State regulators obtain more than $1 billion in investor restitution, fines

State regulators obtain more than $1 billion in investor restitution, fines
Money returned to investors hits highest level — $558 million — since 2014, NASAA reports.
SEP 10, 2019
State securities regulators obtained more than $1 billion in investor restitution and fines last year, marking the highest amount of total relief achieved through enforcement actions in five years. Regulators returned more than $558 million to investors — the most since 2014 — and levied $490 million in fines, for total relief of $1.048 billion, according to a report released by the North American Securities Administrators Association Tuesday at its annual conference in Austin, Texas. The fine amount marks the second highest total in five years, following the $682 million imposed in 2016. State regulators oversee investment advisers who have less than $100 million in assets under management. State regulators opened 5,320 cases in 2018 and took 2,067 enforcement actions, according to NASAA. They obtained a total of 1,753 years in criminal relief – 1,048 in incarceration years and 705 in probation years. In addition, state regulators denied, revoked or suspended 1,032 licenses, while 4,511 licenses were withdrawn. Both numbers are the highest since 2014. "The enforcement report really shows the great work that state securities regulators do every year," Christopher Gerold, bureau chief of the New Jersey Securities Bureau, said in an interview. "It's the one thing we can hold up and say, 'This is what we're doing.'" Mr. Gerold was set to be inaugurated as the new NASAA president Tuesday afternoon. [Recommended video: Deploying fintech to improve the client experience and prevent fraud] ​ The report highlights enfocement actions targeting senior financial abuse. Last year, state regulators opened 365 investigations and took 141 enforcement actions involving 785 senior investors. Legislation or rules based on the NASAA model rule on senior protection have been enacted in 23 jurisdictions, including four this year — Arizona, Maine, New Hampshire and Virginia. The enforcement report provides examples of cases. One of the elder abuse incidents involved an investment adviser who reported a suspicious solicitation of a senior investor by an oil-and-gas company to the Alabama Securities Commission and Adult Protective Services. A hold was put on the investor's account that prevented a $200,000 transfer to the purported operation.

Latest News

Goldman leads wave of prediction market bans at financial firms
Goldman leads wave of prediction market bans at financial firms

As Goldman Sachs tightens rules on event contract trading, RIAs and hedge funds are weighing their own policies

Advisor moves: Baird recruits $600M veteran pair to director roles in North Carolina
Advisor moves: Baird recruits $600M veteran pair to director roles in North Carolina

Meanwhile, Wells Fargo lures defectors from UBS and JPMorgan to expand in the East Coast, while another bank aligns itself with RayJay's financial institutions division.

AI may be nudging some older workers into early retirement, study finds
AI may be nudging some older workers into early retirement, study finds

New research suggests AI-exposed workers over 55 are leaving jobs more often than before ChatGPT’s rise.

Wall Street banks promoting AI agents from research aids into digital coworkers
Wall Street banks promoting AI agents from research aids into digital coworkers

Agentic AI is landing in trading, treasury and wealth management roles across major banks, with advisory functions as the next frontier.

People moves: FiNet hires former LPL executive Andrew Harpp, Ellevest names new CIO
People moves: FiNet hires former LPL executive Andrew Harpp, Ellevest names new CIO

Wells Fargo affiliate and women-focused wealth firm both promote leadership as they scale advisor support.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income