Minutes - January 24, 2017

A meeting of the State Securities Board was held on January 24, 2017, in Room 320, Thomas Jefferson Rusk State Office Building, at 2:00 p.m. Those present were: Beth Ann Blackwood, Chair; E. Wally Kinney, Member; David A. Appleby, Member; G. Alan Waldrop, Member; Miguel Romano, Jr., Member; John Morgan, Securities Commissioner; Clinton Edgar, Director, Registration Division; Tommy Green, Director, Inspections and Compliance Division; Derek Lauterjung, Director, Staff Services Division; Joseph J. Rotunda, Director, Enforcement Division; Marlene K. Sparkman, General Counsel; Robert Elder, Communications; Tina Lawrence, Attorney, Enforcement Division; and Sonia Fergerson, Executive Assistant. Also attending were Rene Gonzales, Kim Lopez-Gonzales, and Carissa Crocker.

Chair Blackwood called the meeting to order at 2:00 p.m.

Minutes of the September 19, 2016, meeting were approved.

The Board voted to excuse Member Appleby’s absence from the May 24, 2016, Board meeting.

The Board voted to adopt the following proposed rule with the changes recommended by the staff:

1. Amendment to §109.7(e), concerning secondary trading exemption under the Texas Securities Act, Section 5.O, to define "recognized securities manual."

The Board voted to publish for public comment the following new rule proposal:

1. Amendment to §139.25(f), concerning intrastate crowdfunding exemption, to raise the maximum offering amount when a segregated account may be used in lieu of an escrow account.

The Board also delegated to the Commissioner the authority under Section 28-1.D of the Texas Securities Act and Board Rule 101.1(e), to waive the requirements contained in the Rules that segregated accounts can only be used when the maximum offering is $100,000 or less, and to permit issuers and portals to use segregated accounts for offerings of higher amounts on an individual waiver basis, pending the effective date of the amendment to §139.25(f), as the Commissioner may, from time to time, deem appropriate.

The Board acknowledged and accepted a grant of $28,375 from the Investor Protection Trust to update the Texas Investor Guide: Strategies for Investing Wisely and Avoiding Financial Fraud publication.

Upon the recommendation of the Audit Committee, the Board voted to engage Garza/Gonzales & Associates as the internal auditor for FY 2017. The Board voted to retain the current committee members, E. Wally Kinney and David A. Appleby, to serve on the Audit Committee and work with the Board's new internal auditor.

The Board confirmed the designation of Travis Iles as Deputy Securities Commissioner.

The Commissioner gave an update on the Agency’s legislative appropriations request and gave a report on what may be expected during the upcoming legislative session.

The Commissioner gave a report on the Agency’s budget and performance measures.

The Commissioner gave a general update on Agency operations.

The Board retired to executive session at 3:17 p.m. to discuss the performance review of the Securities Commissioner pursuant to the exception granted by Section 551.074 of the Texas Government Code, Open Meetings Act.

Following the executive session, the Board reconvened the open meeting, noted approval of the Commissioner's job performance, and recommended that the salary of the Securities Commissioner be increased to $142,929 a year. The meeting was then adjourned.