How State Securities Laws Are Enforced by NASAA

How State Securities Laws Are Enforced by NASAA
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⚖️ NASAA and State Enforcement of Securities Laws
The North American Securities Administrators Association (NASAA) represents state securities regulators in the U.S., Canada, and Mexico. In the U.S., state securities laws (also known as Blue Sky Laws) are enforced by each state’s securities administrator, often with guidance and coordination from NASAA.

🛡️ Key Roles in Enforcement

🔍 1. Investigation of Violations

State securities administrators have the authority to:

• Subpoena witnesses and documents
• Investigate complaints of fraud or unethical behavior
• Initiate enforcement actions even before fraud is completed (preemptive power)

⚠️ 2. Issuing Cease-and-Desist Orders

Administrators can issue cease-and-desist orders without a prior hearing to stop suspected violations immediately.

🧾 3. Administrative Actions

States can take administrative action against:

• Broker-dealers and investment advisers
• Agents and IARs
• Securities issuers

Penalties include:

• Suspension or revocation of registration
• Civil fines
• Censure or bar from the industry

👨‍⚖️ 4. Civil and Criminal Enforcement

State administrators may pursue:

• Civil penalties in state courts
• Criminal charges through cooperation with local attorneys general or prosecutors

Penalties can include fines and imprisonment, particularly for intentional fraud.

📚 5. Registration Oversight

Administrators enforce:

• Registration of securities offerings (unless exempt)
• Licensing of broker-dealers, agents, IA firms, and IARs
• Disclosure of material information to investors

They also review filings for compliance with the Uniform Securities Act (USA).

🤝 6. NASAA’s Support Role

While NASAA doesn’t directly enforce laws, it:

• Develops model rules (e.g., suitability, unethical business practices)
• Provides training and coordination for state regulators
• Maintains uniformity across jurisdictions
• Administers exams like Series 63, 65, and 66 in partnership with FINRA

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Our Series 63, 65, and 66 prep courses at FINRA Exam Mastery help you understand how NASAA and state regulators protect investors, enforce rules, and maintain ethical markets.

🎯 Know the law. Pass the exam. Protect the public.