The North American Securities Administrators Association (NASAA) released findings of a report on Oct. 19 that found a 51% increase in the number of enforcement actions by state securities regulators in 2010, which led to a nearly 200% increase from the previous year in the amount of money ordered returned to investors.
According to the NASAA report, which is based on the results of a survey of NASAA members during the spring of 2011, state securities regulators conducted 7,063 investigations in 2010, which led to 3,475 enforcement actions, up from 2,294 enforcement actions in the previous year.
Enforcement actions, NASAA said, include criminal, administrative and civil actions. Nearly 1,000 of these actions involved financial abuse of seniors.
State-initiated enforcement actions resulted in $14.1 billion ordered returned to investors, with an actual reportable return of more than $12 billion, or 90% of ordered restitution, in the same year.
Jack Herstein (left), NASAA president and assistant director of the Nebraska Department of Banking & Finance Bureau of Securities, said that much of this restitution is attributable to repurchases of auction rate securities (ARS) stemming from state-led actions.