Font ResizeAs if a couple of black eyes from him wasn't enough, the Utah Securities Division once again has suffered a major loss in what some describe as a misguided effort to revoke broker Richard W. Mack's securities license.
The Utah Supreme Court on Friday ruled the division erred by continuing to try to yank Mack's license after a 3rd District Court judge dismissed all of the state's claims against him.
"Obviously, we think the Utah Supreme Court made the right decision," said Mack's attorney Stephen Christiansen. "The Division of Securities had its shot and lost, and it was wrong for them to go back and try to take another bite at the apple."
The division first filed a complaint against Mack in February 2005 alleging that he failed to adequately supervise a broker who was selling unregistered securities and had raised $3.2 million from 12 investors.
Although the division conceded that Mack didn't know of the broker's activities, it nevertheless sought to permanently bar Mack from working in the industry. A judge subsequently granted Mack's motion to dismiss the complaint.
But in August 2006, the division started an administrative action against Mack, raising the same allegations. Mack sued in district court and won again; the court ruled that the division couldn't retry the matter.
The state securities division appealed the ruling to the Utah Supreme Court, and now has lost again.
A spokeswoman for the Utah Department
"I'd worked for more than 40 years in the securities industry and never had a mark against me, so I wasn't about to give in to them," Mack said. "It took years and $250,000, but it's now vindication day."
Mack's battle also ended up being far more important that just one broker's fight against the state.
His case helped spark a 2008 audit of the division by the Legislative Auditor General's Office. That report led to an overhaul of the way the division operates after auditors found the state agency was running amok over the rights of those it regulated.
"Richard Mack's was the second of three cases described in the audit report," said Rep. Jim Bird, R-West Jordan, an acquaintance of Mack's and who had called for the investigation. "This was a case that should never have been brought."
