Apart from a significant increase in enforcement actions against investment adviser firms last year, which accounted for 15% of all enforcement actions handled by state securities regulators, NASAA also reported a sharp rise in prison time for securities law violators.
Overall, state securities regulators conducted 6,121 investigations in 2011, which led to 2,602 criminal, administrative and civil enforcement actions. Financial abuse by seniors was identified in nearly 600 enforcement actions reported.
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Prison time resulting from state-initiated actions totaled 1,662 years, up 47% from an year ago.
The state securities regulators also took important investor protection actions by removing or barring unscrupulous brokers and investment advisers from the licensed community. In 2011, around 2,800 licenses were withdrawn due to state action, which is up 7.7% from an year ago. And,774 licenses were denied, revoked, suspended or conditioned, which is up 20% from the previous year.
"The report demonstrates that investors continue to rely upon state securities regulators. Enforcement remains one of our most fundamental responsibilities, if for no other reason, because no other regulator is going to act to protect hometown investors," Heath Abshure, NASAA president and Arkansas Securities commissioner, said.
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By GlobalData
