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State securities regulators protect investors by bringing enforcement actions that hold bad actors accountable for violations of the securities laws and seek to return the victims’ savings to them. Unfortunately, the government frequently cannot make victims whole among other reasons because the bad actors have become insolvent, there are insufficient funds to pay back all victims, or the assets cannot be located. Recognizing this shortfall and the effect it can have on retirees and other victims, some state governments have established restitution assistance funds and processes by which victims of securities violations can try to recover at least some of the hard-earned savings.

In 2021, NASAA adopted the NASAA Model Act to Create Restitution Assistance Funds for Victims of Securities Fraud (“NASAA Model Act” or “Model Act”) to make it easier for additional states to establish a restitution assistance fund.

State legislators interested in pursuing legislation based on the NASAA Model Act should contact their state securities regulator early to discuss the proposal. Look up your regulator using NASAA’s Contact Your Regulator resource.


The NASAA Model Act is designed to provide a framework for states to establish a state-level program that would provide monetary assistance to victims who have been harmed by securities law violations. The fund would provide financial assistance to eligible victims who have been unable to recover their losses through other means. The Model Act outlines the criteria for eligibility, the process for applying for restitution, and the responsibilities of the fund administrator. The Model Act is intended to be a flexible framework that can be adapted by individual states to meet their specific needs and circumstances.

The NASAA Model Act originated as a project of the NASAA State Legislation Committee (“Committee”). The Committee used a robust stakeholder engagement and public comment process to develop the Model Act. On July 1, 2020, the Committee circulated a draft of the Model Act for internal comments from NASAA member jurisdictions. NASAA then released a draft of the Model Act for a 30-day public comment period. When preparing the final version of the Model Act, the Committee received and considered comments from state securities regulators, investor protection advocacy organizations, and private financial services organizations. The Committee also considered the experiences that Indiana and Montana have had since 2010 and 2011, respectively, operating their own securities victim restitution funds.

On April 20, 2021, the NASAA Board of Directors approved the Committee’s request to submit the proposed NASAA Model Act to the NASAA membership for a vote. NASAA members subsequently voted to approve it on May 17, 2021.


Restitution Awards. The NASAA Model Act allows a state securities administrator to issue monetary assistance to eligible investors who have suffered losses as a result of securities law violations. The Model Act applies to any securities law violation that results in a final order of restitution.

  • Eligibility Criteria. The Model Act sets out the eligibility criteria for investors seeking restitution from the fund. To be eligible, persons or entities domiciled in the state must have suffered losses as a result of a securities law violation, and must have been unable to recover their losses through other means (such as a lawsuit or settlement). The Model Act also establishes a cap on recovery that is the lesser of $25,000 or 25% of the unpaid restitution for non-vulnerable persons. The cap increases to the lesser of $50,000 or 50% of the amount of unpaid restitution if the victim is a “vulnerable” person under the law. A vulnerable person is someone considered over a certain age (determined by the jurisdiction), or someone defined as a protected individual under the jurisdiction’s law protecting vulnerable persons. The Model Act allows for the administrator to adjust the recovery for good cause.
  • Disqualification. The Model Act disqualifies certain victims from receiving an award. These types of victims include, among others, individuals who participated or assisted in the securities violation or attempted to commit such violation. The Model Act does not allow a victim to receive assistance if they profited or would have profited from a securities violation.
  • Restitution Forfeited. The Model Act provides for the forfeiture of restitution when a victim is convicted in connection to the claim for assistance or where the victim has recovered more in assistance and restitution than prescribed in the final order ordering restitution for a securities violation. The Model Act provides the administrator with tools to recover funds and suspend assistance under certain circumstances.

Prefatory Notes in the Model Act. The Prefatory Notes contain a number of considerations that the adopting jurisdiction should consider. These considerations consist of claimant confidentiality, the procedural process for reviewing applications, funding the fund, ensuring relevant provisions of state law allows restitution as a remedy, limiting recovery to individuals rather than entities, and how the fund interacts with victims in the event of an appeal.


NASAA maintains an interactive map that identifies the (i) jurisdictions that had restitution assistance funds for victims of securities violations, which inspired the NASAA Model Act to Create Restitution Assistance Funds for Victims of Securities Fraud and (ii) jurisdictions that have since adopted a new law or regulation inspired by NASAA’s Model Act. Jurisdictions highlighted in orange had restitution assistance funds that inspired NASAA’s Model Act. Jurisdictions highlighted in blue have since adopted a new law or regulation inspired by NASAA’s Model Act.




Jurisdictions with Restitution Assistance Funds

     – Established a fund that inspired NASAA’s Model Act

     – Established a fund based on NASAA’s Model Act


To learn more, consider reviewing the enabling statute or rule for each jurisdiction, set forth below with the date of adoption.

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