HCS HB 380 -- SECURITIES REGULATION

SPONSOR:  Luetkemeyer

COMMITTEE ACTION:  Voted "do pass" by the Committee on Financial
Services by a vote of 17 to 0.

This substitute substantially revises and modernizes the
securities regulation laws, incorporating many provisions of the
Uniform Securities Act.  In its main provisions, the substitute:

(1)  Authorizes the Secretary of State to seek court orders
requiring violators to disgorge illicit profits, pay restitution,
and pay into the Investor Education and Protection Fund, which
the substitute establishes;

(2)  Increases criminal fines to $1 million;

(3)  Requires banks with on-premise brokerage firms to comply
with federal rules;

(4)  Modernizes, simplifies, and broadens exemptions from
securities registration with the state;

(5)  Promotes consistency with other states and the Securities
and Exchange Commission in the definition of "security";

(6)  Authorizes civil prosecution of individuals who materially
aid in violations; and

(7)  Adds civil penalties of $10,000 for one violation and up to
$1 million for more than one violation.

FISCAL NOTE:  Total Estimated Net Effect to Secretary of State's
Investor Education and Protection Fund of $0 in FY 2004, FY 2005,
and FY 2006.

PROPONENTS:  Supporters say that the bill modernizes current law
regulating securities to make it uniform and consistent with
federal law.  The bill allows the state to enforce regulations
designed to prevent fraud through administrative actions and
state courts.  The bill allows victims of securities fraud to get
restitution from the criminals, increases fines (so that the
fines are not just a "cost of doing illegal business"), and
codifies many industry standards.  The bill makes it easier for
the Attorney General to enforce the law and seize ill-gotten
gains of those committing fraud.  The bill also simplifies much
of the required paperwork for small businesses and the
agricultural industry.

Testifying for the bill were Representative Byrd; Office of the
Secretary of State; Missouri Bankers Association; Missouri
Independent Bankers Association; Securities Industry Association;
Office of the Attorney General; Missouri Insurance Coalition; and
Financial Planners Association.

OPPONENTS:  There was no opposition voiced to the committee.

Richard Smreker, Senior Legislative Analyst

Missouri House of Representatives
Last Updated July 25, 2003 at 10:11 am