Utah legislator targets online broker records

Enforcement actions - regardless of outcome - tough to scrub away

By Andrew Osterland

Dec 21, 2012 @ 1:21 pm (Updated 3:38 pm) EST

broker, online, enforcement

A Utah state senator is going to bat for investment brokers who have been the subject of enforcement actions by the state securities regulator and now say their reputations are suffering because the information is available online.

Sen. Howard Stephenson told The Salt Lake Tribune that constituents have complained that their case files show up on Internet search engines such as Google and that regardless of the nature and outcomes of the enforcement actions, the information damages their reputation.

According to the Tribune, Mr. Stephenson contends that many of the admissions of guilt by brokers under investigation were the result of “abuses” by the Utah Division of Securities under its former director, Wayne Klein. The division was audited in 2008 and Mr. Klein left the office that same year. Mr. Stephenson could not be reached for comment.

"If people are complaining about something being a public record, then a statute would be needed to keep it secret," said Mr. Klein, who now is head of Klein & Associates PLLC. "On the other hand, if they're complaining that the records are now too available, the Division[of Securities] can't be expected to compensate for someone else publicizing a public record."

It doesn't appear that the Utah regulator is open to the idea of scrubbing or removing case files on the Internet and/or adding information about ultimate outcomes of its past enforcement actions, according to the newspaper.

“Utah has a billion-dollar fraud problem every year, and the idea that people who have admitted violating securities laws can, at some time, take that information and hide it from the public was not supported by the commission,” Erik Christiansen, chairman of the Utah Securities Commission, told the Tribune. The commission is a five-member panel that advises the securities division.

Wayne Klein, the former director of the Utah Division of Securities and current head of Klein & Associates PLLC, added that a statute would have to be enacted to keep an incident from becoming a public record. "On the other hand," said Mr. Klein, "if they're complaining that the records are now too available, the Division [of Securities] can't be expected to compensate for someone else publicizing a public record."

  @IN Wire

Apr 23 06:57AM
Personal Technology: The Best Ways to Store Photos in the Cloud http://t.co/HZEwokhvZH
Apr 23 06:24AM
M&A Buzz Boosts Markets | Fox Business http://t.co/hCWm0IY3fL via @foxbusiness

Career Center

Explore your opportunities and be informed for your next move.

Company Type
Firm Type
Clearing Firm
Presented by

Most Watched Video

7:12The 2 biggest factors driving growth in active ETFs

Ugo W. Egbunike Dir. Of Business Development, ETF.com Greg Crawford Deputy Editor, InvestmentNews

Video Spotlight
1:47People are Living Longer. Good News or Bad News?

Sponsored by Oppenheimer Funds Inc.