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“It’s really heartbreaking when you talk to people who become victims,” she said during a speech Monday in San Diego. “This is about getting information out for people to arm themselves, because it’s really hard to get money back for victims in fraud cases. So it’s better if we can stop it from happening in the first place.”
The idea, she said, is to create a one-stop site for investors to vet anybody pitching financial services. It could also flag possible repeat offenders for law enforcement officers investigating potential crimes. Americans reported losing $3.8 billion in 2022 to investment scams, the largest category of consumer fraud, according to the Federal Trade Commission.
Goldsmith Romero said the explosion in cryptocurrency-based scams in recent years inspired the proposal. The Securities and Exchange Commission alone has brought 158 crypto-related enforcement actions as of Sept. 7, according to data from Cornerstone Government Affairs. And the CFTC has brought 115 crypto-related enforcement actions, she said.
The registry concept revives a proposal she first floated in 2019, when she served as special inspector general with the Troubled Asset Relief Program, investigating crimes at companies that received taxpayer bailouts during the 2008-2009 global financial crisis. After that office created its own public database compiling wrongdoing it uncovered, Goldsmith Romero proposed a broader version pulling together results from across the federal government.
The proposal failed to gain traction at the time. Goldsmith Romero reintroduced Monday at the North American Securities Administrators Association meeting, which draws local financial regulators from across North America.
“This would be a comprehensive record that the public can easily check before giving someone their money, their trust, and their business,” she said, according to her prepared remarks. “The public does not care which agency prosecutes the fraud. They don’t want to have to search all corners of the internet.”
Goldsmith Romero did not suggest a home for the registry. The Justice Department, an obvious candidate, did not immediately respond to a request for comment. The commissioner said she will circulate the idea on Capitol Hill, among federal agencies and with outside groups to solicit feedback.
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