Joe Borg, Alabama’s securities commissioner, has done a good job of protecting Alabama investors during his tenure. His strategy for cracking down hard on financial crime is well known both in Alabama and around the U.S. Joe believes in punishing criminal wrongdoers with long prison sentences and hitting big financial firms that cheat investors with large fines. Joe is well-known as a very tough fellow among state securities regulators. He has a conviction rate of more than 95%, largely from cases involving mini-Madoff investment schemes, unregistered brokers and penny-stock firms.
Many in Alabama don’t realize that Joe will soon take on a new challenge. Under the Dodd-Frank financial-overhaul law passed by Congress, state securities regulators throughout the U.S. will take over the responsibility this summer for oversight of thousands of investment advisers with assets of $25 million to $100 million. Those advisers will no longer be overseen by the SEC. While it has been reported that the regulatory track record in many states is not too good, that’s not the case in Alabama. Joe Borg and his staff have done a tremendous job.
In contrast to securities regulators in many states around the country, the budget for the Alabama Securities Commission, which only has 49 employees, increased for the current fiscal year. This increase will allow the Commission to add three employees to handle the investment-adviser work being outsourced by Washington. Hopefully, that will be enough to get the job done. It should be noted that the agency funds its operations from license fees and fines, contributing $12.5 million to the state in fiscal 2010 and ordering the repayment of slightly more than $1 million to alleged fraud victims.
Since Joe is appointed by the agency’s commissioners, he is relatively immune to political pressures and that’s good. Since Joe is serving under his fifth Alabama Governor, that pretty well tells us that the Commission has done its job well. State court judges in Alabama have followed Joe’s belief that white-collar felonies should be prosecuted just as aggressively as street crime. We wish Joe the very best as he undertakes additional duties.
Source: Wall Street Journal
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