Inspectorial Powers
Categories: Accounting, Regulations
We’ve all heard of the SEC, right? The Securities and Exchange Commission? Their job is to make sure that everyone in the trading and investment world plays nice and abides by the rules. They’re regulators. Kind of like Nate Dogg and Warren G.
But the SEC’s reach can only extend so far. When it comes to monitoring and handling what goes on in individual states, that’s up to the states themselves. Luckily, they’ve got the Uniform Securities Act, which is pretty much like a blueprint that states can follow to stay on top of securities happenings within their own borders. And one of the most powerful parts of the Uniform Securities Act is that it gives those states inspectorial powers, which means they have the right to investigate act violations.
When states develop their own securities laws (i.e., anti-fraud, rules of disclosure, investor protection, etc.), those laws are called Blue Sky laws. Even though they’re usually based on that Uniform Securities Act blueprint we mentioned, they are state laws, which means that when the cider hits the fan, it’s state authorities who investigate. Inspectorial powers give them the right to do so.
Turn head. Cough.