Arkansas Investment & Securities Laws

The passage of two key laws in the 1930’s gave the SEC directly, and through its oversight of the NASD and the various Exchanges, the power to be the primary enforcer of the nation's securities laws. Still, each individual state has its own securities laws and rules known as "Blue Sky Laws". The goal of the Blue Sky laws is to regulate the offering and sale of securities to protect the public from fraud. The first Blue Sky laws were created in Kansas in 1911. All of the continental United States except for Nevada adopted them. Later on the Blue Sky Laws were revised to resemble the Uniform Securities Act. Subsequent SEC and NASD regulations superseded and eliminated duplications between state and federal laws.

While laws vary from state to state, the Blue Sky laws require registration of securities offerings, and registration of brokers and brokerage firms. Each state has a regulatory agency that administers securities law, typically known as the state Securities Commissioner. In Arkansas the regulatory body is the Arkansas Securities Department. They handle registration and exemptions for broker dealers and other investment professionals in the state of Arkansas.

Fraud issues are most often adjudicated by the SEC, NASD, and NYSE, however the states also have the power and authority to bring actions against securities violators pursuant to state law. Arkansas’ version of the Blue Sky law is known as the Arkansas Securities Act which regulates the offer and sale of securities as well as the registration and reporting requirements for broker-dealers and individual stock brokers doing business in the state, as well as investment advisers seeking to offer their investment advisory services in the state. One of the provisions of the Arkansas Securities Act is defining when Arkansas securities law is invoked since the purchaser and seller of the security do not have to be in Arkansas for it to be an Arkansas transaction.

Recently, federal legislation was enacted (which except for the notice and filing requirements) limits the ability of the states to review, limit or otherwise restrict the sale of most securities. State regulators can still initiate fraud actions and conduct investigations.

If you have questions about Arkansas securities law as either an investment professional or a customer you should contact our law firm for assistance, toll-free at 1-877-382-9734, or complete our web form.