Texas H.B. 1535, enacted June 10, 2019 and effective September 1, 2019, amends several sections relating to the continuation and functions of the State Securities Board.
Subsection (J) of Section 581-2 has been amended to add language criminal prosecutions of cases under subsection B of Section 3 of the Act. With respect to cases referred during the preceding year by the Board under subsection A of Section 3 of the Act, a breakdown by county and district attorney of the number of cases where:
- criminal charges were filed;
- prosecution is ongoing; or
- prosecution was completed.
Section 581-2-3, subsection (B) has been amended and relates to the training program and information that must be provided to the person being trained. New subsection (D) has been added and states that the Commissioner “shall create a training manual that includes the information required by subsection B of this section. The Commissioner shall distribute a copy of the training manual annually to each member of the Board. Each member of the Board shall sign and submit to the Commissioner a statement acknowledging that the member received and has reviewed the training manual.”
Section 581-2-6 has been amended by adding and striking language relating to the maintenance of information so the Commissioner or the Commissioner’s designee can act promptly and efficiently on complaints filed with the Commissioner or Board.
New Section 581-2-8 has been added to allow for alternative rulemaking and dispute resolution. Under this section, the Board shall develop a policy to encourage the use of:
- negotiated rulemaking procedures under Chapter 2008, Government Code, for the adoption of Board rules; and
- appropriate alternative dispute resolution procedures under Chapter 2009, Government Code, to assist in the resolution of internal and external disputes under the Board's jurisdiction.
Section 581-3 has been amended and adds new subsections (B) through (F) allowing that the Board “may provide assistance to a county or district attorney who requests assistance in a criminal prosecution involving an alleged violation” of the Act that is referred by the Board to the attorney under subsection A of the section.
New Section 581-32 has been added and related to refunds. The Commissioner “may order a dealer, agent, investment adviser, or investment adviser representative” regulated under the Act to “pay a refund to a client or a purchaser of securities or services from the person or company as provided in an agreed order or an enforcement order instead of or in addition to imposing an administrative penalty or other sanctions.” The amount of the refund may not “exceed the amount the client or purchaser paid to the dealer, agent, investment adviser, or investment adviser representative for a service or transaction regulated by the Board. The Commissioner may not require payment of other damages or estimate harm in a refund order.”
Section 581-35 has been amended and strikes the language “or register a branch office” from subsection (B)(1).