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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 Licensing 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.
Licensing Section
The goal of broker-dealer and investment adviser registration is to ensure
that individuals and firms dealing with investors in the Commonwealth
meet certain minimum standards of conduct, education, and financial solvency.
The Licensing Section reviews all applications for registration of broker-dealers,
agents, investment advisers, and investment adviser representatives and
performs inspections of broker-dealers and investment advisers to ensure
compliance with the requirements of the Act and Rules. All individuals
or firms offering or selling securities or giving investment advice within
the Commonwealth must be registered unless an exemption is available.
Registrants must submit to a thorough background investigation, pass examinations
on general securities principles and state securities laws, and agree
to meet certain record-keeping and disclosure requirements. The following
criteria, among others, are considered in determining whether to approve
an application for registration:
- financial solvency;
- performance on written examinations;
- conviction of a crime; and
- evidence of past inequitable or fraudulent business practices in the
sale of securities.
The Licensing Section also answers questions from the public regar ding
the registration status and disciplinary history of broker-dealers, agents,
investment advisers and investment adviser representatives and responds
to inquir ies 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
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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. |
