Governor agrees to temporary postponement of new law
SEC regulations must follow or State law will be enforced
Salt Lake City - Utah Governor Jon Huntsman agreed Friday to a temporary postponement of the implementation of recent amendments to Utah's securities laws in order for federal regulators to construct and put into place a similar solution at the national level. If the issue has not been addressed nationally by June 2007, Utah will implement the law.
"While we have agreed to temporarily delay the implementation of this law, we still have every intent to fight against the abuses that may be occurring in the securities industry * abuses which likely have harmed Utah companies," Governor Huntsman said. "Certainly an aggressive, national solution is the best way to solve this problem. Now that the SEC and Congress are willing to look at the issue, we must allow them time to address these abuses on a national scale without subjecting the State of Utah to a costly legal process that ultimately would delay any real solutions."
These amendments, adopted in a special session of the legislature earlier this year, were to take effect October 1 and would have required securities brokerage firms to report to the State Division of Securities information on all stock transactions for Utah-based companies that failed to settle their short stock positions on a timely basis.
The Securities Industry Association filed a lawsuit on July 28, challenging the State's power to implement the law, arguing only the federal government has the authority to regulate such conduct. The SIA sought to prevent Utah from implementing the statute. Rather than engage in a protracted and expensive court battle about implementation, the State decided to delay the issues in the case and to prudently await the outcome of contemplated SEC action in the area.
"It is important to understand, we have the best interests of Utah and Utah businesses in mind and we will do everything to protect them," Governor Huntsman continued. "If the SEC does not do the right thing and follow through on proposed changes to the federal regulations to provide fairness and transparency in our national markets, the State of Utah is ready, willing, and able to resume the fight against these abuses."
Since Utah's law was enacted in May, there have been several significant steps made in the development of a national solution with the same goals as the Utah law. Utah was the first state to take a strong stand against perceived market manipulation caused by naked short selling.
"The State of Utah and our elected officials should be proud that we have led the way in shining a national spotlight on these illegal and harmful practices."