Enforcement Actions

The North Dakota Insurance & Securities Department has announced a regulatory update aimed at strengthening protections for investors as more residents participate in private funds and alternative investments. The update aligns North Dakota’s securities oversight with nationally recognized standards by adopting the NASAA Model Rule for Investment Advisers to Private Funds and rescinding a prior state-specific approach. This change reduces regulatory complexity while improving transparency, fraud prevention, and consistency with federal and multi-state frameworks. The Order enhances safeguards for higher-risk investments by limiting participation to financially sophisticated investors and requiring disclosures and audited financial statements. Officials say the update modernizes oversight without limiting legitimate investment activity and takes effect immediately.

North Dakota Insurance Commissioner Jon Godfread has issued a Stop Order against EPIC Management, LLC and its executive officer, Todd Berning. The order requires them to immediately stop offering or selling membership interests in the company. This action was taken to protect investors from potentially unlawful or unregistered securities activity. The Commissioner emphasized the importance of safeguarding consumers and maintaining trust in the state’s financial markets.

The North Dakota Securities Department announced that it joined a taskforce of state securities regulators and the U.S. Securities and Exchange Commission (SEC) in a $106 million settlement with Vanguard Marketing Corporation (VMC) and The Vanguard Group Inc. (Vanguard) for failing to supervise certain registered persons and failing to disclose potential tax consequences to investors following a change in investment minimums for certain target date retirement funds.

The North Dakota Securities Department, a member of the North American Securities Administrators Association (NASAA), has joined a $17 million settlement with Edward D. Jones & Co., L.P. (Edward Jones) resulting from an investigation into the broker-dealer’s supervision of customers paying front-load commissions for Class A mutual fund shares.