Members of Cosgrove Law, LLC recently attended the 2009 Securities Symposium, which included discussions with the Missouri Commissioner of Securities, Matthew D. Kitzi, and various other local and national securities industry leaders. The symposium covered a broad range of topics, including the current and anticipated trends in securities regulation and important issues facing Compliance Professionals today.
According to Commissioner Kitzi and his staff, the Missouri Securities Division is currently experiencing the most active period in its 80 year history in the wake of the 2008 financial crisis. Specifically, the Securities Division is on pace to receive over 2300 complaints this year, well above the previous one year high. According to the Securities Division, the most frequent complaints it has received from investors in 2009 have been in the following areas: (1) activity on accounts; (2) annuities; (3) complex products; (4) non-real estate business opportunities; and (5) real estate.
Along with an increased number of complaints, the Securities Division emphasized its commitment to step up its enforcement actions. In that regard, the Securities Division is on pace to set a record for the highest ratio of complaints vs. enforcement actions in its long history.
In addition, as we discussed on September 21, 2009, NASAA, with the help of the states, conducted a comprehensive audit sweep of Investment Advisers in 2008. Upon review of Missouri’s audit sweep, Missouri found that the most frequent deficiencies were as follows: (1) dearth of suitability on customers; (2) incomplete or out of date customer contracts; (3) incomplete or out of date ADVs; (4) inadequate computer back-up systems and poor books and records retention; and (5) financial deficiencies.
Are you concerned about the recent spark in enforcement activity from state and federal securities regulators in the wake of the Obama administration’s proposed regulatory overhaul? If so, contact a member of our firm to review and analyze your firm’s registration practices to ensure that your current practices are compliant with state and federal regulations.