During the Cold War, America’s demand for uranium drove Utahns’ demand for uranium stocks, leading to a “feeding frenzy” that prompted the U.S. Securities and Exchange Commission (SEC) to open its first office in Salt Lake City in 1954. This move was in response to unscrupulous uranium stock brokers operating in the state.
Fast forward to today, the SEC has announced the closure of its Utah outpost later this year. This decision will shift federal securities cases for the state to be handled out of Denver. The closure comes after a mix of successes and failures for the Salt Lake office, including a recent settlement with The Church of Jesus Christ of Latter-day Saints in connection with its investments, as well as a failed case against cryptocurrency company DEBT Box.
From uranium mining in the 1950s to cryptocurrency mining today, Utah has seen its fair share of schemes that have kept the SEC’s Salt Lake office busy. These include selling uranium stocks on street corners, promoting silver investments without any actual silver, and even a beaver ranching scam that left investors in a disastrous situation.
In the 1970s, defunct mining companies in Utah were resurrected for new schemes, earning Salt Lake City the title of the “shell capital of the world.” This era also saw the rise of penny stocks, with Salt Lake City and Denver being the birthplace of the penny stock boom.
Over the years, the SEC’s Salt Lake office has dealt with various fraud cases, from Ponzi schemes to affinity fraud targeting trusting members of the LDS Church. More recently, the office has been involved in prosecuting alleged cryptocurrency fraud, including the flawed case against DEBT Box and a case that led to SafeMoon, a Utah-based cryptocurrency company, filing for bankruptcy.
The recent closure of the SEC’s Salt Lake office comes after a period of attrition, with key attorneys resigning and the office director leaving in May. Despite its closure, the office leaves behind a legacy of tackling fraud in Utah and handling a variety of securities cases over the years.