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Enforcement Newsletter

May 2014

In light of the new focus on federal referrals, boards may want to review rules and laws for language allowing enforcement based on referrals from federal sources.

Many jurisdictions have language allowing the state board to discipline a licensee based on discipline issued by another state or federal agency. However, the PCAOB may not fall clearly within the definition of a “federal agency.” As such, the board may have to prove the underlying facts of a PCAOB disciplinary matter before being able to take action against a licensee rather than being able to rely upon the PCAOB’s discipline as prima facie evidence of the misconduct.

The solution may be as simple as revising the current rule to specifically reference PCAOB decisions as a basis for discipline by the Board.

This topic has been the subject of a recent email discussion among board attorneys which generated some great suggestions for rule-making language in different jurisdictions.

If you need additional information or some suggested rule-making language, please contact Stacey Grooms at sgrooms@nasba.org.

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