Authority of the Administrator

There’s probably no one in this profession that you need to maintain a healthy fear of more than your state’s securities administrator. That’s because the administrator and those who work for this entity are empowered to enforce the securities laws of their state. They’re given a lot of latitude to investigate and take action against potential securities violations and are very proactive in making themselves visible and available to hear the public’s complaints. If a client files a complaint, you’re going to be under the microscope.

While regulators aren’t testing you on this exam as to whether you can do the administrator’s job, they do want to make sure you have a clear picture of who is overseeing your activities, the steps they can take to investigate complaints, and the remedies they can put in place to punish an adviser and protect the public. By knowing with whom you’re dealing and of what they’re capable, regulators hope that it will serve as a strong deterrent from both criminal activity and careless mistakes.

While a state’s securities administrator has a large amount of power, one of the role’s highest responsibilities is to coordinate with other state and federal agencies and offices. Most importantly, the administrator recommends cases for