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Boss's exit doesn't quell claims securities division is amok

Published February 13, 2008 12:00 am
This is an archived article that was published on sltrib.com in 2008, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

The resignation last week of Utah Securities Division Director Wayne Klein wasn't enough to silence critics bent on reining in a state agency they say is running amok over the rights of those it regulates.

Chuck Newton of the Financial Planning Association of Utah said he has heard of enough "shocking actions" at the Securities Division in recent years to lead him to believe that some government officials may eventually be criminally prosecuted.



"We seem to be seeing a collapse of that section of state government," Newton said. In a letter to Rep. Jim Bird, R-West Jordan, Newton threw his support behind House Bill 83. The measure Bird is sponsoring would curb the powers of the division's director and give the say over what cases the division should pursue to an independent board of advisers.

Late last year, Bird was concerned enough about allegations he had heard of mismanagement, possible unfair prosecutions and other serious allegations of wrongdoing that he asked the Legislative Auditor General's office to audit the division; that probe is now under way.

The Financial Planning Association of Utah believes that HB83 will be the first of many legislative changes that will be needed to get the Securities Division back on track, Newton said. "We do not believe the resignation of the division's director will solve all the problems."

Newton lays much of the blame for what he contends is widespread mismanagement on the director of the state's Department of Commerce, Francine Giani, who oversees the Securities Division.

And in his letter to Bird, Newton said Giani allegedly was made aware of illegal activities taking place within the division and responded by telling employees that she didn't care if the actions of the division were legal or not - but that employees were to perform the jobs without question.

"While some employees appear to be willing to follow her highly questionable and irresponsible orders, others are highly reluctant to do so and risk their jobs if they fail to follow her orders," Newton wrote.

Giani, who said she received a copy of Newton's letter on Tuesday, said the allegations were nonsense.

"There is just no truth to them," Giani said. "As soon as I got the letter I turned it over to the auditors because I felt that they needed to have a copy so they can thoroughly investigate everything that is being alleged."

Yet in asking for the audit late last year, Bird said he was encouraged to do so by several Securities Division staff members who had expressed concerns about how the agency was being run.

And since introducing HB83, Bird said he continues to hear complaints about how the division is operating. As a result, he said he is even more committed to bringing any problems to light so that they can be corrected.

 

 

 

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