Corporate Governance

NASAA Testifies Before Senate Banking Committee

By Tamar Weinrib

Fred Joseph, President of the North of the American Securities Administrators Association, Inc. (NASAA), testified on March 26, 2009 before the Senate Banking Committee asking for increased authority over investment advisers and the general ability to address fraud in its earlier stages as part of financial regulatory reform legislation.  From the outset, Joseph stated that he intended to highlight recommendations that NASAA feels are most, vital to sound regulatory reform and strong investor protection.  Among other things, Joseph urged Congress to reject any attempts to preempt or otherwise restrict the role of state securities regulators.  In addition, he testified that because "we are the local cop on the beat, state securities regulators are often first to discover and investigate our nation?s largest frauds." In addition, the penalty and restitution part of enforcement efforts is higher when state and federal regulators work in tandem.  As such, NASAA requested that Congress reinstate state regulatory oversight of all Rule506 offerings by repealing Subsection 18(b)4(D) of the Securities Act of 1933.  NASAA also requested that the Senate Banking Committee broaden the states' regulatory and enforcement authority over investment advisors.  Joseph argued that this enhancement of state authority will deter all forms of abuse by the large investment advisers without interfering with the SEC?s exclusive authority to register and oversee the activities of the large investment advisers.  In today?s Madoff infected climate, where investors have already suffered many a beating, any action that seeks to oversee investment advisers, and detect and deter fraud is welcome. Click here for the transcript. 

Full post as published by PomTalk on March 30, 2009 (boomark / email).