State Legislators Consider Updating '73 Securities Law; the Proposal Calls for Stronger Investment Protections

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Byline: VICKY ECKENRODE

ATLANTA - When the state's securities law went into effect in 1973, most people did not own 401(k) plans, and no one had even heard of Internet stock trading.

It might be time to update the Georgia Securities Act, legislators said this week.

The act outlines how investment advisers, dealers and anyone else who sells investments are to register with the state. It also spells out the types of disclaimers that must be given to investors and the rights individuals have when buying securities.

Members of the Senate Banking and Financial Institutions committee looked over a draft document they expect to evolve into a bill when the General Assembly reconvenes early next year.

The 103-page proposal calls for significantly raising criminal penalties and fines should security dealers run afoul of the law.

"Part of the idea is to have stronger investment protections now that so many people have investments," said Sen. Bill Hamrick, R-Carrollton.

Hamrick, who chairs the banking committee, said he plans to introduce the bill next year.

He is floating the idea months ahead of time because he knows a number of groups, including lawyers, brokers and investors, will want to weigh in with suggestions and potential changes.

Hamrick said he did not want an unexpected controversy to scuttle the bill, which is what happened three years ago when the revision last appeared.

VARIABLE ANNUITIES

Former Sen. Charlie Tanksley, R-Marietta, introduced an update to the state securities law but also proposed regulating variable annuities.

A variable annuity is a sort of hybrid investment between a mutual fund and a life insurance policy.

The possibility of sparking a territorial argument between the state insurance officials and the Secretary of State's Office, which regulates securities, was enough to convince Hamrick to avoid the issue altogether this time. …