Section 23-19-6-1 - Securities division; securities commissioner; unlawful use of nonpublic information; investor education initiatives; securities division enforcement account; securities restitution fund; assistance from attorney general; police powers(a) This article shall be administered by a division of the office of the secretary of state. The secretary of state shall appoint a securities commissioner who shall be responsible for the direction and supervision of the division and the administration of this article under the direction and control of the secretary of state. The salary of the securities commissioner shall be paid out of the funds appropriated for the administration of this article. The commissioner shall serve at the will of the secretary of state.(b) The secretary of state: (1) shall employ a chief deputy, attorneys, a senior investigator, a senior accountant, and other deputies, investigators, accountants, clerks, stenographers, and other employees necessary for the administration of this article; and(2) shall fix their compensation with the approval of the budget agency.(c) It is unlawful for the commissioner or an officer, employee, or designee of the commissioner to use for personal benefit or the benefit of others records or other information obtained by or filed with the commissioner that is not public under section 7(b) of this chapter. This article does not authorize the commissioner or an officer, employee, or designee of the commissioner to disclose the record or information, except in accordance with section 2, 7(c), or 8 of this chapter.(d) This article does not create or diminish a privilege or exemption that exists at common law, by statute or rule, or otherwise.(e) Subject to IC 4-2-6-15, the commissioner may develop and implement investor education initiatives to inform the public about investing in securities, with particular emphasis on the prevention and detection of securities fraud. In developing and implementing these initiatives, the commissioner may collaborate with public and nonprofit organizations with an interest in investor education. The commissioner may accept a grant or donation from a person that is not affiliated with the securities industry or from a nonprofit organization, regardless of whether the organization is affiliated with the securities industry, to develop and implement investor education initiatives. This subsection does not authorize the commissioner to require participation or monetary contributions of a registrant in an investor education program.(f) The securities division enforcement account is established. Except as provided in subsection (o), fees and funds of whatever character accruing from the administration of this article shall be accounted for by the secretary of state and shall be deposited with the treasurer of state to be deposited by the treasurer of the state in either the state general fund or the securities division enforcement account. Subject to IC 4-2-6-15, expenses incurred in the administration of this article shall be paid from the state general fund upon appropriation being made for the expenses in the manner provided by law for the making of those appropriations. The following shall be deposited by the treasurer of state in the securities division enforcement account: (1) Grants and donations received under subsection (e).(2) Costs of investigations recovered under section 4(e) of this chapter.(3) Fifty percent (50%) of the first four million dollars ($4,000,000):(A) of a civil penalty recovered under section 3(b) or 4(d) of this chapter;(B) recovered in a settlement of an action initiated to enforce this article; or(C) awarded as a judgment in an action to enforce this article.(g) The following shall be deposited by the treasurer of state in the state general fund: (1) Fifty percent (50%) of the first four million dollars ($4,000,000):(A) of a civil penalty recovered under section 3(b) or 4(d) of this chapter;(B) recovered in a settlement of an action initiated to enforce this article; or(C) awarded as a judgment in an action to enforce this article.(2) Any amount exceeding four million dollars ($4,000,000):(A) of a civil penalty recovered under section 3(b) or 4(d) of this chapter;(B) recovered in a settlement of an action initiated to enforce this article; or(C) awarded as a judgment in an action to enforce this article.(3) Subject to subsection (o), other fees and revenues that are not designated for deposit in the securities division enforcement account or the securities restitution fund.(h) Notwithstanding IC 23-2-2.5-34, IC 23-2-2.5-43, IC 23-2.5-2, IC 23-19-4-12, IC 25-11-1-15, and this chapter, five percent (5%) of funds received for deposit in the securities division enforcement account shall instead be deposited in the securities restitution fund established by IC 23-20-1-25. Subject to IC 4-2-6-15, the funds deposited in the enforcement account shall be available, with the approval of the budget agency:(1) to augment and supplement the funds appropriated for the administration of this article; and(2) for grants and awards to nonprofit entities for programs and activities that will further investor education and financial literacy in the state. The funds in the enforcement account do not revert to the state general fund at the end of any state fiscal year.
(i) In connection with the administration and enforcement of this article, the attorney general shall render all necessary assistance to the commissioner upon the commissioner's request, and to that end, the attorney general shall employ legal and other professional services as are necessary to adequately and fully perform the service under the direction of the commissioner as the demands of the securities division shall require. Expenses incurred by the attorney general for the purposes stated in this subsection shall be chargeable against and paid out of funds appropriated to the attorney general for the administration of the attorney general's office. The attorney general may authorize the commissioner and the commissioner's designee to represent the commissioner and the securities division in any proceeding involving enforcement or defense of this article.(j) Neither the secretary of state, the commissioner, nor an employee of the securities division shall be liable in their individual capacity, except to the state, for an act done or omitted in connection with the performance of their respective duties under this article.(k) The commissioner shall take, prescribe, and file the oath of office prescribed by law. The commissioner, chief deputy commissioner, and each attorney or investigator designated by the commissioner are police officers of the state and shall have all the powers and duties of police officers in making arrests for violations of this article, or in serving any process, notice, or order connected with the enforcement of this article by whatever officer, authority, or court issued and shall comprise the enforcement department of the division and are considered a criminal justice agency for purposes of IC 5-2-4 and IC 10-13-3.(l) The provisions of this article delegating and granting power to the secretary of state, the securities division, and the commissioner shall be liberally construed to the end that: (1) the practice or commission of fraud may be prohibited and prevented;(2) disclosure of sufficient and reliable information in order to afford reasonable opportunity for the exercise of independent judgment of the persons involved may be assured; and(3) the qualifications may be prescribed to assure availability of reliable broker-dealers, investment advisers, and agents engaged in and in connection with the issuance, barter, sale, purchase, transfer, or disposition of securities in this state. It is the intent and purpose of this article to delegate and grant to and vest in the secretary of state, the securities division, and the commissioner full and complete power to carry into effect and accomplish the purpose of this article and to charge them with full and complete responsibility for its effective administration.
(m) Copies of any statement and documents filed in the office of the secretary of state and of any records of the secretary of state certified by the commissioner shall be admissible in any prosecution, action, suit, or proceeding based upon, arising out of, or under this article to the same effect as the original of such statement, document, or record would be if actually produced.(n) IC 4-21.5 and any rules of practice adopted by the securities division are applicable to administrative proceedings under this article.(o) Notwithstanding any other law, two percent (2%) of funds received for deposit in the state general fund as described in subsection (g)(3) shall instead be deposited in the securities restitution fund established by IC 23-20-1-25.Amended by P.L. 156-2023,SEC. 13, eff. 7/1/2023.Amended by P.L. 175-2019,SEC. 3, eff. 7/1/2019.Amended by P.L. 39-2016, SEC. 2, eff. 7/1/2016.Amended by P.L. 160-2015, SEC. 6, eff. 7/1/2015.Amended by P.L. 2-2014, SEC. 103, eff. 3/13/2014.Amended by P.L. 205-2013, SEC. 338, eff. 7/1/2013.Amended by P.L. 92-2013, SEC. 80, eff. 7/1/2013.Amended by P.L. 85-2012, SEC. 4, eff. 7/1/2012.As added by P.L. 27-2007, SEC.23. Amended by P.L. 114-2010, SEC.10.