SRC-LBB, VRA S.B. 1060 78(R)BILL ANALYSIS


Senate Research CenterS.B. 1060
By: Ellis, Rodney
Government Organization
8/24/2003
Enrolled


DIGEST AND PURPOSE 

The recent investment securities scandals have highlighted what some say
are shortcomings in the rules and regulations enforcement of investment
securities.   S.B.1060 provides for improved investment securities
enforcement. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subsection A, Section 4, The Securities Act, (Article
581-4, V.T.C.S.), to clarify that the definition of security applies
whether or not a security is evidenced by a written instrument. 

SECTION 2.  Amends Section 28, The Securities Act, (Article 581-28,
V.T.C.S.), by adding Subsection C, as follows: 

C.  Assistance to Securities Regulator of Another Jurisdiction.
Authorizes the Securities Commissioner to provide assistance to a
securities regulator of another state or a foreign jurisdiction who
requests assistance in conducting an investigation to determine whether a
person has violated, is violating, or is about to violate a law or rule of
the other state or foreign jurisdiction relating to a securities matter
the securities regulator is authorized to administer or enforce.
Authorizes the commissioner to provide assistance by using the authority
to investigate and any other power conferred by this section as the
commissioner determines is necessary and appropriate.  Authorizes the
commissioner,  in determining whether to provide the assistance, to
consider certain factors.  

SECTION 3.  Amends Section 29, The Securities Act, (Article 581-29,
V.T.C.S.), as follows: 

I.  Requires any person who renders services, as an investment adviser or
an investment adviser representative without being registered as required
by this Act to be considered guilty of a felony and on conviction of the
felony to be sentenced to pay a fine of not more than $5,000 or
imprisonment in the penitentiary for not less than two or more than 10
years, or by both the fine and imprisonment. 

SECTION 4.  Amends Section 32, The Securities Act, (Article 581-32,
V.T.C.S.), by amending Subsection B and adding Subsection C, as follows: 

B.  Broadens the scope of the Securities Act to permit the state to obtain
restitution for victims of fraudulent practices against any person or
company that has engaged in prohibited conduct.  

C.  Authorizes the attorney general, in an action brought under this
section for fraud or a fraudulent practice in connection with the sale of
a security, to seek, for an aggrieved person, the disgorgement of any
economic benefit gained by the defendant through the violation, including
a bonus, fee, commission, option, proceeds, profit from or loss  avoided
through the sale of the security, or any other tangible benefit.
Authorizes the attorney general to recover from an order of disgorgement
obtained under this subsection reasonable costs and expenses incurred by
the attorney general in bringing the action. 

SECTION 5.  Effective date: upon passage or September 1, 2003.