This is your Nov. 2, 2011 edition of the Texas State Securities Board Bulletin, a biweekly roundup of regulatory news and investor education tips. The Web version of this Bulletin and past issues are available at http://www.ssb.state.tx.us/News/index.php.

The State Securities Board registers securities offered or sold in Texas; oversees the firms and individuals selling securities or providing investment advice; enforces the Securities Act through criminal, civil and administrative actions; and provides investor education presentations and material. For more information, please contact Robert Elder, Communications, at 512-305-8386 or relder@ssb.state.tx.us.

It's another trip along Indictment Row for Richard M. Plato. The three-time convicted felon, disbarred lawyer, and accused oil-and-gas scammer was hit with an indictment on Oct. 25 that includes charges of mail and wire fraud and securities fraud. Also charged were a business partner, Michael Derek Walker, and Tammy Renee Norris, described in the indictment as Plato's "long-time mistress." Plato, through his Baytown-based Momentum Production Corp., allegedly sold promissory notes that were purportedly backed by the company's interest in oil and gas leases. Plato and his co-defendants raised more than $5 million from at least 40 investors. According to the indictment, Plato diverted investors' money to pay personal expenses for himself, his wife, his brother and mistresses (plural). He also failed to tell investors that Momentum was $1 million in debt when it started issuing the notes. And Plato failed to tell investors of his criminal convictions, all on federal fraud-related charges, and the $30 million in restitution he owes as a result of those convictions.

Plato was originally indicted in April. The superseding indictment issued Oct. 25 added the two new defendants, Walker and Norris. The State Securities Board is working with the U.S. Postal Inspector's office and the Office of the U.S. Attorney for the Southern District, which is prosecuting the Momentum defendants.

Securities Commissioner Benette L. Zivley has revoked the state registration of Brian Anthony Bjork, a Houston investment adviser representative, and his firm, Select Asset Management LLC. Bjork and his firm were closely affiliated with the J. David Financial Group of Friendswood, which is under SEC investigation and under the control of a federal court-appointed receiver. David Salinas, founder of the firm, committed suicide in his Friendswood home in July. The SEC has accused the J. David firm of selling investors $39 million in non-existent corporate bonds. The State Securities Board's revocation order against Bjork found that he and his firm knowingly sold the non-existent bonds through Salinas' firm. The Securities Commissioner's orders also found that Bjork and Select Asset Management recommended and sold their clients interests in private investment funds without disclosing that the money would be improperly commingled and used to make unauthorized loans.

The stock market's volatile ride from 2005 to 2009 has stalled the growth in the percentage of people who own 401(k) and IRA retirement plans, according to a recent report by the nonprofit, nonpartisan Employee Benefit Research Institute. That five-year period, it should be noted, included a 38% decline in the S&P 500 in 2008 alone. Ownership of retirement plans grew sharply in the 1990s right up until 2005, when 33.1% of workers ages 21-64 participated in a 401(k)-type plan. In 2009, virtually the same percentage – 33% -- participated in the plans.

Ownership of IRAs reached 22.9% by the end of 2005 among workers ages 21-64, but declined to 20.8% at the end of 2009. Not surprisingly, among families with income of $75,000 or more, 31.5% owned an IRA. Among families earning up to $20,000, just 7.2% owned an IRA. Regardless of the type of retirement plan, participation increased in line with the level of education and age. For example, 4% of workers ages 21-64 owned an IRA in 2009.