U.S. state regulators issued more than $1B in sanctions last year

By James Langton | September 10, 2019 | Last updated on September 10, 2019
2 min read
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U.S. state securities regulators generated more than US$1 billion in monetary sanctions and over 1,000 years in prison sentences last year, according to the latest annual enforcement report from the North American Securities Administrators Association (NASAA).

The group of state and provincial regulators issued a report Tuesday detailing the collective enforcement actions of its state members in 2018.

Among other things, the report indicates that state regulators carried out 2,067 total enforcement actions, which produced more than US$558 million worth of investor restitution, US$490 million in fines, and 1,753 years of “criminal relief,” including prison time (over 1,000 years) and probation (over 700 years).

The regulators’ enforcement activities were split roughly evenly between cases involving registered firms and people, and cases with unregistered defendants.

Investment adviser firms were the state regulators’ top targets in 2018, accounting for 17% of their enforcement action, up from just 9% back in 2014.

NASAA’s report also indicates that, so far, 23 states have enacted rules or legislation based on its model rules that aim to help the financial industry protect vulnerable investors by enabling them to more easily report suspected financial exploitation.

Among the states with these sorts of laws, NASAA reports that 14 of them say they received 426 reports of suspected exploitation in 2018. These reports led to 81 investigations, 57 disbursement delays and 32 enforcement actions during the year.

“This report shows that NASAA members are on the frontlines of investor protection,” said Christopher Gerold, NASAA’s newly elected president and the chief of the New Jersey Bureau of Securities.

Gerold was elected to a one-year term at the group’s annual meeting in Austin, Tx., NASAA announced separately.

Its new board includes Kevin Hoyt, executive director of New Brunswick’s Financial and Consumer Services Commission, along with various U.S. regulators.

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James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.