The Texas Securities Act
Shepherd Smith Edwards & Kantas LTD LLP is a securities law firm with its primary office located in Houston, Texas. We have a team of attorneys, consultants and staff with more than 100 years of combined experience in the securities industry and in securities law. Since 1990, we have represented thousands of investors nationwide to recover losses. We have represented clients in Federal and State courts and in arbitration through the Financial Industry Regulatory Authority (FINRA), the New York Stock Exchange Inc. (NYSE), the American Arbitration Association (AAA) and in private arbitration actions. Collectively, we have represented over 1,000 investors over the last 18 years in negotiation, mediation, arbitration and litigation.
For the benefit of our Texas clients and those seeking information about the Texas Securities Act, we are including it on our Texas website:
THE TEXAS SECURITIES ACT
(As Amended, Including All Amendments Effective as of June 19, 2009)
Sec. 1. Short Title of Act.
This Act shall be known and may be cited as "The Securities Act."
Sec. 2. Creating the State Securities Board and Providing for Appointment of Securities Commissioner.
A. The State Securities Board is hereby created. The Board shall consist of five citizens of the state appointed by the governor with the advice and consent of the Senate. Members of the Board serve for staggered terms of six years, with as near as possible to one-third of the members' terms expiring January 20 of each odd-numbered year. Vacancies shall be filled by the Governor for the unexpired term. Members shall be eligible for reappointment. Appointments to the Board shall be made without regard to the race, color, disability, sex, religion, age, or national origin of the appointees.
B. Board members must be members of the general public. A person is not eligible for appointment as a member if the person or the person's spouse:
(1) is registered as a dealer, agent, investment adviser, or investment adviser representative;
(2) has an active notice filing under this Act to engage in business in this state as an investment adviser or investment adviser representative;
(3) is employed by or participates in the management of a business entity engaged in business as a securities dealer or investment adviser; or
(4) has, other than as a consumer, a financial interest in a business entity engaged in business as a securities dealer or investment adviser.
C. Repealed. House Bill 2255, Acts of the 77th Legislature, Regular Session, 2001.
D. Each member of the Board is entitled to per diem as set by legislative appropriation for each day that the member engages in the business of the Board. The Governor shall designate a member of the Board as the presiding officer of the Board to serve in that capacity at the will of the Governor. A majority of the members shall constitute a quorum for the transaction of any business.
E. It is a ground for removal from the Board that a member:
(1) does not have at the time of taking office the qualifications required by Subsection A or B of this section for appointment to the Board;
(2) does not maintain during service on the Board the qualifications required by Subsection A or B of this section for appointment to the Board;
(3) is ineligible for membership under Subsection B of this section or Subsection B or C of Section 2-1 of this Act;
(4) cannot, because of illness or disability, discharge the member's duties for a substantial part of the member's term; or
(5) is absent from more than half of the regularly scheduled Board meetings that the member is eligible to attend during a calendar year without an excuse approved by a majority vote of the Board.
F. The validity of an action of the Board is not affected by the fact that it is taken when a ground for removal of a Board member exists. If the Commissioner has knowledge that a potential ground for removal exists, the Commissioner shall notify the presiding officer of the Board of the potential ground. The presiding officer shall then notify the Governor and the attorney general that a potential ground for removal exists. If the potential ground for removal involves the presiding officer, the Commissioner shall notify the next highest ranking officer of the Board, who shall then notify the Governor and the attorney general that a potential ground for removal exists.
G. The Board shall appoint a Securities Commissioner who serves at the pleasure of the Board and who shall, under the supervision of the Board, administer the provisions of this Act. Each member of the Board shall have access to all offices and records under his supervision, and the Board, or a majority thereof, may exercise any power or perform any act authorized to the Securities Commissioner by the provisions of this Act.
H. The Commissioner, with the consent of the Board, may designate a Deputy Securities Commissioner who shall perform all the duties required by law to be performed by the Securities Commissioner when the said Commissioner is absent or unable to act for any reason. The Commissioner shall appoint other persons as necessary to carry out the powers and duties of the Commissioner under this Act and other laws granting jurisdiction or applicable to the Board or the Commissioner. The Commissioner may delegate to the other persons appointed under this subsection powers and duties of the Commissioner as the Commissioner considers necessary.
I. Repealed. House Bill 2376, Chapter 285, Acts of the 78th Legislature, Regular Session, 2003.
J. On or before January 1 of each year, the Board, with the advice of the Commissioner, shall report to the Governor and the presiding officer of each house of the Legislature as to its administration of this Act, as well as plans and needs for future securities regulation. The report must include a detailed accounting of all funds received and disbursed by the Board during the preceding year.
K. The Commissioner or his designee shall develop an intraagency career ladder program, one part of which shall be the intraagency posting of all nonentry level positions for at least ten (10) days before any public posting. The Commissioner or his designee shall develop a system of annual performance evaluations based on measurable job tasks. All merit pay for Board employees must be based on the system established under this section.
L. The Board shall prepare information of consumer interest describing the regulatory functions of the Board and Commissioner and describing the Board's and Commissioner's procedures by which consumer complaints are filed with and resolved by the Board or Commissioner. The Board shall make the information available to the general public and appropriate state agencies. There shall be prominently displayed at all times in the place of business of each dealer, agent, investment adviser, or investment adviser representative regulated under this Act, a sign containing the name, mailing address, and telephone number of the Board and a statement informing consumers that complaints against a dealer, agent, investment adviser, or investment adviser representative may be directed to the Board.
M. The financial transactions of the Board are subject to audit by the state auditor in accordance with Chapter 321, Government Code.
N. The Board and Commissioner are subject to Chapters 551, 2001, and 2002, Government Code.
O. The State Securities Board is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the board is abolished and this Act expires September 1, 2013.