The North American Securities Administrators Association (NASAA) has developed model legislation that aims to help local governments create restitution funds for victims of securities violations.
Members of the umbrella group of U.S. state and Canadian provincial regulators voted to approve a model act that jurisdictions can use to establish mechanisms to provide financial assistance to victims of securities law violations who are awarded restitution but can’t fully collect those awards.
The model legislation, which follows efforts in several states (including Indiana, Montana, Vermont, Kansas and Maine) establishes a securities restitution assistance fund, defines eligibility requirements, and sets other features such as payment caps and conditions for prohibiting awards in certain circumstances.
It also calls for restitution assistance to be doubled for certain kinds of victims, such as vulnerable investors.
“State securities regulators are focused on protecting the interests of investors, and this model act provides states with one more tool to help securities fraud victims on their way to financial recovery,” said Lisa Hopkins, president of NASAA and West Virginia’s senior deputy securities commissioner.
The model act was developed by a committee led by Montana’s deputy securities commissioner, Lynne Egan, and a working group headed by Karla Black, deputy securities administrator and general counsel for Maine’s Office of Securities.