The AAR Public Policy Team attended the Alabama Securities Commission (ASC) quarterly meeting on June 4, 2019. Since their last meeting, a new commissioner joined the ASC. W. Allen Carroll, Jr., an accountant from Mobile, was selected for appointment by Governor Kay Ivey and approved by the Alabama Senate on May 2, 2019. Commissioner Carroll replaces James Hart, who was term-limited. 

Summary of the Commission Meeting

Joseph “Joe” Borg, Director of the ASC, provided a quarterly report on the Commission’s activities, including an update on ASC expenditures and receipts, as well as recent meetings between ASC and federal financial services industry regulators. In addition, Director Borg provided an update on the ASC’s legislative agenda from the 2019 session. 

ASC’s 2019 Legislative Agenda

A major piece of legislation the ASC supported this session was a bill establishing the crime of aggravated theft. Aggravated theft is defined as theft of funds, cash, or cash equivalent including stocks, bonds, or retirement accounts which exceeds $200,000 in value, if obtained by deception. Theft of public funds exceeding $100,000 if obtained by deception would also qualify as aggravated theft. The crime is classified as a felony, carrying a maximum of 30 years’ imprisonment.  The creation of this criminal offense is meant to deter large-scale monetary fraud of any type, including that which is done electronically. Companion versions of the legislation were introduced by Rep. Chris Sells (R-Greenville) and Sen. Greg Albritton (R-Atmore). Ultimately, Rep. Sells’ bill (HB 57) passed both houses of the legislature and was enacted as Act 2019-513.  

The ASC also engaged on HB 180(titled “Lisa’s Law”), introduced by Rep. Proncey Robertson (R-Mount Hope). This bill provides a procedure for collecting funds or property from an individual convicted of a felony involving moral turpitude to compensate the victim or victims of that crime. The legislation mandates that notice must be provided to the ASC by any person who pays profits related to the crime to the convicted individual that such funds have been disbursed once the payor discovers that the funds are derived from the crime. Victims can sue to seek restitution and money damages from the convicted individual, and the ASC can seek attachment of such funds on behalf of the victims as well. 

A provision was removed from the legislation as originally introduced stating that funds generated from the convicted individual’s reenactment of the crime in a movie, book, or similar medium were subject to the victim’s restitution. Director Borg stated that such a provision might be reintroduced in the next legislative session. HB 180 was enacted as Act 2019-538.

Alabama Securities Commission Background

The ASC is responsible for the enforcement of laws governing securities transactions in Alabama. It administers the Alabama Securities Act (“the Act”), which regulates the activities of securities broker-dealers, agents, investment advisers, and financial planners in Alabama.[i]The ASC also directs enforcement actions against persons who have violated the Act or other state and federal laws to the detriment of Alabama investors.[ii]