It's to bad this departments head had issues with certain brokers/advisors/firms because of something "personal". The word on the street was they fabricated and made up violations and threatened advisors/firms to make a name for themselves and make them look good to there boss'. If they would spend their time going after those in our industry who are doing things wrong we would all be better off.

What this article didn't point out is the division never lost a case--ever, since they are both judge and jury, until one of those wrongly accused by the department decided to fight back. He has now gone through three legal actions and has been found innocent three times and is facing a fourth day in court at the state supreme court because the state has unlimited resources and is very pissed to lose three times--doesn't matter if the man is innocent and has been absolutely proven innocent three different times!!

The securities department will lose again.

Whatever happened to innocent until proven guilty?

Thank God for Jim Bird and his determination to clean up the securities dept.s "Kangaroo Court" and sweetheart relationships. His district should be very proud of his astute representation of them. I can only wish other legislators could be as concerned for what is right as Rep. Bird.

Thanks Jim for a job very well done!

Hmm, acting just acting like the DABC bully boys. Thanks Reps. Bird and Oku for trying to keep state agencies from running amok.

What's even more discouraging is that the Auditors office basically dismissed the whole thing. They simply require Francine to present her new 'policies and procedures' to the legislative auditor general's office.

The office of the legislative auditor general basically swept the whole thing under the rug. i'm disgusted with the utah divisions of securities. the audit revealed so much, but the legislative auditor general's office asked francine two questions...?! two?! nothing toward employees lawyering up? the division being in disarray, wayne klein's resignation, UDS violating settlement terms....c'mon. i know it's a long weekend but do your job!!!

btw- no follow up appointment was actually scheduled.

Seems like the directors (former and current) are playing off the audit as no big deal and one-sided. From my experience with the division the findings are spot on. Too bad it's just a report and doesn't carry the weight of a mandate to ensure change:(

As a member of the Division of Securities Advisory Board, I am dismayed that the commenters are so hasty to believe the audit at face value and condemn fraud prosecutions. The audit was indeed instigated by affiliates of those accused--with justification--of wrongdoing. Of course, this alone doesn't mean the audit was flawed, but as Ms. Giani points out, no investors (who lost millions) were interviewed. Utah is a consistent leader in many areas of fraud. Where is the concern for investors? Where is the outrage regarding the number of people devastated by securities fraud? To claim that the state has unlimited resources is ridiculous. No state can possibly keep up with the instances of fraud committed within its borders. Convicting innocent people is obviously wrong, but to accuse the Division of overstepping its bounds is to ignore the reality of securities fraud and abuse in this state.

Looks like Big Brother's been at it again. Thanks Birdman--you rule!!!

The State of Utah never admits defeat
The Judicial system is broken
Once those that are accused get released
The fines are never returned to the rightful people
The State is running on every dime they can steal
Utah is the most dishonest State of 4 I have lived in
Utahn's are under attack by the State Always
The People are kept ignorant

I would not dare put my name on this comment. Don't want to be on the "hit list." The UDS is out of control. The audit will probably not change anything. Despite what Mr. Klein says in the article the goal of the UDS seems to be to prevent the formation of any business entities based in our State.
We operate a legitimate business. We have been in business for several years and operate with the highest of standards. We decided we needed to raise some capital to take our business to the next level. WOW! Our Utah based and licensed securities attorney very strongly suggested we move our company out of state and not attempt to raise any capital in Utah. I was shocked! I have always felt despite our tax structure Utah was business friendly. I guess not. We will probably be moving and taking our 100 plus high paying jobs with us. We can't risk pursuing capital formation activities in Utah. Here we could conform to ALL of the rules go the extra mile to protect our investors and still be railroaded by UDS years after the fact. Can't GUARANTEE success - it's called RISK capital.

A lot of rhetoric and stuff that I wouldn't want to deal with myself.

The comments here dismay me.

Utah is one of the fraud capitals on the planet and many if not most of the fraud scheme perps use bogus securities as part of "the deal."

While I believe that most people looking to "get rich quick" pretty much get what they deserve (which is nothing), how can people whine so loudly about regulators are at least trying to stem the tide of securities fraud in Utah?

I don't know any of the people involved in the audit, on either side, but I do know that there seems to be no limit to the securities shananigans in Utah and I'd rather have the securities regulators be tough than soft. Don't care shat the audit says!

I am involved with a business that is being investigated by the state. It is just like they say in the forum, there is no inocent until proven guilty. It's guilty until proven guilty. The article was right on when they mentioned threats. They don't freeze your account during an investigation they threaten that if you do anything that you "may go to jail".

I think it's about time that Jim Bird is getting some attention to this. They have way too much power. By the time they decide that they have nothing on you (Which I'm beginning to think will never happen), you have nothing left and have lost everything including your good name because you were not allowed to run your business during a witch hunt.

I too would not want to have my name on the hit list because I've already been there.

I have mixed emotions about all of this because I have also been a victim of fraud. But, I feel that I have also been a victim of the UDS.

I invested in a project (to be unnamed), and was threatened by the UDS. There were no unhappy investors in the project and no complaints excepting a disgruntled fired employee who had no money at risk. Apparently, because I was the largest investor and had resources, I was ordered by UDS to step up to the plate and fund a rescission offer for all of the other investors or risk going to jail myself. In the end, all of the investors who stayed in the project were hurt by all of the extra legal and accounting fees and time that were required by UDS.

The UDS never gives you a clean bill-of-health because they don't want the liability. They informed me that their best leads come from ex-business partners with an axe to grind and ex-spouses (low hanging fruit). It makes their job easier.

to the "Member of the Division of Securities Advisory Board" ... One of he many points of that audit was to reveal the abuse of power in the division! Prosecuting securities fraud is important provided fraud has ACTUALLY been committed. Just because investors lose money doesn't always mean fraud has been committed! Ifthat were the case every time the market took a down turn and people lost money, companies would have to be investigated for securities fraud. OF COURSE people who have lost money are going to blame anybody but themselves for the loss. The USD repeatedly commuted illegal acts in the name of investigating and prosecuting securities fraud that if anyone else had done would be considered FELONIES! This is not about whether pursuing fraud is bad...this is about everyone's equal rights under the law! This was an independent audit whose findings are very revealing! Shame on the governor who is the only one who currently oversees this department for allowing this kind of behavior!

How do we regulate the regulators????

I am one of those the USD is "concerned for", an investor who choose to invest. We started to hear rumors just before our world crashed down around us. We blame no-one else for our choices. We made them and we were not forced to do so. I was however kept on the phone for nearly 2 hrs one day as someone from the USD tried to coerce, through guided sophistry, information from me--names, phone numbers, etc. with implications of what would happen to the "wrong doers" as well as the settlement I would receive if I would help move along the investigation by providing information. If the rumors we heard are true--which this audit indicates, our family has been hurt, far more, by the USD and individuals who can't seem to take credit for their own choices, (through injustice, freezing of assets and the haulting of business practices), than we were ever hurt by those we chose to invest with, who by the way have continued--inspite of the persecutions they are under, to try and return their investors investments. Life is about learning lessons and serving each other, not blaming or falsely accusing others. Thanks Jim Bird--Keep it going!

To the Member of the Securities Advisory Board: Where were you when all this was going on?I know.You were rubber-stamping the fabricated allegations George put in front of you.For you to support Giani's comments about interviewing the investors that UDS saved millions for:You are endorsing her M.O. that "the ends justify the means" and that licensees are not entitled to "due process."Your comment is a red herring.The audit wasn't about criminal cases as much as about Admin.&Licensing run amuck.YOU ARE the problem!You are responsible!Get out!And put someone on the Board that respects the Constitutional protections of due process that, yes, even licensees are entitled to!YOU rubber-stamped what was going on under your nose!Lives are destroyed because you did not do your duty to respect the law.

The story isn’t in interviewing Francine and giving her the press to do her P.R. cover-up! By the comments to your articles, can’t you see that the “rest of the story” is still underground? That there’s basis for the findings of the audit? Stop the milk-toast reporting, and being the Giani’s watchdog.You can expose the flaws in her statements you so readily publish. Like the other day when she said the auditors should have questioned people who the UDS has saved millions for.What? That was a rationalization and admission of all the wrong-doing. She was basically saying, “Look fellas, see how much money we’ve saved? Now, don’t you agree ‘the ends justify the crooked means’? And that we’re justified in suspending the licensees’ due process rights while we fabricate cases against them?”Then today you let her get away with her comment about the auditors interviewing “accused violators is like interviewing convicts the police put in jail.” 1st. These were “accused” violators, and the UDS convicts” were from contrived and fabricated cases. 2nd, those the police put in jail were entitled to very strict due process limitations that protected their civil and constitutional rights.

The story isn’t in interviewing Francine and giving her the press to do her P.R. cover-up! By the comments to your articles, can’t you see that the “rest of the story” is still underground? That there’s basis for the findings of the audit? Stop the milk-toast reporting, and being the Giani’s watchdog.You can expose the flaws in her statements you so readily publish. Like the other day when she said the auditors should have questioned people who the UDS has saved millions for.What? That was a rationalization and admission of all the wrong-doing. She was basically saying, “Look fellas, see how much money we’ve saved? Now, don’t you agree ‘the ends justify the crooked means’? And that we’re justified in suspending the licensees’ due process rights while we fabricate cases against them?”Then today you let her get away with her comment about the auditors interviewing “accused violators is like interviewing convicts the police put in jail.” 1st. These were “accused” violators, and the UDS convicts” were from contrived and fabricated cases. 2nd, those the police put in jail were entitled to very strict due process limitations that protected their civil and constitutional rights.