Edmond Waters was appointed in February by Gov. Asa Hutchinson to succeed Heath Abshure as commissioner of the Arkansas Securities Department.
Waters is a native of Helena-West Helena (Phillips County) and a graduate of the University of Arkansas at Little Rock. He was formerly a vice president with A.G. Edwards & Sons and served as a financial adviser and branch manager in Florida.
How has your background prepared you for the job of state securities commissioner?
I spent 21 years as a broker-dealer agent and 14 years as an investment adviser with a large retail brokerage firm. For the past 16 years, I was also in branch management for the firm. As a branch manager, part of my job was to be sure we were in compliance with the many regulations of the industry. I had to have a broad knowledge of the types of things that we deal with at the Arkansas Securities Department. However, more important, I learned to manage people. I found that when you treat people the way you want to be treated, it makes for a happier, more productive work environment.
Are there specific issues that your office will focus on now that you are commissioner?
The staff will continue to put an emphasis on close scrutiny of the registration of securities and those who sell investments or provide investment advice. Denying the bad actors before they are allowed to do business in Arkansas protects the financial interests of investors before harm can occur. Additionally, the preventive measures allow the financial professionals who do good business to succeed and provide a service to this state.
What are the most common consumer complaints that ASD receives? What services can your staff provide?
Out-of-state brokers cold calling Arkansas residents to sell stocks is one of the most common complaints. The brokers often have high-pressure selling tactics and promote risky stocks or trading strategies.
Another issue is agents and representatives recommending the sale of illiquid investments to senior citizens concerned about market risks and low interest rates being earned on certificates of deposit. The illiquid investments, such as annuities and REITs, may not be suitable investments based upon the investment objectives, risk tolerance and time horizon of the investors. Staff can assist investors who have complaints about their investment professionals who may have violated regulations. I encourage investors to call the department if they need assistance.
We are seeing a lot of “crowdfunding” initiatives inside and outside the state. Are any of these investment vehicles regulated by the ASD? Is your office receiving any complaints, or do you think investors understand the risks and rewards of crowdfunding?
The staff has received a limited number of calls from companies that are interested in raising capital using crowdfunding and investors wanting to participate in crowdfunding offerings. Crowdfunding is not currently available in Arkansas. The staff is working on proposed rules to issue later this year that will allow crowdfunding in an intrastate offering. The proposed rules must balance the rewards of capital formation and possible job growth with appropriate investor protection measures. Investors probably do not fully understand the risks and rewards of crowdfunding. The investor education programs and presentations by the staff are intended to help educate investors and ensure that Arkansans are prepared for retirement.
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