In recent years licensed insurance agents nationwide have been recruited by promoters of illegal schemes to sell unregistered investment products to the public in Texas and elsewhere. These products have included promissory notes issued or guaranteed by offshore entities, brokered certificates of deposit, contracts for the sale and leaseback of telephone and ATM equipment, and resort "timeshare" investments. Typically these schemes have been directed at senior citizens.

As a result, criminal and civil enforcement actions have been taken by state and federal regulators against those who have sold these products. In Texas such actions have included criminal prosecution of agents licensed or formerly licensed with the Texas Department of Insurance.

As under the federal securities law, the Texas Securities Act defines the term "security" broadly to encompass virtually any instrument that might be sold as an investment. The law requires that securities and persons offering securities for sale in Texas must be registered with the Securities Commissioner unless a specific exemption from registration applies. It is a third degree felony for a person to violate a registration requirement.

The Texas State Securities Board joins with the Texas Department of Insurance in urging insurance professionals in Texas to protect themselves, their business reputation, and their clients by checking first with the Texas State Securities Board, before offering any unregistered investment product to the public in Texas. Call (512) 305-8392 for more information.