Nevada’s SOS: Financial reform law good for state’s investors

Page Last Updated: Wednesday July 21, 2010 3:40pm PDT

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Nevada's Secretary of State says the financial reform bill signed into law by President Obama today will help his office protect the state's investors.

The bill gives states the authority to oversee investment advisers who manage funds up to $100 million, according to a release from Secretary of State Ross Miller's spokesperson.

Previously, investment adviser firms that managed more than $25 million were regulated by the federal Securities and Exchange Commission (SEC), Spokeswoman Pam duPre said.

"State securities administrators will be in a much better position to audit and oversee these small to medium-sized investment advisers," Miller said. "Now the federal government can focus more on the largest advisers and do a better job of preventing billion dollar schemes that wreak havoc on the economy."

It's estimated the Secretary of State's Securities Division will oversee an additional 20 to 30 investment adviser firms depending on the final rules promulgated by the SEC.

The bill also requires the SEC to write rules to prohibit so-called "bad boys", or individuals guilty of securities fraud, from selling unregistered securities under the "Regulation D" exemption, duPre wrote in the release. Once final, the new rule will further enable Miller's Securities Division to help prevent Nevadans from becoming victims of securities fraud, duPre said.

State level regulators will also now have a seat on the federal oversight council that is planned to indentify risks to the nation's financial stability and promote greater discipline in the financial markets.

"From the states' perspective, this bill gives us greater ability to help protect the Main Street investor and gives the feds more freedom to keep an eye on the huge investment firms and big banks on Wall Street," Secretary Miller said. "We need a financial environment in this country that still allows investors to take risks in a free market economy and yet doesn't encourage the reckless behavior that could lead us once again to the brink of financial collapse."

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