An Overview of the Securities Division

The Secretary of the Commonwealth, William Francis Galvin, is the constitutional officer who, through the Massachusetts Securities Division (also referred to as the "division" in this document), is entrusted with the task of administering and enforcing Massachusetts General Law, Chapter 110A, the Uniform Securities Act (also referred to as the "Act"), and the regulations promulgated thereunder (the "Rules"). The Securities Division adopts and periodically updates the Rules to ensure that investors are adequately protected and that unreasonable burdens on legitimate capital raising activities are avoided. The Secretary appoints a Securities Director who supervises the day-to-day activities of the staff. The Securities Division includes the Corporate Finance Section, the Registration, Inspection, Compliance and Examinations (RICE) Section and the Enforcement Section.

Mission of the Securities Division

The primary mission of the Massachusetts Securities Division is investor protection. Consistent with that mission, the division works to ensure a free and competitive securities market in Massachusetts, thereby increasing investor confidence, encouraging the formation of capital, and supporting the creation of new jobs in Massachusetts.

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What Can the Securities Division Do For You?

  • Review securities offering documents.
  • Consult with small businesses about securities laws.
  • Check status of persons offering or selling securities, including disciplinary history.
  • Check status of persons giving investment advice, including disciplinary history.
  • Investigate tips and complaints about alleged violations of law.
  • Answer investor inquiries by telephone and/or in person.
  • Render interpretative opinions.
  • Make available copies of public records on securities offerings and registration status of investment professionals.
  • Provide free investor education materials.

The Securities Division cannot eliminate the risks inherent in an investment. Investors are encouraged to contact their broker-dealer or investment adviser firm directly if they have any concerns with respect to the handling of their accounts. The division welcomes information and inquiries concerning alleged violations of the Act. Investors with such concerns should send the division a letter describing the nature of the concern, together with copies of any relevant documents. The Enforcement Section staff is available each day to speak with investors about their concerns. Finally, anonymous inquiries, both written and oral, are accepted. Depending on the circumstances surrounding an inquiry, the Securities Division may begin an investigation. If an investigation uncovers facts that indicate a violation of the Act, the division may pursue administrative sanctions or injunctive relief through the Attorney General, and it may refer cases for criminal prosecution. Should you have information about an alleged violation, or if you wish to inquire about the activities of persons issuing or selling securities or giving investment advice, please contact:

William Francis Galvin
Secretary of the Commonwealth
Massachusetts Securities Division
One Ashburton Place, 17th Floor
Boston, MA 02108
Telephone: 617-727-3548
Toll-free: 800-269-5428
Fax: 617-248-0177

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Functions and Goals of the Securities Division

Corporate Finance Section

The Corporate Finance Section acts as the first line of defense against investor fraud and has a number of investor protection charges. These include:

  • reviewing offering materials to ensure full and fair disclosure and readability;
  • preventing offerings which by their terms would result in abuses of investors;
  • assisting small business offerors; and
  • educating investors.

Registration, Inspection, Compliance and Examinations (RICE) Section

The Registrations, Inspections, Compliance and Examinations (RICE) section focuses on the registration and regulation of broker-dealers and agents, investment advisers and investment adviser representatives, and exempt reporting advisers. All firms and individuals offering and selling securities or investment advice on securities for compensation in the Commonwealth must apply for registration with, or provide other notice to, the Securities Division unless an exemption is available. Individuals must pass one or more comprehensive examinations before applying for registration. Firms must comply with specific record-keeping requirements and demonstrate minimum financial solvency. RICE reviews all applications to determine whether firms and individuals are qualified for registration after the evaluation of many additional factors, including any past disciplinary history or client complaints.

RICE also conducts comprehensive audits and inspections of state registered investment advisers to determine compliance with state and federal securities laws and regulations and to ensure that these investment advisers meet the obligations they owe to their clients. These audits and inspections are often conducted at the investment advisers offices and may be conducted either with prior notice or on an unannounced basis. Among many items, RICE reviews the verification and valuation methods for client assets, the financial solvency of firms, advertising and communications with clients, and the calculation of any performance reports provided to clients. RICE may discipline investment advisers’ who fail in their regulatory responsibilities or duties to their clients.

RICE also collects initial and annual registration fees from firms and individuals. Finally, RICE answers questions from the public regarding the registration status and disciplinary history of broker-dealers and agents, investment advisers and investment adviser representatives, and exempt reporting advisers and responds to inquiries concerning their activities.

Enforcement Section

The Enforcement Section seeks to prevent, detect, and redress violations of the Act and Rules. The Act provides for administrative sanctions to be imposed by the Securities Division. These sanctions include:

  • denial, revocation, or suspension of broker-dealer, agent, investment adviser or investment adviser representa tive registration;
  • cease and desist orders prohibiting or suspending the sale of securities;
  • orders denying or revoking registration of securities; and
  • orders revoking exemptions from securities registration.

The Enforcement Section investigates and litigates cases involving violations of the Act. When warranted, the Enforcement Section brings administrative proceedings to prevent future infractions and seeks redress for prior violations of the Act. Referrals for criminal prosecution are made by the Enforcement Section to local, state and federal law enforcement agencies.

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Organizational Chart

Graphic of the four subdivisions of the Securities Division: Corporate Finance Section, Licensing Section, Enforcement Section, General CounselCorporate

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Requests for Interpretive Opinions

The General Counsel of the Securities Division responds to public inquiries concerning interpretation of the Act and Rules, and issues written interpretative opinions to assist persons in complying with the law. The division's attorneys are available daily to answer questions of a legal nature from the public by telephone or on a walk-in basis.

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Public Records Requests

The Securities Division provides information regarding the registration status and disciplinary history of broker-dealers, agents, investment advisers and investment adviser representatives. Information about certain securities offerings filed with the division is also available to the public. Copies of completed applications for securities registration or exemptions from registration, reports and other forms may be obtained through a public records request. Should you have any questions about whether a security is registered or whether a broker-dealer, agent, investment adviser or investment adviser representative is registered, contact the Securities Division at 617-727-3548.

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Additional Information

The best way for investors to protect themselves against unnecessary risks is by informing themselves about investments and investment professionals, taking steps to avoid investment "scams" or "swindles ", determining their personal financial situation and needs, and setting realistic investment objectives. The Securities Division helps investors educate themselves by providing at no charge such publications as, "Investor Alert! How to Protect Your Money from Schemes, Scams, and Frauds"; "What You Should Know About Mutual Funds"; "10 Do's and Don'ts for Investors"; and "Tips for Consumers on Mutual Funds Sold at Banks". The Securities Division's staff also speaks at investor education forums, answers questions from the public and distributes informational pamphlets.