Texas House Bill HB2342

Texas 2011 - 82nd Regular

• Introduced: 3/7/11
• Out of House Committee: 4/11/11
• Voted on by House: 4/27/11
• Refer: 3/10/11
• Out of Senate Committee: 5/10/11
• Report Pass: 4/5/11
• Voted on by Senate: 5/18/11
• Engrossed: 4/27/11
• Governor Action: 6/17/11
• Refer: 5/4/11
• Report Pass: 5/10/11
• Enrolled: 5/20/11
• Passed: 6/17/11

Caption

Relating to certain violations of and offenses under The Securities Act; providing penalties.

Impact

The implications of HB2342 on state laws are significant, as it seeks to strengthen the protection against securities fraud by increasing penalties and facilitating the process for victims to seek restitution. The amendments will allow the Attorney General to take action against violators to seek not just fines but also equitable remedies such as restitution and disgorgement of profits made from fraudulent actions. This is poised to serve as a stricter deterrent against securities fraud and could enhance consumer confidence in the investment market throughout Texas.

Summary

House Bill 2342 addresses certain violations of and offenses under The Securities Act of Texas. The bill proposes amendments to existing statutes aimed at enhancing the penalties for fraudulent practices in the sale of securities and the actions of investment advisers. Key provisions include the authority for the Commissioner to impose administrative fines against violators, where the maximum fine could either be $20,000 per violation or the gross economic benefit gained from the violations. Furthermore, if victims involved are persons aged 65 or older, an additional fine provision up to $250,000 may be considered, reflecting a heightened concern for protecting older adults from financial exploitation.

Contention

While the bill aims to protect investors, there may be debates surrounding the potential burden it imposes on investment advisers and firms. The increase in penalties may be perceived as a double-edged sword, potentially deterring fraud but also dissuading legitimate investment activities due to fear of severe consequences for unintentional infractions. Critics may argue that the bill could contribute to an overly punitive environment for investment professionals, while proponents would advocate for the necessity of such mechanisms to hold violators accountable and protect consumers effectively.