June 13, 2011
2011 Marks a Century of State Securities Regulation
Back in March, the North American Securities Administrators Association (NASAA) joined state regulators around the country in observing the first state securities law, in Kansas, which went into effect on March 10, 1911. According to the association:
The most recent NASAA statistics show that in 2009, state securities regulators collectively initiated nearly 2,300 enforcement actions, which led to more than $4.7 billion ordered returned to defrauded investors and 1,786 years in jail for convicted con artists. State securities regulators also conducted more than 1,800 investor education presentations nationwide.
In my limited experience, state sercurites regulators, at least here in North Dakota, seem to have a stronger focus on protecting investors than they do proving they are protecting investors. That is, they seem to have their priorities right on who and what to pursue in fraud cases. Perhaps that is because of the people in charge or because they have more limited resources, but it raises some interesting questions about exactly how enforcement should be handled and at what level.
This look back at the Kansas statute reminds me of a helpful (and aptly named) piece on the history of blue sky laws from Jonathan R. Macey & Geoffrey P. Miller, Origin of the Blue Sky Laws, 70 Tex. L. Rev. 347 (1991). The article is availble in PDF via the Faculty Scholarship Series. Paper 1641. http://digitalcommons.law.yale.edu/fss_papers/1641
In case you still want more on this, you should know, "NASAA plans to celebrate the centennial of state securities regulation at its annual conference, September 11-13, 2011 in Wichita, Kansas."
The aftermath of the the 2008 crisis proves, among other things, how important ALL parts of our securities regulation apparatus- including private plaintiff's attorneys and state securities regulators- are to protecting investors.
Were it not for the plaintiff's attorneys and state regulators, the "elite" individuals and institutions collectively guilty of causing the largest financial fraud in human history would have gotten away completely free because of deliberate decisions by the Bush and Obama administrations to not investigate or prosecute them.
The investigations and legal actions of the states and the plaintiff's bar saved the day.
Posted by: James | Jun 13, 2011 10:05:01 AM