44-1961

44-1961. Grounds for denial, revocation or
suspension of dealer registration; administrative remedies

A. After a hearing or notice and opportunity for a hearing as provided in article
11 of this chapter, the commission may enter an order suspending for a period of not to
exceed one year, denying or revoking the registration of a dealer if the commission finds
that:

1. The application for registration of the dealer, any financial statement,
document or other exhibit filed with the application or any supplement or amendment to
the application is incomplete, inaccurate or misleading.

2. The dealer is insolvent or is in an unsound financial condition.

3. The dealer has violated this chapter or any rule or order of the commission
under this chapter.

4. The dealer purchases or sells securities at such variations from current market
prices as, in the light of all the circumstances, are unconscionable.

5. The dealer has failed to file with the commission any record, report, financial
statement or other information required under this chapter or any rule or order of the
commission under this chapter, or has refused to permit an examination into the dealer's
affairs.

6. The dealer is lacking in integrity, is not of good business reputation or is not
qualified by training or experience.

7. The dealer has knowingly retained a salesman after notice that the salesman has
committed an offense under this chapter.

8. The dealer has been convicted within ten years preceding the date of filing the
application for registration as a dealer, or at anytime thereafter, of a felony or
misdemeanor involving a transaction in securities, of which fraud is an essential element
or arising out of the conduct of any business in securities.

9. The dealer is permanently or temporarily enjoined by order, judgment or decree
of an administrative tribunal or a court of competent jurisdiction from engaging in or
continuing any conduct or practice in connection with the sale or purchase of securities.

10. The dealer is subject to an order of an administrative tribunal, an SRO or the
SEC denying, suspending or revoking membership or registration as a broker or dealer in
securities or an investment adviser or investment adviser representative for at least six
months.

11. The dealer has been guilty of any fraudulent act or practice in connection with
the purchase or sale of securities.

12. The dealer has failed to reasonably supervise its salesmen.

13. The dealer has engaged in dishonest or unethical practices in the securities
industry.

14. The dealer has engaged in dishonest or unethical practices in business or
financial matters.

B. In addition to denying, revoking or suspending the registration, if the
commission finds that a dealer has engaged in an act, practice or transaction described
in subsection A, paragraph 4, 12 or 13, the commission may do one or more of the
following:

1. Assess administrative penalties.

2. Order the dealer to cease and desist from engaging in the act, practice or
transaction or doing any other act in furtherance of the act, practice or transaction.

3. Take appropriate affirmative action, as prescribed by the commission, to correct
the conditions resulting from the act, practice or transaction, including a requirement
to provide restitution.

C. It is sufficient cause for denial, revocation or suspension of registration of a
dealer as provided in this section, if the dealer is a partnership, corporation,
unincorporated association or trust, that a member of the partnership, an officer or
director of the corporation or unincorporated association, a trustee or other fiduciary
of such trust or a person controlling, controlled by or under common control with the
dealer has been guilty of any act or omission which would be a sufficient ground for
denying or revoking the registration of an individual dealer.

D. If the registration of a dealer is revoked or denied, that dealer may not file
with the commission an application for registration under this chapter or for licensure
under chapter 13 of this title for at least one year after the date of the revocation or
denial.