Bill Text: MO HB2327 | 2010 | Regular Session | Introduced
Bill Title: Changes the laws regarding the Missouri Securities Act
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2010-05-14 - Referred: Crime Prevention (H) [HB2327 Detail]
Download: Missouri-2010-HB2327-Introduced.html
SECOND REGULAR SESSION
95TH GENERAL ASSEMBLY
INTRODUCED BY REPRESENTATIVE LIPKE.
5141L.01I D. ADAM CRUMBLISS, Chief Clerk
AN ACT
To repeal sections 409.6-601 and 409.6-607, RSMo, and to enact in lieu thereof two new sections relating to the Missouri securities act.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 409.6-601 and 409.6-607, RSMo, are repealed and two new sections enacted in lieu thereof, to be known as sections 409.6-601 and 409.6-607, to read as follows:
409.6-601. (a) This act shall be administered by the commissioner of securities who shall be appointed by and act under the direction of the secretary of state, and shall receive compensation as provided by law.
(b) The attorney general shall appear on behalf of and represent the commissioner in all proceedings before the administrative hearing commission, and in the circuit court of any county of the state or any city not within a county, or any court of another state in all civil enforcement actions brought under this act. The attorney general may appoint attorneys employed by the secretary of state as special assistant attorneys general to appear on behalf of and represent the commissioner.
(c) It is unlawful for the secretary of state, commissioner or an officer, employee, or designee of the commissioner to use for personal benefit or the benefit of others records or other information obtained by or filed with the commissioner that are not public under section 409.6-607(b). This act does not authorize the secretary of state, commissioner or an officer, employee, or designee of the commissioner to disclose the record or information, except in accordance with section 409.6-602, 409.6-607(c), or 409.6-608.
(d) This act does not create or diminish a privilege or exemption that exists at common law, by statute or rule, or otherwise.
(e) The commissioner may develop and implement investor education initiatives to inform the public about investing in securities, with particular emphasis on the prevention and detection of securities fraud. In developing and implementing these initiatives, the commissioner may collaborate with public and nonprofit organizations with an interest in investor education. The commissioner may accept a grant or donation from a person that is not affiliated with the securities industry or from a nonprofit organization, regardless of whether the organization is affiliated with the securities industry, to develop and implement investor education initiatives. This subsection does not authorize the commissioner to require participation or monetary contributions of a registrant in an investor education program.
(f) The "Investor Education and Protection Fund" is created to provide funds for the purposes identified in subsection (e). Notwithstanding the provisions of section 33.080, RSMo, any funds remaining in the secretary of state's investor education and protection fund at the end of any biennium shall not be transferred to the general revenue fund;
(g) The "Whistleblower Program" is created to receive and evaluate information received from individuals disclosing potential violations of this act while, as appropriate, maintaining the confidentiality or anonymity of those individuals. Any acts under this subsection shall be governed by the following:
(1) The commissioner may, under this subsection and section 409.6-605(a), adopt and amend rules necessary or appropriate to implement this program;
(2) The commissioner may pay a monetary award to individuals participating in the whistleblower program who provide information that contributes to the successful resolution of an administrative or civil enforcement action. Payment of an award under this paragraph shall be in the sole discretion of the commissioner. An award paid under this paragraph is governed by the following:
(A) The determination of the amount of an award shall be in the sole discretion of the commissioner. The commissioner may pay an award or awards not exceeding an amount equal to thirty percent, in total, of the monetary sanctions imposed in the action or related actions to one or more whistleblowers who voluntarily provided information to the commissioner that led to the successful enforcement of the action. Any amount payable under this subparagraph shall be paid from the investor education and protection fund described in subsection (f) of this section;
(B) No award under this paragraph shall be made to any whistleblower:
(i) Who is a member, officer, or employee of any regulatory agency;
(ii) Who is convicted of a criminal violation related to the action for which a whistleblower could otherwise receive an award; or
(iii) Who fails to submit information in a manner acceptable and useful to the commissioner;
(3) The commissioner shall generally inform the public of the whistleblower program and make available a toll-free telephone number to receive disclosures from whistleblowers. Every broker-dealer, investment advisor, issuer, firm, or any other person who employs an individual who is engaged in the business of effecting transactions in securities or advising others as to the value of securities is required to post and keep posted on its premises, in conspicuous places where employees are employed, a notice regarding the whistleblower program. The posting shall include the toll-free number described in this paragraph and the whistleblower program's web address. The same information shall also be provided to all new employees during routine new employee orientation. The posting can be verified at any time during routine or for cause audits or inspections by a representative of the commissioner;
(4) No broker-dealer, investment advisor, issuer, firm, or other person who employs an individual who is engaged in the business of effecting transactions in securities or advising others as to the value of securities shall discharge, demote, suspend, threaten, harass, or in any other manner discriminate against a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower in providing information to the commissioner in accordance with this subsection or in assisting in any investigation or judicial or administrative action based upon or related to such information. A whistleblower who alleges discharge or other discrimination in violation of this paragraph may bring an action under this paragraph in the appropriate circuit court. A whistleblower prevailing in any action brought under this paragraph shall be entitled to all relief necessary to make such whistleblower whole, including reinstatement with the same seniority status that the whistleblower would have had but for the discrimination; the amount of back pay, with interest; and compensation for any special damages sustained as a result of the discrimination, including litigation costs, expert witness fees, and reasonable attorneys' fees;
(5) The commissioner may establish incentives for individuals and companies to fully and truthfully cooperate and assist with investigations and enforcement actions. The granting of any incentives shall be in the sole discretion of the commissioner or a representative of the commissioner. Incentives may include:
(A) Assurances that any statements made by a whistleblower shall not be used against that person in subsequent proceedings, except that the commissioner may use the statements made as a source of leads to discover additional evidence and for impeachment or rebuttal purposes if the person testifies or argues inconsistently in a subsequent proceeding;
(B) Immunity from enforcement actions;
(C) Reduced civil penalties; or
(D) A request submitted by the commissioner to a prosecutor that the whistleblower be provided incentives in any subsequent proceeding brought by such prosecutor;
(6) All information provided to the commissioner by a whistleblower shall be confidential and privileged as an evidentiary matter (and shall not be subject to civil discovery or other legal process) in any proceeding in any court or administrative agency and shall be exempt from disclosure, in the hands of an agency, unless and until required to be disclosed to a defendant or respondent in connection with a public proceeding instituted by the commissioner or any other agency or regulatory entity. Without the loss of its status as confidential and privileged in the hands of the commissioner, all information referred to in this paragraph may, in the discretion of the commissioner, when determined by the commissioner to be necessary to accomplish the purposes of this section and protect investors, be made available to the attorney general, an appropriate regulatory authority, a self-regulatory authority, and any other appropriate state or federal authority, each of which shall maintain such information as confidential and privileged in accordance with the requirements of this paragraph;
(7) For purposes of this subsection, the following terms shall mean:
(A) "Whistleblower", any person employed by a person in the business of effecting transactions in securities or the business of advising others as to the value of securities or the advisability of investing who discloses information regarding potential violations of this act under the whistleblower program. The term includes a broker-dealer agent, an investment advisor representative, an issuer agent, and any other person working for or employed by a broker-dealer, an investment advisor, an issuer, or any other person required to be registered under this act;
(B) "Monetary sanctions", any monies ordered or agreed to be paid, including, but not limited to, restitution, disgorgement, civil penalties, costs, and payments as a result of a successful enforcement action or settlement of a proceeding under sections 409.6-603(b), 409.6-604(c), and 409.6-604(h).
409.6-607. (a) Except as otherwise provided in subsection (b), records obtained by the commissioner or filed under this act, including a record contained in or filed with a registration statement, application, notice filing, or report, are public records and are available for public examination.
(b) The following records are not public records and are not available for public examination under subsection (a):
(1) A record obtained by the commissioner in connection with an audit or inspection under section 409.4-411(d) or an investigation under section 409.6-602;
(2) A part of a record filed in connection with a registration statement under sections 409.3-301 and 409.3-303 to 409.3-305 or a record under section 409.4-411(d) that contains trade secrets or confidential information if the person filing the registration statement or report has asserted a claim of confidentiality or privilege that is authorized by law;
(3) A record that is not required to be provided to the commissioner or filed under this act and is provided to the commissioner only on the condition that the record will not be subject to public examination or disclosure;
(4) A nonpublic record received from a person specified in section 409.6-608(a);
(5) Any Social Security number, residential address unless used as a business address, and residential telephone number contained in a record that is filed; [and]
(6) A record obtained by the commissioner through a designee of the commissioner that a rule or order under this act determines has been:
(A) Expunged from the commissioner's records by the designee; or
(B) Determined to be nonpublic or nondisclosable by that designee if the commissioner finds the determination to be in the public interest and for the protection of investors; and
(7) A record provided to the commissioner by a whistleblower, including disclosures made by a whistleblower and the identity of a whistleblower, under section 409.6-601(g), unless the commissioner deems disclosure of the information in the public interest.
(c) If disclosure is for the purpose of a civil, administrative, or criminal investigation, action, or proceeding or to a person specified in section 409.6-608(a), the commissioner may disclose a record obtained in connection with an audit or inspection under section 409.4-411(d) or a record obtained in connection with an investigation under section 409.6-602.
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