The results from this year’s enforcement survey demonstrate that NASAA’s U.S. members continue to play a critical role in protecting investors and holding securities law violators responsible for the damage they cause to individual investors specifically and the integrity of our capital markets.
2021 NASAA Enforcement Report Highlights
(Based on 2020 data.)
The North American Securities Administrators Association (NASAA) is an international association of state, provincial and territorial securities regulators in the United States, Canada and Mexico. NASAA members have protected Main Street investors from investment schemes and frauds for more than 100 years.
Annually, NASAA conducts an enforcement survey of its U.S. members. (NASAA’s members in Canada participate in a different enforcement survey; an overview of which is provided on page 12.) The Enforcement Section of NASAA then analyzes the data and identifies trends. The data, statistics, and trends included in this report provide an overview of state enforcement efforts for the 2020 fiscal or calendar year based on survey responses from NASAA members (the overall numbers are likely higher as not all jurisdictions responded to the survey and/or questions within the survey).
As you will see, state enforcement activity is strong. During 2020, state securities regulators opened 5,501 new investigations and continued to work on 2,572 ongoing investigations for a total of 8,073 investigations conducted in 2020. Of those, 8.073 investigations, state securities regulators took 2,202 enforcement actions in 2020. These actions led to $306 million in restitution ordered returned to investors, fines of $42 million and criminal relief of 919 years, including incarceration and probation.
While securities markets are global, securities are sold locally by professionals who are licensed in every state where they conduct business. Our nation’s complementary system of state, federal, and industry regulation helps to ensure fair markets for all investors. In enforcing our state securities laws, states seek not only to sanction those who damage the integrity of our markets or cause harm to investors, but to also deter future financial misconduct. Credible deterrence involves several key elements: a strong legal framework with clear repercussions for misconduct; mechanisms and systems to detect and investigate misconduct; and decisive action and sanctioning of those that violate the law.
Investors on Main Streets across the country, by necessity, must become more self-reliant as they seek to build a financially secure retirement and plan for life’s major financial events. These are not easy tasks and are compounded by an ever-increasingly complex savings and investing marketplace. NASAA and its members recognize the challenges facing investors and will continue to work to make sure they are treated fairly. This has been our mission for over a century, and it is as important today as it was when the first state securities laws were enacted.