Audit criticizes Utah Division of Securities
But the leader of the Department of Commerce, which includes the division, says steps to correct most of the deficiencies cited in the audit have been implemented, except for one that will require legislative action.
The audit report said concerns raised by people investigated by the division involved "procedural errors, an alleged overzealous pursuit of securities violations, and the perception that those investigated do not receive fair treatment" — all of which were "heightened" by personnel conflicts within the division.
"These concerns appear to be a result of the division not following established policies and procedures," the audit report states. "Case management is inconsistent and, at times, appears inappropriate...The division has significant authority, but its credibility depends on using that authority judiciously."
A pair of legislators requested the audit, in part because of controversy over the division's handling of a securities-fraud investigation. The auditors looked at more than 20 cases the division handled in recent years.
In a letter included in the audit report, Francine Giani, executive director of the Commerce Department, listed ways that the audit recommendations already have been implemented.
"There were a number of recommendations that have been made by the audit," Giani told the Deseret News. "We have done them all. We have made the changes that have been requested, except for one which requires a legislative change, and we have a sponsor for a bill to change the way the board is structured, and we will do that next session."
Complaints about the division included that it "used intimidation to coerce cooperation and violated settlement agreements" forged with people it investigated, according to the audit report.
Rep. Jim Bird, R-West Jordan, who requested the audit, said most of the report's findings were expected.
"The audit, I think, has come back and said, 'You know, there's a huge problem in the Division of Securities, and it's going to take some huge problem-solving people to fix them.' And it also indicates it's going to take some legislation to fix the advisory council," Bird said.
Recent comments
The story isn’t in interviewing Francine and giving her the press...
FPlnrsAgnstGovtFraud | July 5, 2008 at 4:02 p.m.
The story isn’t in interviewing Francine and giving her the press...
FPlnrsAgnstGovtFraud | July 5, 2008 at 4:01 p.m.
To the Member of the Securities Advisory Board: Where were you when...
FPlnrsAgnstGovtFraud | July 5, 2008 at 3:12 p.m.
