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SMU Law Review





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The definitions, especially those relating to the issues of what constitutes a security, who may recover, and the territorial reach, determine the scope of the securities acts. The Fifth Circuit issued one decision concerning standing to sue under section 11 of the Securities Act of 1933.

The State Securities Board amended its form for public information charges and billing detail to reflect current fees for public information established by the Texas Building and Procedures Commission. The Board adopted new rules reorganizing the exemption for sales to financial institutions and certain institutional investors under the Texas Securities Act (“TSA”) and reconsidered two of its exemptions from registration. In addition, the Board took numerous enforcement actions against issuers who did not register their securities. Considering dealers, the Board amended its rules on both dealer and agent examinations and had numerous enforcement actions. In regard to investment advisors, it amended its rule concerning supervision by clarifying that supervisory systems must be in writing and registered investment advisors must be informed of their supervisory systems.

One of the major reasons legislature passed securities acts was to facilitate investors’ actions to recover their moneys through a simplified fraud action that removed the most difficult elements, namely scienter and privity. In the judicial system, the Texas Supreme Court reversed two intermediate appellate court opinions, another appellate court handed down an opinion involving the TSA and Texas Stock Fraud Act, and consumers brought several arbitration actions against brokers.

The Fraud provisions of the TSA are modeled on federal statutes. As a result, Texas courts frequently look to federal decisions in interpreting the TSA. The Fifth Circuit considered three cases involving the pleading requirements of the Private Securities Litigation Reform Act of 1995. The Fifth Circuit considered two class-action certifications involving the “fraud on the market theory.”

Recommended Citation

George Lee Flint, Jr., Texas Annual Survey: Securities Regulation, 59 S.M.U. L. Rev. 1541 (2006).

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