Florida inadvertently banned most banks from selling securities in the state for weeks – report

Florida, in trying to make it easier for startups and other companies to raise capital, inadvertently banned most banks for selling securities in the state for several weeks, according to a media report.

The state adopted a law that sought to allow companies to fundraise while ensuring that bad actors couldn’t participate in the process. But as written, the law banned any bank that had been punished by the U.S. Securities and Exchange Commission or other authorities, the Wall Street Journal reported, citing people familiar with the matter. However, most banks have been punished by regulators at one time or another, sometimes for relatively minor infractions.

On Sunday, Florida’s commissioner of the Office of Financial Regulation used emergency powers related to recent hurricanes to suspend the part of the law that prevented banks from selling securities. Such banks as Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM) have resumed selling securities in the state, the WSJ said.

Florida’s legislature is expected to propose a permanent remedy to the problem when it meets next. “This was a drafting error in the legislative process,” a spokeswoman for the Office of Financial Regulation told the newspaper.

Dear readers: We recognize that politics often intersects with the financial news of the day, so we invite you to click here to join the separate political discussion.