Existing law establishes the Uniform Securities Act, which sets forth provisions governing the sale and purchase of securities in this State in a manner consistent with federal laws and regulations. In general, the Act prohibits a person from engaging in certain deceptive acts, practices or courses of business in connection with the offer, sale or purchase of a security. (NRS 90.570-90.610) The Act also authorizes certain sanctions against a person who violates these prohibitions, including civil penalties, criminal fines and payment of restitution. (NRS 90.630, 90.640, 90.650) The Nevada Constitution entitles a victim of a crime to full and timely restitution and requires all monetary payments, money and property collected from any person ordered to make restitution be first applied to pay the amounts ordered as restitution to the victim. (Nev. Const. Art. 1, § 8A) Section 6 of this bill creates the Fund for the Compensation of Victims of Securities Fraud and requires that the money in the Fund be used for the compensation of certain victims to whom restitution is owed. Section 2 of this bill defines the term “Fund” to mean the Fund for the Compensation of Victims of Securities Fraud. Section 3 of this bill: (1) establishes the process by which certain persons to whom a court orders restitution may apply for and receive compensation from the Fund; (2) authorizes an applicant to appeal a determination made concerning an award of compensation from the Fund; and (3) makes confidential certain information and documentation submitted in connection with such an application. Section 9 of this bill makes a conforming change relating to the information made confidential pursuant to section 3. Section 4 of this bill requires the Securities Division of the Office of the Secretary of State to adopt certain regulations relating to the Fund, including regulations: (1) establishing eligibility requirements for an award of compensation from the Fund; (2) prescribing certain other requirements relating to the award of compensation from the Fund; and (3) establishing a procedure to appeal a determination made concerning an award of compensation from the Fund. Section 5 of this bill requires the Administrator of the Division to prepare and submit a biennial report to the Legislature that includes certain information relating to the Fund. Section 6 requires the Division to prepare certain quarterly estimates concerning the Fund and requires any money remaining in the Fund at the end of each fiscal year to be carried over to the next fiscal year. Section 7 of this bill: (1) requires an applicant, as a condition of accepting an award of compensation from the Fund, to take certain action if the applicant recovers unpaid restitution after receiving such compensation; and (2) prescribes certain other conditions of accepting an award of compensation from the Fund. Existing law requires all money received by the Division or the Administrator pursuant to the Act to be deposited in the State General Fund. (NRS 90.630, 90.650, 90.710) Section 8 of this bill requires all money received by the Administrator as a result of an enforcement action relating to securities to be deposited with the State Treasurer for credit to the Fund.

Statutes affected:
As Introduced: 90.710, 239.010
Reprint 1: 90.710, 239.010
BDR: 90.710, 239.010