PROPOSED RULES
FINANCIAL INSTITUTIONS
(Securities Division)
Supplemental Notice to WSR 08-10-103.
Preproposal statement of inquiry was filed as WSR 08-01-128.
Title of Rule and Other Identifying Information: The rule making will create rules for administering the securities prosecution fund.
Hearing Location(s): Department of Financial Institutions, 150 Israel Road S.W., Tumwater, WA 98501, on July 15, 2008, at 2 p.m.
Date of Intended Adoption: July 16, 2008.
Submit Written Comments to: Jill M. Vallely, Securities Division, P.O. Box 9033, Olympia, WA 98507-9033, e-mail jvallely@dfi.wa.gov, fax (360) 704-7035, by July 15, 2008.
Assistance for Persons with Disabilities: Contact Carolyn Hawkey by July 14, 2008, TTY (360) 664-8126 or (360) 902-8760.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The securities prosecution fund was created by RCW 43.320.115. Fines collected by the Washington securities division are placed in a fund known as the securities prosecution fund. Funds may be made available for payment of costs, expenses and charges incurred in the prosecution of criminal charges arising under the Securities Act, the Commodities Transactions Act, the Franchise Investment Protection Act, and the Business Opportunity Fraud Act. The proposed rule making will codify the procedures to be followed by prosecuting attorneys who seek fund expenditures.
Reasons Supporting Proposal: The rule making will provide notice and guidance to prosecuting attorneys who may be eligible to request funds from the securities prosecution fund. The rules will provide additional information on the application procedure to be followed. The rules will also outline the record-keeping and reporting requirements for prosecuting attorneys who receive funds from the securities prosecution fund.
Statutory Authority for Adoption: RCW 43.320.115.
Statute Being Implemented: RCW 43.320.115.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Department of financial institutions, securities division, governmental.
Name of Agency Personnel Responsible for Drafting: Jill M. Vallely, 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8760; Implementation: Scott Jarvis, 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8760; and Enforcement: Michael E. Stevenson, 150 Israel Road S.W., Tumwater, WA 98501, (360) 902-8760.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposal does not impose additional costs on business.
A cost-benefit analysis is not required under RCW 34.05.328. The department of financial institutions is not one of the agencies listed in RCW 34.05.328.
June 3, 2008
Scott Jarvis
Director
OTS-1539.4
PROCESSING APPLICATIONS FOR GRANTS FROM THE SECURITIES PROSECUTION FUND
(2) Application process.
(a) An applicant shall complete an application form provided by the securities division of the department of financial institutions.
(b) If the director or his or her designee approves the application, the applicant may be required to complete and submit additional forms and information. If an application is denied, an applicant may submit a request for reconsideration, but the director or his or her designee's subsequent decision is final.
(c) The attorney general or prosecuting attorney requesting fund expenditures related to a criminal investigation or prosecution must maintain books, records, documents, and other evidence that sufficiently and accurately reflect those expenditures.
(d) At the closing of each case for which fund expenditures have been approved, the attorney general or prosecuting attorney must submit a closing report to the department of financial institutions. The closing report shall provide an accounting for fund expenditures, summarize the outcome of the case, and certify that all funds have been used for the purpose requested. The closing report shall be submitted within one hundred twenty days of the applicant's fiscal year end. If a closing report is not filed, or if the closing report indicates that funds were not used for the purpose requested, the attorney general or prosecuting attorney is required to repay the funds received from the securities prosecution fund.
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