Attorney General Eric T. Schneiderman released the following statement after reports that the presidential transition team is considering ways to dismantle state consumer and investor protection statutes, also known as Blue Sky laws:
“I am deeply troubled by reports that the Presidential Transition Team is considering ways to eviscerate some of the most basic consumer and investor protection laws in the country. Every day, state and local law enforcement effectively utilize Blue Sky laws to root out the worst types of fraud, corruption, and abuse on Wall Street and across major industries.
“In many cases, these anti-fraud statutes are consumers’ and investors’ first line of defense against exploitation, particularly when retail and institutional investor dollars are in the hands of increasingly complex and opaque financial institutions. In the past few years alone, multi-state fraud investigations into Wall Street’s role in the collapse of the housing market have recovered over $95 billion in fines, penalties, and most important, consumer relief.
“The investigations and prosecutions made possible by state anti-fraud statutes are among the most effective deterrents of misconduct, and regularly lead to critical updates to federal securities laws and enforcement practices of consumer protection laws. Any attempt to gut these consumer and investor protections would severely undercut state police powers and only embolden those who seek to defraud and exploit everyday Americans.
“At a time of regulatory uncertainty at the federal level, it is essential that we maintain the very laws that have helped state and local law enforcement keep consumers and investors safe for over one hundred years.”