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State Securities Caseload Down Even as Jail Time Increases

State Securities Caseload Down Even as Jail Time Increases

State regulators’ enforcement actions were down almost 13 percent in 2013, yet the average length of incarceration for securities crimes more than doubled.

State securities regulators instituted 2,184 total enforcement actions (including administrative, civil and criminal cases) against 3,006 individuals in 2013, according to the North American Securities Administrators Association's annual enforcement report. Yet overall, the total number of enforcement actions is down from the 2,496 cases reported in 2012.

NASAA 2014 Enforcement Report

Of those cases brought in 2013, cases against broker/dealer firms were down about 3 percent to 219 actions, while cases against RIA firms were down by about 4 percent, from 181 actions in 2012 to 174 actions in 2013. But it was cases against broker-dealer agents that saw the biggest spike, jumping from 189 cases in 2012 to 357 cases in 2013. Actions against registered investment advisor representatives also saw about a 10 percent increase from 158 cases in 2012 to 176 cases in 2013.

Despite the lower number of total cases brought, the number of years individuals were incarcerated through the efforts of state securities regulators increased 31 percent, jumping from 1,134 years in 2012 to 1,816 years in 2013. The average length of jail time also increased to 66 month, compared to the average 48 months given out in 2012—a 53 percent increase.

The most common type of case was fraud, with about 802 state enforcement cases brought with this charge. But while many fraud cases involved registered brokers or investment advisors, the 583 actions involved unregistered securities and 667 involved unregistered firms or individuals.

NASAA 2014 Enforcement Report

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