TRENTON, N.J. (Legal Newsline) — New Jersey Attorney General Gurbir S. Grewal and Bureau of Securities Chief Christopher W. Gerold announced May 7 that they will urge Congress to oppose a bill could allegedly weaken states’ rights when it comes to protecting investors from securities fraud.
Grewal and Gerold drafted a letter to the House Committee on Financial Services and the subcommittee on capital markets. In the letter, they argue that the federal Securities Fraud Act of 2018 would restrict New Jersey’s ability to enforce its own laws and recover funds for investors.
“New Jersey’s Bureau of Securities encounters cases like these on a regular basis and strives to ensure that our State’s law-abiding residents recover their savings when they fall victim to such fraud,” Grewal and Gerold wrote in their letter. “The federal Securities and Exchange Commission cannot respond effectively to frauds like these on its own – they are too common and widespread. Preempting states’ traditional authority to regulate securities fraud therefore would leave New Jersey residents vulnerable to fraudsters who know the federal government does not have the resources necessary to police their unlawful conduct.”