The Georgia General Assembly has passed Senate Bill 284, which significantly expands the Georgia Securities Commissioner’s enforcement powers under the Georgia Uniform Securities Act of 2008 and now awaits Governor Brian Kemp’s signature.
Key Provisions of SB 284
SB 284 introduces a new enforcement tool. The Commissioner may now order violators to return investors’ principal investment amounts, along with any fees or other monies collected for securities purchases, when an entity or individual violates Georgia’s existing prohibitions on securities fraud, including:
- Employing deceptive schemes to defraud, making false or misleading statements about material facts, or engaging in other fraudulent conduct involving securities transactions.
- Engaging in fraudulent conduct as a paid investment adviser.
- Filing false or misleading records under the Georgia Uniform Securities Act.
Those who materially aid in these violations may also be subject to restitution orders from the Commissioner.
Prior Enforcement Limitations
Prior to SB 284, the Commissioner’s administrative enforcement authority was largely limited to three remedies: (1) issuing cease-and-desist orders; (2) denying, suspending, revoking, or conditioning exemptions for broker-dealers and investment advisers; and (3) imposing civil penalties. While the Commissioner previously had authority to seek rescission, restitution, or disgorgement through court proceedings, this required initiating litigation and obtaining a court order.
SB 284 now empowers the Commissioner to order restitution directly through administrative proceedings, bypassing the need for court action and thereby potentially accelerating recovery for investors. The civil penalty caps remain unchanged at up to $50,000 for a single violation or up to $500,000 for more than one violation.
Conclusion
SB 284 represents a meaningful expansion of the Georgia Securities Commissioner’s enforcement toolkit. The bill awaits Governor Kemp’s signature and, if signed, will become effective upon approval.
If you have questions about how SB 284 may impact your business, please reach out to Alston & Bird or any member of our Securities Litigation team. Alston & Bird will continue to monitor this legislation and provide updates as it progresses.
If you have any questions, or would like additional information, please contact one of the attorneys on our Securities Litigation team.
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