Investment Law – Leslators, Attorney General Unveil Legislation to Strengthen Florida Investor Laws

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~ New law would broaden the states ability to pursue securities fraud ~

TALLAHASSEE, FL Attorney General Bill McCollum today joined Senator Garrett Richter and Representative Tom Grady to unveil a legislative proposal to strengthen Floridas laws protecting securities investors. The legislation would broaden state authorities ability to investigate and pursue securities fraud and enhance the registration requirements for investment advisors, dealers and other personnel. The proposed legislation will also allow the Attorney General to participate in civil investigations with the approval of the Office of Financial Regulation.

Recent headlines and alleged fraud have clearly identified the need to have an all hands on deck approach when helping protect Floridians and their investments, said Attorney General McCollum. I appreciate the legislative leadership on this initiative.

The legislation enhances the Office of Financial Regulations (OFR) enforcement powers by authorizing the emergency suspension of persons and firms for failure to provide financial books and records to OFR and by allowing the adoption of sanction guidelines for registrants who violate the Florida Securities and Investor Protection Act. These enhanced capabilities plus the Attorney Generals ability to engage in civil investigations will help prevent and discourage future bad acts by a financial advisor or firm.

Rep. Tom Grady (R- Naples), a securities attorney and expert in securities regulation, drafted the bill and is sponsoring it in the House. In order to have a strong economy, investors must have confidence in the market. By increasing the tools available to the state to prosecute violators of our securities laws, we protect investors and foster needed trust in the system, stated Representative Grady.

Sen. Garrett Richter (R- Naples), a banker and chair of the Senate Banking & Insurance Committee, is sponsoring the bill in the Senate. The integrity of our markets is critical to building a strong economy. This legislation will reinforce our regulatory system and bolster investor trust, said Senator Richter.

The legislation will also allow the Office of Financial Regulation to increase the penalties for violators of the Florida Securities and Investor Protection Act, which may include suspending or permanently barring violators from continuing to operate in Florida. It will also strengthen the licensure registration process by providing additional grounds for denial of a registration, including imposing disqualifying periods for persons who have been convicted of certain crimes.

“There is a need to reinforce our regulatory framework. The proposed legislation will provide the Office with the means to take swift action against violators, said Alex Hager, Interim Commissioner of the Office of Financial Regulation.

Earlier this week, the Securities and Exchange Commission announced that former financial advisor Bernard Madoff agreed to a proposed partial judgment in a civil case brought against him by the Commission. Madoff also faces criminal charges in the United States District Court in Manhattan relating to allegations that he bilked investigators out of over $50 billion in a Ponzi scheme. Thousands of Floridians reportedly fell victim to Madoffs investment schemes, many of whom included senior citizens and charities in South Florida.

AARP welcomes these important efforts by Sen. Richter, Rep. Grady and Attorney General McCollum to crack down on these fraud artists, said Jack McRay, Advocacy Manager for AARP Florida state office. Even one criminal fraudster can wreak havoc on countless older Floridians’ security, destroying many lifetimes worth of hard work and prudent saving.

The legislation, which is Senate Bill 1126 and House Bill 483, is expected to be heard during the 2009 Legislative Session.

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