Securities Commissioner Eric Munson Bucks Fraud Trends

Securities Commissioner Eric Munson Bucks Fraud Trends
Eric Munson, commissioner of the Arkansas Securities Department
Before taking over the Arkansas Securities Department in May, Eric Munson was executive director of the Governor’s Council on Developmental Disabilities. He started his career as an investment banker at Stephens Inc., then served as a financial adviser at Morgan Stanley-Smith Barney,  and was senior vice president and director of legislation and regulation at the Arkansas Bankers Association.
A Little Rock native, he was state director of the National Federation of Independent Business of Arkansas, and a regional advocate for the U.S. Small Business Administration’s Region VI. He is a graduate of the University of Arkansas at Fayetteville and Catholic High School in Little Rock.

Could you briefly describe the role of the Arkansas Securities Department?

The primary role is to protect investors. As commissioner, I am an advocate for Arkansas investors. You cannot raise capital without investors. Markets do not function without investors. And people do not invest unless they know their money is protected. The department works to provide that oversight through its licensing of industry professionals, regulation of securities offerings and enforcement of securities laws.

What are the department’s priorities, and where does investor education fit in as the state faces a wave of fraud?

Investor education is a top priority for the department because an informed investor is a successful investor. Studies show that only one-third of Arkansans can correctly answer four to five questions regarding financial literacy. We must improve these numbers, starting with children and working to educate all populations. The department’s Investor Education Program provides resources from middle school to retirement, and tips are available in the Investor Education section of the department’s website.

Another priority that is personal to me is protecting our seniors. My own mother is 80, and while she’s still sharp as a tack, I have witnessed how vulnerable she is to some of the more modern scams through social media, robocalls and email. Criminals have perfected ways of preying on people’s hopes or fears.

What trends are being seen in the areas the department regulates — securities, mortgage companies, etc.?

Cryptocurrency is a trend that is not going away. We are addressing these products both through our regulation of securities and money services. While not every cryptocurrency-related investment offer is a fraud, it is important for individuals and firms selling these products to understand that securities laws or regulations may apply to these sales.

It is our job to ensure that regulatory and compliance measures are in place to protect Arkansans. The CARES Act passed in response to the COVID-19 pandemic allows investors to gain access to up to $100,000 of their retirement savings. Some bad actors have used these benefits to encourage investors to take money from their 401(k)s or traditional IRAs, not for current emergency financial needs, but to buy investments (often riskier ones).

Through our regulation of mortgage companies, we have seen Arkansans refinancing and purchasing new homes at unprecedented rates. But we are sensitive to the fact that many Arkansans are struggling, and we are supporting our non-depository servicers so that they can assist consumers with forbearance or modified payments.

Failures can offer even deeper lessons than success. Can you describe a mistake you’ve made, and its lessons?

Failures are a part of life. But having a positive attitude and optimistic outlook is a choice. In my professional career I have taken some lessons from sports. I have been knocked down but always gotten back up, and tried again. To me, it really is all about how many times we are willing to get back up.