44-3201

44-3201. Grounds for denial, revocation or
suspension of license; administrative remedies

A. After a hearing or notice and an opportunity for a hearing as provided in
article 7 of this chapter, the commission may enter an order suspending for a period of
not more than one year, denying or revoking the license of an investment adviser or
investment adviser representative if the commission finds that it is in the public
interest and any one or a combination of the following:

1. The application for licensure of the investment adviser or investment adviser
representative, any financial statement, document or other exhibit filed with an
application or any supplement or amendment to an application is incomplete, inaccurate or
misleading.

2. The investment adviser is insolvent or is in an unsound financial condition.

3. The investment adviser or investment adviser representative violates this
chapter or any rule or order of the commission adopted or issued under this chapter.

4. The investment adviser or investment adviser representative fails 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 adopted or issued under this
chapter or refuses to permit an examination pursuant to section 44-3132.

5. The investment adviser knowingly retains an unlicensed investment adviser
representative who is required to be licensed under this chapter.

6. The investment adviser permits any person to render investment advice in
violation of this chapter.

7. The investment adviser representative is not employed by a licensed or federal
covered adviser.

8. The investment adviser or investment adviser representative has been convicted
within ten years preceding the date of filing an application for licensure as an
investment adviser or investment adviser representative, or at any time after the date of
filing an application, 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
involving securities or any aspect of the securities business.

9. The investment adviser or investment adviser representative 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
involving a violation of any federal or state securities laws or a violation of any other
regulatory licensing requirements.

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

11. The investment adviser or investment adviser representative has been found
civilly or criminally liable, by any court of competent jurisdiction or other
governmental authority in a civil or criminal action not subsequently reversed, suspended
or vacated, for any fraudulent act or practice in connection with any aspect of the
securities business.

12. The investment adviser fails to reasonably supervise its investment adviser
representatives or employees to assure their compliance with this chapter.

13. The investment adviser or investment adviser representative engages in dishonest
or unethical practices in the securities industry.

14. The investment adviser or investment adviser representative engages in dishonest
or unethical practices in business or financial matters.

B. In addition to denying, revoking or suspending the license, if the commission
finds that an investment adviser or investment adviser representative has engaged in an
act, practice or transaction described in subsection A, paragraph 6, 12 or 13, the
commission may do one or more of the following:

1. Assess administrative penalties.

2. Order the investment adviser or investment adviser representative 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. If the investment adviser is a partnership, corporation, unincorporated
association, limited liability company or trust, it is sufficient cause for denial of
licensure if a member of the partnership, an officer or director of the corporation or
unincorporated association, a manager of a limited liability company, a trustee or any
other fiduciary of a trust or a person controlling, controlled by or under common control
with the investment adviser has been found civilly or criminally liable, by any court of
competent jurisdiction or other governmental authority in a civil or criminal action not
subsequently reversed, suspended or vacated, for any act or omission that would be
sufficient grounds for denying the licensure of an individual investment adviser.

D. If the license of an investment adviser or investment adviser representative is
revoked or denied, that investment adviser or investment adviser representative may not
file with the commission for licensure under this chapter or for registration under
chapter 12 of this title for at least one year from the date of the revocation or denial.