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The Mississippi Securities Division is the closest regulator to the investing public of Mississippi.  Among other tasks, they protect investors from fraud and abuse and make sure those licensed securities professionals doing business in the state are in compliance with the necessary securities laws. Today, securities regulators face a quickly changing landscape of new technology, new rules and new challenges to the enforcement of state securities laws. Recently, Bradley attorney Jeffrey Blackwood sat down with Director of the Mississippi Securities Division Eric Slee to discuss these and other topics. 

Q: What are the priorities for the Securities Division for 2024?

A: As you know, the Securities Division is tasked with overseeing many things. We process the registration of products, licensing of persons, examinations, investigations, and investor education. We are making a concerted effort this year to make sure that more people know that. We want people to be more aware of the resources we have here in our office. This applies to both securities professionals and Mississippi investors. 

Q: Digital Assets continue to be an active area in the securities industry.  What is the focus of your office with regard to cryptocurrency and other digital assets?

A: Right now, our No. 1 focus with regards to cryptocurrency and other digital assets is investor protection. Many of the largest crypto exchanges and lending companies, such as Genesis, FTX, Celsius, BlockFi, and Voyager, have filed for bankruptcy in the past couple of years, and many Mississippians had money invested in these platforms. We are working hard to hold these platforms accountable and recover money for our investors when possible. Cryptocurrency and other digital assets are not inherently bad, but these markets are volatile, and fraudsters prey on investors who do not fully understand what they are investing in. Products tied to digital assets make up a large number of our cases and investigations. For securities professionals that offer investments in this space, proper disclosure of risk is key.

Q: Artificial Intelligence based applications are increasingly present in the securities industry.  What are your biggest concerns for AI technology being used by firms and advisors in Mississippi?

A: My concern about AI extends to its use outside of firms and advisors in Mississippi. I will echo the same thing I said about cryptocurrency and other digital assets in that it does not have to be inherently bad. However, it is a tool widely used by criminals in orchestrating sophisticated scams. I heard this quote at a conference I was at in January: “AI makes bad criminals good and good criminals great.” This can be scary but when used properly by firms and advisors there can be a great benefit to their business and even to investors. The problem is that AI is not always accurate, and there can be consequences when using it without proper due diligence.

Q: Have you seen a decrease in senior investor fraud as a result of regulatory focus on that problem?

A: Unfortunately, no. Pig butchering, romance, and affinity scams are the No. 1 threat to our senior investors. Criminals are taking advantage of new and emerging technologies through text messages and social media platforms to convince victims to invest with them. These scams are sophisticated and hard to detect until the harm is already done. When the money is transferred in these types of scams, it is extremely hard to get funds back for the victim.

Q: What messages do you have for firms and advisors doing business in Mississippi?

A: The Securities Division works to promote responsible capital formation in Mississippi. We want firms and advisors doing business in Mississippi to know we are here to help and that our goal is to foster good professional relationships with all those doing business in the securities industry. This allows us to be proactive in making sure our firms and advisors are doing everything they can to protect their clients. This is good for business and good for investors.