South Dakota Small Investors Protection Act
The South Dakota Small Investors Protection Act is also known as "Initiated Measure 9". This citizen initiated constitutional amendment appeared on the November 4, 2008 general election ballot in South Dakota. 2008 election results These results are based on the Elections Division of South Dakota. Background Article 4 of South Dakota's Uniform Securities Act of 2002 concerns the state registration requirements and exemptions from them for broker-dealers, agents, investment advisors, investment advisor representatives, and federal covered investment advisors. This initiative aimed to amend two specific subsections to make broker-dealers, agents, investment advisors, investment advisor representatives, and federal covered investment advisors liable for up to $10,000 in damages for each violation for commercially unreasonable delay in delivery of securities that they have sold; commercially unreasonable delay being defined for the purpose of this law as more than 3 business days. The purpose of this is to prohibit short-selling of securities. Attorney General's Explanation: "State and federal law regulates the purchase and sale of stocks and other securities. A common "stock market" transaction is a "short sale" where, for example, an investor who believes a publicly traded stock is over-priced will borrow that stock from an owner, sell the borrowed stock, and