Aug. 10, 2023
Salem – The Oregon Division of Financial Regulation (DFR) continues to fight for consumers and investors with the passage of House Bill 2274, which bolsters the division's enforcement tools in dealing with securities fraud.
Oregon securities law currently employs three core mechanisms to shield investors from potential harm:
- Mandatory registration: A security must be registered with the Department of Consumer and Business Services (DCBS), which includes DFR, before the offer or sale in Oregon, subject to specified conditions.
- Licensing requirements: Individuals engaged in selling securities or providing investment advice must be licensed by the state as a broker-dealer, salesperson, investment advisor, or investment advisor representative, unless exemptions or exclusions apply.
- Prohibition of misleading statements: The law prohibits making false or misleading statements in connection with the sale or purchase of securities in Oregon.
HB 2274, which the Oregon Legislature passed in the 2023 session and Gov. Tina Kotek recently signed into law, has two key provisions to enable DFR to better protect consumers and investors:
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Restitution: The bill grants the division authority to order restitution to investors harmed by violations of the securities law. This enhancement enables DFR to better protect investors by ensuring that wrongdoers compensate those adversely affected.
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Enhanced civil penalties: The bill authorizes civil penalties for securities law violations, with a maximum penalty of $60,000 for each violation. The higher penalties apply when the victim is considered a vulnerable person, including elderly individuals and those with financial incapability, incapacitation, or specific disabilities. Given the increasing vulnerability of the elderly population to securities fraud, this bill aims to deter violations and provide stronger protection for Oregon's most susceptible investors.
HB 2274 also includes provisions to enhance DFR's oversight and enforcement authority over the securities industry, including requiring prompt and truthful responses from subjects under investigation for securities violations.
“House Bill 2274 will lead to more effective enforcement of the Oregon securities laws and contribute to a safer investment environment for consumers and investors across the state," said DFR Administrator TK Keen. “This bill is a big win in giving us the tools needed to protect vulnerable people and take on fraud."
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About Oregon DFR: The Division of Financial Regulation is part of the Department of Consumer and Business Services, Oregon's largest business regulatory and consumer protection agency. Visit
dfr.oregon.gov and
www.dcbs.oregon.gov.