| Joseph Borg | |
|---|---|
| Born | 1951 (age 60–61) New York City |
| Nationality | American |
| Ethnicity | Maltese |
| Alma mater | Hofstra University School of Law |
| Occupation | Financial regulation |
| Employer | State of Alabama |
| Title | Securities Commissioner |
| Term | 1994–present |
Joseph P. Borg (born 1951) is an American financial regulator who has served as the Securities Commissioner of Alabama since 1994. In this position, he is responsible for prosecuting financial crimes which affect Alabama residents. He has also served as the president of the North American Securities Administrators Association for two terms.[1] Due to his successful record of prosecuting financial crimes, he has been described in Forbes as "Wall Street's Worst Nightmare".[2]. Smart Money magazine listed Borg in its listing of "The Power 30- The Top Financial Players" citing his 98% conviction rate and calling him "one of the toughest 'stock cops' in America" [Smart Money November, 2011]
Contents |
Borg was born in New York City to Maltese immigrants Philip J. Borg and Dorothy Borg (née Chircop).[3] He attended Hofstra University School of Law and then worked as a personal injury lawyer. He moved from Queens to Montgomery, Alabama to work as a defense lawyer in in product–liability cases.[2] Borg soon made partner in a Montgomery law firm and later worked as a corporate lawyer for First Alabama Bank.[1][4]
Borg first began prosecuting financial fraud in 1993 when he represented the victim of a microcap fraud case.[2] In 1994 Borg was named the Securities Commissioner of Alabama. He currently oversees approximately fifty employees. In 2010 his department forced the repayment of $1 million to fraud victims and generated $10 million in state revenue through fines and licensing fees.[1][4] From 1998 to 2002 he averaged twenty eight criminal convictions a year.[2] In Alabama, the office of Securities Commissioner is a non–partisan post, and consequently Borg has served under five Governors of Alabama. Under Borg's administration, the Alabama Securities Commission has a successful conviction rate of ninety five percent. He primarily prosecutes ponzi schemes, unregistered brokers, and penny stock dealers, prosecuting any cases in which Alabama residents are directly affected, regardless of where the offending company is located. During his tenure, he has received a number of death threats. These threats have led to the installation of armed guards outside his office.[1]
Borg attempts to impose long sentences on white–collar criminals and has argued that they should be treated no differently than perpetrators of violent crime. The Wall Street Journal has described his approach as "lock–'em–up–and–throw–away–the–key".[1] Borg claims that Allen Stanford avoided selling his fraudulent certificates of deposit in Alabama for fear of being caught.[4]
Borg was first elected as the president of the North American Securities Administrators Association for the 2001–02 term.[5] The NASAA is a nonprofit organization which represents regulators from across North America. He also served in this role for the 2006–07 term and now serves on their board of directors.[6][7]
In his first year as commissioner, his office was inundated with complaints regarding New York penny stock brokerage Stratton Oakmont. Stratton Oakmont was perpetrating a "pump and dump" scheme, in which they bought shares in a small company and sold their shares after convincing a number of people to invest in the company. Borg pushed for the formation of a multistate task force, which following an investigation succeeded in shutting down the brokerage. This event later inspired the 2000 film Boiler Room.[4]
In 1999 Borg prosecuted a Christian organization from Tampa, Florida which had raised funds at churches in Alabama using itinerant speakers.[4] The organization, known as Greater Ministries International, promised its followers that if they donated money it would later be repaid to them with a profit. The organization operated as a ponzi scheme, paying established donors dividends which were taken from the funds supplied by newer donors. The fraud eventually took in over $500 million. After the U.S. Securities and Exchange Commission declined to involve themselves in the case, Borg sought to prosecute the group himself. He traveled to Florida where a Federal judge authorized the Alabama Securities Commission to seize the church's assets. Accompanied by U.S. Marshals in an armored vehicle, Borg successfully took over the Greater Ministries' headquarters. According to Birmingham trial lawyer John Haley, the armored vehicle was used due to safety concerns following the recent raids on the Branch Davidian compound in Waco, Texas. Leaders of Greater Ministries were eventually given lengthy prison sentences.[4]
In 2002 Borg led a coalition of law enforcement members from multiple U.S. states in a coördinated investigation of Wall Street businesses. Modeled after litigation against the tobacco industry, this move was described in Forbes as "regulation by lawsuit". The investigation prompted Morgan Stanley head Philip J. Purcell to unsuccessfully lobby for new laws which would prevent such suits.[2] The investigation later led to ten Wall Street firms paying a settlement of $1.4 billion. Firms that contributed to the settlement included Morgan Stanley, Goldman Sachs, Bear Stearns, and Lehman Brothers. The state of Alabama received $5 million of the settlement.[8]
In 2009, Borg organized a group of regulators from Alabama, Mississippi, Tennessee, South Carolina and Kentucky against Morgan Keegan, a Tennessee based Broker and Morgan Asset Management in Birmingham, Alabama and together with the U.S. SEC in June, 2011 created a $200 million fund for 39,000 + investors who lost money in a sub-prime bond fund claiming the funds were sold as 'safe' investments. As part of the settlement an additional $10 million was set aside for the States where investors were harmed. http://www.asc.alabama.gov/News/2011%20News/6-22-11%20M%20Keegan%20press%20rel%20-%20FNL.pdf
Borg has been critical of the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority for not imposing tougher sanctions on financial criminals.[1] He has also argued that financial regulatory power in the U.S. should not be concentrated in one agency. Rather, he proposes that regulatory agencies across the country should attempt to work together more effectively.[1]
He was also critical of George W. Bush's plan to partially privatize Social Security. Borg agreed that reform was necessary, but called for what he described as a "middle way" between the current system and the President's plan.[3]