SOURCE: AXcess News

June 13, 2008 14:03 ET

IIROC: New Securities Watchdog Leaps Onto Scene

RENO, NV--(Marketwire - June 13, 2008) - Nevada, long-known as a good State to incorporate in with many benefits, is also known as a place where unscrupulous stock promoters go to take advantage of investors. But now the mining capital of the U.S. is seeing a friend in its neighbors to the North where in Canada the Investment Industry Regulatory Organization of Canada (IIROC) has leaped onto the scene as the newest securities watchdog bent on protecting investors.

IIROC was formed through merger of the Investment Dealers Association of Canada (IDA) and Market Regulation Services Inc. which officially became IIROC on June 1, 2008. The two securities organizations began hammering out the details of IIROC's role in monitoring stocks and dealers in securities back in April 2006, having to then pass the muster of each provincial regulatory body, the exchanges and Canadian law before coming to terms satisfactory to all involved, including Canada's stock brokerage community which approved the merger by more than a 98% vote.

Since IIROC began operations, the securities watchdog has been citing violations, cease trading orders, disputes, hearings and other regulatory initiatives at the rate of more than two-per-day. And in case you are wondering what that has to do with Nevadans or other states' investors, plenty.

According to Mr. Bill Singer, one of the nation's leading securities lawyers practicing in New York, "Any move in Canada away from over reliance on a Province-based system of securities regulation to a more national undertaking may well be healthy."

Singer says that in the U.S. with its three-tier system of securities regulation there is a new movement underway to overhaul our regulatory structure.

"A first step towards that new day was preliminarily set forth in the Department of the Treasury's 'Blueprint," said Singer. Yet the NY securities lawyer also says there are flaws in that process.

"I for one believe that is an atrocious proposal that fails to understand the inherent flaws within our system of self-regulation and may well perpetuate those failures on a new generation of investors," Singer explained.

"Whether IIROC follows down the same tortured path trod by the former National Association of Securities Dealers and the New York Stock Exchange, which recently merged to form FINRA, or blazes a new, more effective regulatory road remains to be seen," Singer stated.

Here in Nevada the number of Canadian public companies with mining claims has made for a host of cross-border issues when it comes to the promotion of their securities. The State of Nevada itself regulates corporate law but many of the companies listed on Canada's venture exchange, as well a host of over-the-counter U.S. companies, are exposed to scrutiny by State regulators who are somewhat overwhelmed by it all thanks to the advent of the Internet, which has created a new set of problems relating to compliance of information put before unsuspecting residents in Nevada through emails and online posts.

In contacting the Nevada Secretary of State information office in Las Vegas to obtain information on the level of securities litigation that's been conducted, we were informed that the info was not readily available, however, they are attempting to compile some statistics for AXcess News which we intend on using in a follow-up story we'll be making available shortly.

Still, residents of Nevada can rest a little easier knowing that in Canada, regulators have become more aggressive in streamlining the watchdog process of securities regulation and as Singer says, hopefully it will work out to the benefit of both issuers and individual investors.

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