Nov. 30, 2007                                                         Contact:Lucas Hamilton


  • State Auditor permanently bans Arizona man from Montana securities industry; levies over $172,000 in fines and restitution for defrauding Helena woman in ETrade Scam
  • Montana State Auditor John Morrison announced the recent settlement of an agency administrative action against James A. Andrews and InvestX, Inc., both from Arizona. In its Notice of Proposed Agency Disciplinary Action issued on April 25, 2007, the Securities Department of the State Auditor’s Office alleged Andrews and his company, InvestX, Inc. defrauded a Helena woman when he convinced her to open an ETrade account and deposit $20,000. He then took control of her account, deposited his own personal “not sufficient funds” checks to her account, purchased over 10,500 options in the account and ultimately caused her to lose nearly $300,000 due to the alleged fraudulent activities.
  • “The victim didn’t see this coming. She invested $20,000 expecting to make a small profit but instead, ended up owing ETrade over a quarter-million dollars,” Morrison said. “It is a credit to E*Trade that once the fraudulent activity was identified, it assisted the agency in its investigation and ultimate resolution. I am pleased we were able to get such a positive result in this matter.”
  • In the Consent Agreement and Order, Andrews and InvestX, Inc. have agreed to pay $147,252.90 in restitution in monthly payments of $818.72 over a period of 15 years and pay a fine of $25,000.00. The State Auditor also permanently banned Andrews from applying as a securities salesperson or investment adviser representative in Montana. In addition to the settlement agreement with Andrews, ETrade, as a good corporate citizen, has agreed to write-off $147,252.90 of the debit balance resulting from Andrews’ alleged fraudulent activities.
      "Montanans should carefully research potential investments," said Morrison. "It is important that consumers confirm whether the person marketing the offering is licensed to sell such a product and whether the product is registered with the Montana State Auditor’s Office. Be sure to do your homework before you invest."
      Morrison reminds consumers that any suspected securities or insurance fraud should be reported to the Montana State Auditor’s Office at 406-444-2040 or statewide, toll-free at 1-800-332-6148.