§ 2.9.5.3

• Jurisdiction: Arizona

§ 2.9.5.3 The Investment Bankers Association's Influence

The preliminary draft that Hastings presented to the SEC largely tracked model legislation prepared by the Investment Bankers Association (IBA) the year before. The IBA, whose members in 1949 included most of the country's principal underwriting firms, advocated simplified state securities laws written to deter fraud and streamline registration. It opposed Kansas-style registration laws like those in Arizona's 1912 Investment-Company Act. It considered laws of that type poorly drafted and unworkable.³⁷⁰ As an alternative, the IBA drafted its own model securities laws. These model laws allowed a state to adopt "one or more of the three basic types of regulation (antifraud provisions, registration of dealers and salesmen, or registration of securities)."³⁷¹

The model laws became available in 1948.³⁷²

These IBA-drafted laws were the only model securities legislation that existed when Hastings and Jacobson decided to prepare a new securities act. A uniform state act did not exist; the last uniform state securities law had been withdrawn in 1944 as obsolete,³⁷³ and a replacement act was not finished until 1956.³⁷⁴ In the interim, the IBA promoted its model legislation,³⁷⁵ which Arizona and four other states used as templates for new securities acts.³⁷⁶

Hastings, though, did not blindly accept the IBA's views. As he told the SEC, he wanted a "stiff law" that gave him discretion to regulate...