, maybe from an allowance? Or, that money your grandma gave you for your seventh birthday.

Here ya go, sweetie! Woo hoo! Thanks, Grandma! Whatever it is, what are you gonna do with it? Spend it? Hide it away? Or maybe invest it? Let's start learning how to make that money grow. Time to learn how to be a Cash Kid.

Millions of dollars lost to fraudsters.

Scams across the states.

The elderly and kids are big targets.

Who is working to protect our investments?

And how can kids my age help stop these scams?

Plus, taking a financial course is now a graduation requirement in my state.

Yep.

We’ve got it all covered in this episode of the Cash Kid Podcast where we went on the road to talk with The Alabama Director of the Securities Commmission, Amanda Senn.

I personally, had no idea what this department in our state was doing for us everyday.

How there are people behind the scenes working to make sure only legitimate business is being conducted and stop fraudsters so we can protect our hard earned money.

If you aren’t already, be sure to follow us on social media @cashkidpodcast. Visit our website at cashkidpodcast.com and join our mailing list.

Please, please, leave a review from whatever platform you are listening from and help us spread and grow the Cash Kid mission.

Alright, we traveled to Montgomery, Alabama to conduct this interview with Ms. Senn. So let’s jump right into it!

Cash Kid: Welcome to the show Ms. Senn. And first off, tell us a little bit about yourself.

Amanda Senn: Thank you, Cash Kid. I'm glad to be here. My name is Amanda Senn, and I've been with the Alabama Securities Commission for almost 16 years. Interesting fact, I started as an intern and worked my way up, became general counsel, deputy director enforcement and then last year, succeeded at the long time director,Joe Borg, as the director of this agency.

Cash Kid: Yep, that's really interesting. So, what is a securities commission and why do we need it?

Amanda Senn: So, a security is more than just a stock, a bond, a debenture. There are a laundry list of things that are covered, but it's essentially anything with a view toward an investment. So, you don't actually have to have a writing.

But, our agency enforces laws that, um, directly impact. People who sell securities and Those products that are considered securities. We also serve as a resource to our financial industry in the state. Oftentimes some of the smaller businesses don't always have the tremendous amount of resources that the larger firms have.

So we're in a unique position to be able to collect information from across the United States and provide it to our industry folks to let them know what's going on and hopefully keep them apprised of all the trends that are coming out in the financial industry. So can you explain how you advocate for investor protections?

Why do, why do we need this protection? Just to be clear, there are two securities regulatory bodies, the Federal Securities Exchange Commission and then the State Securities Commissions. The State Securities Commission, our office here, does have some dual oversight with the federal government, but we are exclusively responsible for certain investment advisor And we retain, um, fraud authority so we can prosecute any cases where we have some crook that comes into our state.

Because I'm certain none of our Alabama residents are crooks. They come into our state and, um, and represent, um, That, you know, we have this typically what we'll see. So we have this great investment opportunity and, um, it's going to grow jobs in the state and we need investor capital and I'll put it with my, um, you know, business model and my plan and we'll help grow this industry.

What happens in a criminal case is they take the money and they don't do what they told the investor they would do with it. They instead funnel it into personal expenses. Sometimes these crooks buy houses, cars, diamond rings for their girlfriends. It's not always a guy though. Sometimes we have female crooks, but they will just take money and, and steal it.

So. Um, so investor protection, and I circle back to your question, we make sure that the people that raise money in this state are those that are trustworthy, honest, that they do what they're going to say, what they represent to investors that they'll do with the money. They don't have criminal backgrounds where they would be inclined to steal money again.

And we also educate the public about financial frauds. Since we receive reports from financial institutions across the state, and members of the public, we're in a unique position to be able to see all the types of scams and frauds that are out there. And so we go into the communities and share this with people.

We tell them, Hey, look, we've seen this scam. It's an IRS scam or that text message that you're getting regularly. It's not real. So we get out and we share what we see with the community and we serve as a resource to all residents, even across the United States. We have people calling and asking questions about different things.

Cash Kid: Yeah, that's really interesting and, uh, it's definitely helpful for the listeners here watching, so thank you for that. And, um, what are some real world examples you can share of the impact your work has on everyday citizens?

Amanda Senn: In 2016, our legislature, um, we worked with them to pass a law that required our financial institutions to report suspected scams and financial exploitation because we were seeing millions of dollars being lost to fraudsters.

And many of them were overseas on behalf of our seniors. So we would notice, you know, people filing reports for, um, 70 year old miss Jones, who had recently been widowed and some crook, you know, wormed his way into her life and convinced her that she needed to. Invest money in his project, or she might run out of money to live out her golden days.

We started seeing reports like that. The financial institutions wanted to partner with us. They wanted to report this, but there were certain privacy laws that they were concerned about. And so now we gave them a law, a mechanism to report. So, we get the reports in from across the state and we're able to immediately pick up the phone and help a lot of these victims and clients of, um, financial institutions to know that they don't need to send money overseas or they don't need to respond to this, that it's a scam.

So, just by way of example, this Friday before Memorial Day, At three o'clock this afternoon, that afternoon, I received a call from a resident in a western, western part of the state of Alabama. And she said, my father is continuing to give money over. I know it's a scam. It's a title, um, title car issue. And I've seen this before.

And I said, yes, there is a title scam going around the state. We've got reports. And so we were able to, Contact her father, 91 years old, and tell him that this is just a scam. Don't send money. So being able to have that knowledge from our industry to help directly help residents before and the members of the public before they send money over And to prevent them from losing money to fraud is hugely impactful.

So that's, you know, one of the areas where we can act immediately. Um, and we can also act pretty quickly on criminal cases, so if we know that fraudsters are in the process of transferring You know, hundreds of thousands, sometimes millions of dollars. We have legal processes in place to freeze that money sometimes and get it back into the hands of the honest investors that, you know, just trusted someone to be able to prosper parts of the state or a business around here.

Cash Kid: Right. That, uh, it's really cool how you've been able to help save people from losing money. Thanks, Cashkid. You're welcome. Um, how has the speed and spread of technology, especially with young people having more access, affect the work of the Securities Commission?

Amanda Senn: I'm so glad you asked about this because this is where I think you and your listeners can really help us out.

Technology moves faster than any law enforcement agency or regulatory body can move. There's so much that kids have access to through cell phones and internet. Um, I know, you know, social media is a big area and while You're not technically old enough to open an investment account. A lot of kids we've seen will share personal information online.

So we encourage kids to be careful about sharing personal information because once a fraudster can get that, even if it's yours, they can sometimes access your parents accounts. Family members accounts, cell phone numbers. So I tell folks, don't, you know, don't share your personal information online. And then for you guys, because you're pretty tech savvy and I wasn't raised with a cell phone and the internet did not come out, um, until I was older, but we, In our office, I've discussed a program where kids can help their parents and grandparents.

And I know there are some really tech savvy grandparents out there. I've met them. They've shown me privacy settings on my phone that I wasn't aware of. I try to stay on top of that. But, y'all help your parents and grandparents get those privacy settings taken care of. Because so often we receive phone calls from seniors in the state and they, The fraud could have been prevented if they just turned one control on or allowed only contacts in their phone to be callers.

They didn't realize they could block certain scam calls. And so a lot of that can be avoided. And, you know, I encourage your listeners to help us with that. There are opportunities for you guys. To go ahead and expose yourself to concepts like savings and investings, um, speaking of technology in, um, a pretty safe environment.

So I think green light, I don't, I'm not endorsing, yeah, any particular application, but I know. We've received good information about that company. Uh, and so I always encourage everyone to become familiar with the principles of investing and saving and understanding the different types of checking accounts and savings accounts.

And what, you know, what's a mutual fund, what's a money market account, because as you get older, those principles will. Help you understand that certain things are not real and it'll give you context for what's legit and what's not and there's so many cases in that we see in our office that if the individuals had the experience of being able to Understand savings and investing concepts they would have known that this guy was just a fraudster And it could have helped prevent a lot of fraud And we see it also in other areas where, you know, they may not have had exposure because of parents.

They didn't teach them savings and investing principles, or if they understood that it could help break a cycle of poverty too. So there are lots of reasons to do that. So I know that's your mission. And I just want to emphasize and echo that exposing yourself to these principles and The activity of saving and investing and understanding all the principles that go along with finance at a young age will pay dividends.

And I'm here to tell you because we see what happens when kids don't understand.

Cash Kid: Um, so what are dangers that us kids should be aware of when maybe it comes to a scam or threats?

Amanda Senn: We see, Kids that will fall victim to fake websites. I know I had a phone call a few weeks ago with somebody tried to buy a purse and it looked a little too good to be true.

And it turns out the website was fraudulent, but it's so hard to tell because it was so beautifully designed and it had all the features of a legitimate website. But what I told her, I said, you need to Google the name of the company before you. Begin transacting business or buy anything because oftentimes it won't even come up as a legit company.

So do your homework because once your personal information is out there, like I said, even if you don't have a lot of assets at this point in your life saved up, they can sometimes use your information to get into your parents or grandparents accounts as well. So kids need to be more vigilant online, especially since you're spending a lot more time online.

you know, your parents did when they were growing up and be careful on apps as well. We had an initiative, um, and I hope to get our interns back on it this summer, but we started investigating fraudulent apps as well. So we gave all of them cell phones and we picked up dozens and dozens of fraudulent apps.

So always be careful and make sure that the. The app that you're using is, you know, verified. I know your office promotes financial literacy to all citizens and students in Alabama.

Cash Kid: What are some ways your office promotes financial literacy? And do you feel we could have more financial literacy offered in our schools?

Yes, absolutely. And our legislature and our governor felt the same. So two years ago, we passed the Financial Literacy Act. And I brought a copy here. It's just a piece of legislation. And it became effective this year. So For students going into high school, they are now required, because for a long time, there was, there were no requirements.

You know, we took economics on and shop and things like that, but now it's mandatory. And, um, so, in high school, they'll need to learn principles like balancing a checking account, evaluating types of loans. What is an insurance policy? The different types of insurance policies, understanding percentages as it relates to taxation, savings and investing in simple contracts.

So we're so thankful that our, our legislature, you know, enacted this and our governor signed off on it. So we'll have a mandatory one credit hour. And, and even if it's just one, we hope that it'll inspire students to go out and learn more. Um, so our office does provide, I mentioned the community outreach events.

We have events that focus on Um, you know, kids saving and investing. And we go through basic principles and we have programs for, um, women. Sometimes we, women find themselves that they're living alone, raising children. Um, they didn't always feel as confident. Studies showed as men in. Saving and investing in finance.

And so we wanted women to have financial confidence moving forward. So we have a program for them. We have them for college students as they're considering going out into the workforce, um, and taking out student loans. And so. We, you know, have programs designed for different groups across the state, and we're always happy to put together something if some of your listeners would like a financial education program or a fraud prevention program, we can put those together, too.

So we're just here to serve the public, and we want everybody to be financially savvy, and this is why you're so important. I'm so glad that you're taking an interest in this because Half of our caseload or more would go away if people had the knowledge and information that we've been exposed to here.

Cash Kid: Um, what are your thoughts on the Cash Kid Podcast and the mission we are on to educate the next generation to be the savviest and educated financially?

Amanda Senn: I think Cash Kid Podcast is number one. And I'm just thrilled that you're out here creating awareness about these issues and they're so important.

Especially now in our country is facing trillions of dollars of debt, inflation. You couldn't be more timely and I was so excited to hear that you were offering this podcast and, um, I know my colleagues and I, we just don't have time to read anymore. So we listened to podcast and I've pulled most of the important information that has served me well in this organization from a podcast.

So what do I think, what do I give cash kid? An A plus for sure. And so, um, because Knowledge is power. I don't sound cliche, but the more, you know, the more you understand and the more successful you can be in life. And, and I just want to tell people, look, if you guys would not go out and buy this crazy purse or video game or whatever and save your money, you could see that putting it in a savings account, especially right now that could earn more interest in You could grow this and eventually not have to worry about how you'll make a down payment on a house.

And I know you say, Oh gosh, I'm so young right now. It's just seems like such a distant future, but it will come up faster than, you know, and you'll be so thankful that you have a savings account, you know, and you able, you're able to take this money and make it work for you.

Cash Kid: Just so you guys know that was not scripted.

Amanda Senn: Yes. Don't go like that. Not at all.

Cash Kid: So is there anything we haven't asked you that you'd like to share with our audience?

Amanda Senn: I feel like I've rambled on and on, but it just bears repeating always to encourage your listeners. Please, please, please, please, please do all they can to understand the principles of finance, savings and investing, how to recognize fraud, because if we can get this generation coming up to be financially savvy, I mean, our entire world may change. We may fix the inflation problem. You guys could have the person that will solve our nation's economic issues. You just don't know who will come up out of this bunch and, and be able to, to turn the country around in terms of, um, you know, the amount of spending that's going on and the weird things that are happening in our markets.

So anything else I'd like to add that the Alabama Securities Commission is available. We take calls from across the United States, not just Alabamians, but, um, I get calls from all over to ask about a company here or, um, just generally about a type of fraud that we see nationally. Our office is serving as the enforcement chair for a national association right now.

So we are working with other states, Canada and Mexico, on several. like multi jurisdictional frauds. Cryptocurrency has been a big push. I know we didn't talk about that, but we have episodes on that. Yeah, cryptocurrency. We have several cases right now open on companies and so that'll be an interesting, um, you know, next chapter in the financial world.

Cash Kid: Yeah. Ms. Senn, we appreciate your time and expertise. Thank you for joining us on the CashKid podcast and boosting the financial knowledge of fellow CashKids everywhere. Remember. Anyone can be a cash kid, just have to learn how to become one. Cash Kid, out.

Disclaimer: The information presented represents the views and opinions of the guest. This podcast does not intend to provide personal investment advice. This content has been made for informational and educational purposes only. To make a full and informed investment decision, we advise you to speak with a financial advisor and for kids.

Definitely your parents first before investing.