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Thursday, Jun 5, 2003 |
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Posted on June 05, 2003 Securities fraud bill signed into law
Fueled by millions of dollars lost in an Upstate investment company, a bill to give the state greater power to investigate securities fraud was signed Wednesday by Gov. Mark Sanford. State Attorney General Henry McMaster said he plans to begin using the new law immediately and is taking steps to begin a State Grand Jury investigation of Carolina Investors Inc. The law also extends the statute of limitations for legal action to three years after the initial discovery of wrongdoing. The Attorney General's Office gets $1 million, and $200,000 goes to the State Law Enforcement Division to investigate and prosecute securities fraud cases. The bill was created after McMaster began an investigation of Carolina Investors, which closed in March and filed for protection from creditors in U.S. Bankruptcy Court in April. Carolina Investors' parent company, HomeGold Financial, also filed for bankruptcy protection. Thousands of investors -- most from the Upstate -- likely will lose millions of dollars because of the bankruptcy. A task force, including the FBI and the fraud unit of the Justice Department, is examining about 8,000 accounts of Carolina Investors and the operations and finances of HomeGold Financial. Sen. Larry Martin, R-Pickens, said it's the "worst financial crisis to affect my home county, and the Upstate region, since the Great Depression." Martin said he has told his constituents he can't promise they'll get their money back, but the bill will help the investigation and increase regulation of the securities industry. McMaster said the new law will create a "climate of confidence among investors" and Sanford said that will translate into greater wealth for South Carolinians. "If you don't have investor confidence in the market place, you don't have those investments taking place that are so essential to productivity gains," Sanford said. |
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All material ©2003 Spartanburg Herald-Journal | |
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