State securities cops seek fed money to combat fraud

Arguing that they can do more than federal agencies with less, state securities regulators today asked Congress to consider giving federal grants to state securities divisions. Congress should “consider establishing a federal grant program to assist state law enforcement agencies, including securities divisions,” said Jim Ropp, Delaware securities commissioner and chairman of the enforcement section of the North American Securities Administrators Association Inc. of Washington. “Additional resources would enhance our ability to uncover and prosecute securities fraud during this economic downturn,” he said in prepared testimony before the House Financial Services Committee. State securities regulators have been in the lead on major enforcement cases, such as the auction rate securities and research analyst scandals, Mr. Ropp added. “Indeed, in some cases, at the time the states began their investigations, it was unclear whether the federal regulators intended to pursue any investigation at all,” he said. At the same hearing today, William Galvin, secretary of the commonwealth of Massachusetts, told the committee that states should be given more power over federally registered investment advisers, rather than be limited to overseeing smaller state-registered advisers.