The audit findings "absolutely" confirmed what he had been told by people inside the division and by people investigated by the division, he said.

"It's not a surprise to me, to read these things and to hear these things and to think back about the people who have come to me and have said, 'Jim this is happening to me. What do we do?' Well, now what we have is documented proof instead of hearsay that these things have been going on," Bird said.

Bird was a critic of former division director Wayne Klein. One case that drew attention was in 2005, when the division accused a broker — reportedly a former business associate of Bird's — of failing to adequately supervise another broker who was selling unregistered securities.

Giani said many of the cases in the audit were under way before she became the department's director, and she said she wished investors had been included in the audit.

"It would have been nice to hear from the other side, to hear from victims who have received money and who think the things the division does is good, and that was not a part of the audit," Giani said. "We believe the audit raised a number of questions, and that we feel changes to the division would be beneficial. We've done those, and we will continue to move forward and continue the important work of the division."

Klein left the post of division director earlier this year, after the division came under fire for handling a case involving four employees with a stock-brokerage and investment firm. In a prepared statement, Klein said it is "unfortunate" that the audit's focus was responding to people who had been investigated for securities fraud.

"That the audit would focus so much attention on gathering information from people accused of violating the law is akin to trying to evaluate the performance of a police department by interviewing only those people the agency had put in jail," he said.

He said he hopes the division and department "can continue to carry out their public protection roles as they move forward and that this audit report does not make it too difficult to discipline brokers or get restitution for victims of investment fraud in the future. The state needs to be as vigorous in representing its clients — Utah citizens — as fraud promoters and the brokerage industry are in representing their own interests."