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Secretary of State Loses Battle

September 24, 2005
By: Kathryn Buschman
State Capital Bureau

JEFFERSON CITY - Democratic Secretary of State, Robin Carnahan, would lose her ability to regulate business securities under a proposal from the state review commission. The Republican governor appointed commission has been assigned to develop recommendations to make state government more efficient.

The Securities Division, currently housed in the office of the secretary of state, would be moved to the newly-created Department of Financial Regulation and Professional Registration whose director would be appointed by the governor.

"[It] is an unjustified and unsound proposal that could jeopardize consumer and investor protection for all Missourians," Secretary of State Robin Carnahan said at last week' commission meeting.

Carnahan also said that the commission was acting beyond the scope of the executive order by reviewing the duties and responsibilities of statewide elected officials.

The proposal would also move several other regulatory bodies that are currently under the Department of Economic Development to the Department of Financial Regulation and Professional Registration.

The panel was mixed on its voting on the recommendation. One of the panel members, Dick Moore, said that the move is "not part of the commission's purview and I feel that the secretary of state has done a good job."

John Arnold, another member of the panel, said that 13 other states have already combined securities, banking and insurance oversight into one department.

The securities division has been housed in the Office of the Secretary for 80 years. According to Carnahan, in the last year, the securities division has obtained a $1.5 million settlement for improper disclosures on revenue sharing agreements. Missouri was also the first state to take action against the firm Waddell & Reed.

Commission co-chair, Stephen Bradford, refused an interview and did not return phone calls.