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


Senate Research Center   S.B. 1060
78R8383 CLG-DBy: Ellis, Rodney
Government Organization
3/24/2003
As Filed


DIGEST AND PURPOSE 

The recent investment securities scandals have highlighted what some say
are shortcomings in the rules and regulations enforcement of investment
securities.   As proposed, 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 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 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
assistance to be provided without regard to whether the conduct described
in the request would also constitute a violation of this act or another
law of this state had the conduct occurred in this state.  Authorizes the
commissioner,  in determining whether to provide the assistance, to
consider certain factors.  

SECTION 3.  Amends Article 581-29, V.T.C.S., as follows:

I.  Requires any person who renders services, directly or through an
investment adviser representative, as an investment adviser without being
a registered investment adviser as required by this Act or without
submitting a notice filing as required by Section 12-1 of 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 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 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. 

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