Are marijuana, binary options and digital currency the flavors of the month for U.S. state securities regulators? You might think so based on warnings issued by Washington and Colorado state officials and reported as such by local media.
Recently, CCN.com reported the Washington Department of Financial Institutions issued an alert warning consumers about investing in marijuana, binary options and digital currencies. The News Tribune in Tacoma, Wash. reported this alert, warning consumers against becoming victims of “the next big thing.”
Later in the day, I noticed the Colorado Securities Commissioner issued the same warning using similar wording. In this case, the Denver Business Journal reported the alert.
The alerts on both states’ websites introduce the subject noting that “at first glance, these three products appear to have nothing in common with each other, but what they have in common is their recent emergence as three investments that both sellers and buyers hope will become the next ‘big thing.’”
Both alerts go into more detail about marijuana and binary options investments than digital currency, leaving bitcoin and digital currency for last and providing a much more superficial overview.
That the two state alerts used similar wording about three unrelated investments leads one to believe they came from the same source. Upon investigation, this appears to be the case. Yet neither alert nor the respective media news stories identifies the original source.
I was able to find what appears to be the original press release on the website of the North American Securities Administrators Association, an organization that provides alerts and advisories.
The Colorado Division of Securities notes at the end of its alert that it belongs to this association. So there is some degree of disclosure here, however little, which never made it into the Denver Business Journal.
So what, you ask?
Securities and investment watchdogs have an important responsibility warning consumers about scams. In doing so, they should disclose their sources. These state officials may have valid concerns about marijuana, binary options and digital currency, but full disclosure was not provided. Washington and Colorado officials lead the public to believe that they themselves identified the potential scams.
I emailed both the News Tribune and Denver Business Journal reporters reminding them that their readers have a right to know the real sources of the information they report. Both news stories gave undeserved credit to state government officials.
Investment scams deserve fuller attention from government watchdogs and media outlets than “canned” news.
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