State Codes and Statutes

Statutes > North-carolina > Chapter_78A > GS_78A-39

§ 78A‑39.  Denial,revocation, suspension, censure, cancellation, and withdrawal of registration.

(a)        The Administratormay by order deny, suspend, or revoke any registration in whole or in part orrestrict or limit as to any person, office, function, or activity or censurethe registrant if he finds

(1)        That the order is inthe public interest and

(2)        That the applicantor registrant or, in the case of a dealer, any partner, officer, or director,any person occupying a similar status or performing similar functions, or anyperson directly or indirectly controlling the dealer:

a.         Has filed anapplication for registration which as of its effective date, or as of any dateafter filing in the case of an order denying effectiveness, was incomplete inany material respect or contained any statement which was, in light of thecircumstances under which it was made, false or misleading with respect to anymaterial fact; or

b.         Has willfullyviolated or willfully failed to comply with any provision of this Chapter or apredecessor law or any rule or order under this Chapter or a predecessor law orany provision of the Securities Act of 1933, the Securities Exchange Act of1934, the Investment Advisors Act of 1940, or the Commodity Exchange Act; or

c.         Has been convicted,within the past 10 years, of any misdemeanor involving a security or any aspectof the securities business, or any felony; or

d.         Is permanently ortemporarily enjoined by any court of competent jurisdiction from engaging in orcontinuing any conduct or practice involving any aspect of the securitiesbusiness; or

e.         Is the subject of anorder of the Administrator denying, suspending, or revoking registration as adealer or salesman; or

f.          Is the subject ofan order entered within the past five years by the securities administrator ofany state or by the Securities and Exchange Commission denying or revokingregistration as a dealer or salesman, or the substantial equivalent of thoseterms as defined in this Chapter, or is the subject of a final order suspendingor expelling him from a national securities exchange or national securitiesassociation registered under the Securities Exchange Act of 1934, or is thesubject of a United States post office fraud order; but (i) the Administratormay not institute a revocation or suspension proceeding under subdivision (2)fof subsection (a) more than one year from the date of the order relied on, and(ii) the Administrator may not enter an order under subdivision (2)f ofsubsection (a) on the basis of an order under another state act unless thatorder was based on facts which would currently constitute a ground for an orderunder this section; or

g.         Has engaged indishonest or unethical practices in the securities business; or

h.         Is insolvent, eitherin the sense that his liabilities exceed his assets or in the sense that hecannot meet his obligations as they mature; but the Administrator may not enteran order against a dealer under this paragraph without a finding of insolvencyas to the dealer; or

i.          Is not qualified onthe basis of such factors as training, experience, and knowledge of thesecurities business, except as otherwise provided in subsection (b).

(a1)      The Administratormay by order deny, suspend, or revoke any registration in whole or in part orrestrict or limit as to any person, office, function, or activity or censurethe registrant if he finds

(1)        That the order is inthe public interest and

(2)        That the applicantor registrant:

a.         Has failedreasonably to supervise his salesmen if he is a dealer; or

b.         Has failed to paythe proper filing fee; but the Administrator may enter only a denial orderunder this clause, and he shall vacate any such order when the deficiency hasbeen corrected.

The Administrator may notinstitute a suspension or revocation proceeding on the basis of a fact ortransaction known to him when registration became effective unless theproceeding is instituted within the next 120 days.

(b)        The followingprovisions govern the application of G.S. 78A‑39(a)(2)i:

(1)        The Administratormay not enter an order against a dealer on the basis of the lack ofqualification of any person other than (i) the dealer himself if he is anindividual or (ii) a salesman of the dealer.

(2)        The Administratormay not enter an order solely on the basis of lack of experience if theapplicant or registrant is qualified by training or knowledge or both or, inthe case of a dealer if he is registered and in good standing under theSecurities Exchange Act of 1934.

(3)        The Administratorshall consider that a salesman who will work under the supervision of aregistered dealer need not have the same qualifications as a dealer.

(4)        The Administratormay by rule provide for an examination which may be written or oral or both, tobe taken by any class of or all applicants.

(c)        The Administratormay by order summarily postpone or suspend registration pending finaldetermination of any proceeding under this section. Upon the entry of theorder, the Administrator shall promptly notify the applicant or registrant, aswell as the employer or prospective employer if the applicant or registrant isa salesman, that it has been entered and of the reasons therefor and thatwithin 20 days after the receipt of a written request the matter will bescheduled for hearing in accordance with Chapter 150B of the General Statutes.If no request for a hearing, other responsive pleading, or submission isreceived by the Administrator within 30 business days of receipt of service ofnotice of the order upon the applicant or registrant and no hearing is orderedby the Administrator, the order shall become final and remain in effect unlessit is modified or vacated by the Administrator. If a hearing is requested orordered, the Administrator, after notice of and opportunity for hearing, maymodify or vacate the order or extend it until final determination.

(d)        If theAdministrator finds that any registrant or applicant for registration is nolonger in existence or has ceased to do business as a dealer or salesman, or issubject to an adjudication of mental incompetence or to the control of acommittee, conservator, or guardian, or cannot be located after reasonablesearch, the Administrator may by order cancel the registration or application.

(e)        Withdrawal fromregistration as a dealer or salesman becomes effective 90 days after receipt ofan application to withdraw or within such shorter period of time as theAdministrator may determine, unless a revocation or suspension proceeding ispending when the application is filed or a proceeding to revoke or suspend orto impose conditions upon the withdrawal is instituted within 90 days after theapplication is filed. If a proceeding is pending or instituted, withdrawalbecomes effective at such time and upon such conditions as the Administrator byorder determines. If no proceeding is pending or instituted and withdrawalautomatically becomes effective, the Administrator may nevertheless institute arevocation or suspension proceeding under G.S. 78A‑39(a)(2)b within oneyear after withdrawal became effective and enter a revocation or suspensionorder as of the last date on which registration was effective.

(f)         No order may beentered under any part of this section except the first sentence of subsection(c) without (i) appropriate prior notice to the applicant or registrant (aswell as the employer or prospective employer if the applicant or registrant isa salesman), (ii) opportunity for hearing, and (iii) written findings of factand conclusions of law. (1925, c. 190, s. 19; 1927, c. 149, s. 19; 1955, c. 436, s. 9; 1959, c.1122; 1971, c. 831, s. 1; 1973, c. 1380; 1983, c. 817, ss. 11‑15; 1997‑456,s. 27; 1997‑462, ss. 1, 2; 2001‑126, s. 3.)

State Codes and Statutes

Statutes > North-carolina > Chapter_78A > GS_78A-39

§ 78A‑39.  Denial,revocation, suspension, censure, cancellation, and withdrawal of registration.

(a)        The Administratormay by order deny, suspend, or revoke any registration in whole or in part orrestrict or limit as to any person, office, function, or activity or censurethe registrant if he finds

(1)        That the order is inthe public interest and

(2)        That the applicantor registrant or, in the case of a dealer, any partner, officer, or director,any person occupying a similar status or performing similar functions, or anyperson directly or indirectly controlling the dealer:

a.         Has filed anapplication for registration which as of its effective date, or as of any dateafter filing in the case of an order denying effectiveness, was incomplete inany material respect or contained any statement which was, in light of thecircumstances under which it was made, false or misleading with respect to anymaterial fact; or

b.         Has willfullyviolated or willfully failed to comply with any provision of this Chapter or apredecessor law or any rule or order under this Chapter or a predecessor law orany provision of the Securities Act of 1933, the Securities Exchange Act of1934, the Investment Advisors Act of 1940, or the Commodity Exchange Act; or

c.         Has been convicted,within the past 10 years, of any misdemeanor involving a security or any aspectof the securities business, or any felony; or

d.         Is permanently ortemporarily enjoined by any court of competent jurisdiction from engaging in orcontinuing any conduct or practice involving any aspect of the securitiesbusiness; or

e.         Is the subject of anorder of the Administrator denying, suspending, or revoking registration as adealer or salesman; or

f.          Is the subject ofan order entered within the past five years by the securities administrator ofany state or by the Securities and Exchange Commission denying or revokingregistration as a dealer or salesman, or the substantial equivalent of thoseterms as defined in this Chapter, or is the subject of a final order suspendingor expelling him from a national securities exchange or national securitiesassociation registered under the Securities Exchange Act of 1934, or is thesubject of a United States post office fraud order; but (i) the Administratormay not institute a revocation or suspension proceeding under subdivision (2)fof subsection (a) more than one year from the date of the order relied on, and(ii) the Administrator may not enter an order under subdivision (2)f ofsubsection (a) on the basis of an order under another state act unless thatorder was based on facts which would currently constitute a ground for an orderunder this section; or

g.         Has engaged indishonest or unethical practices in the securities business; or

h.         Is insolvent, eitherin the sense that his liabilities exceed his assets or in the sense that hecannot meet his obligations as they mature; but the Administrator may not enteran order against a dealer under this paragraph without a finding of insolvencyas to the dealer; or

i.          Is not qualified onthe basis of such factors as training, experience, and knowledge of thesecurities business, except as otherwise provided in subsection (b).

(a1)      The Administratormay by order deny, suspend, or revoke any registration in whole or in part orrestrict or limit as to any person, office, function, or activity or censurethe registrant if he finds

(1)        That the order is inthe public interest and

(2)        That the applicantor registrant:

a.         Has failedreasonably to supervise his salesmen if he is a dealer; or

b.         Has failed to paythe proper filing fee; but the Administrator may enter only a denial orderunder this clause, and he shall vacate any such order when the deficiency hasbeen corrected.

The Administrator may notinstitute a suspension or revocation proceeding on the basis of a fact ortransaction known to him when registration became effective unless theproceeding is instituted within the next 120 days.

(b)        The followingprovisions govern the application of G.S. 78A‑39(a)(2)i:

(1)        The Administratormay not enter an order against a dealer on the basis of the lack ofqualification of any person other than (i) the dealer himself if he is anindividual or (ii) a salesman of the dealer.

(2)        The Administratormay not enter an order solely on the basis of lack of experience if theapplicant or registrant is qualified by training or knowledge or both or, inthe case of a dealer if he is registered and in good standing under theSecurities Exchange Act of 1934.

(3)        The Administratorshall consider that a salesman who will work under the supervision of aregistered dealer need not have the same qualifications as a dealer.

(4)        The Administratormay by rule provide for an examination which may be written or oral or both, tobe taken by any class of or all applicants.

(c)        The Administratormay by order summarily postpone or suspend registration pending finaldetermination of any proceeding under this section. Upon the entry of theorder, the Administrator shall promptly notify the applicant or registrant, aswell as the employer or prospective employer if the applicant or registrant isa salesman, that it has been entered and of the reasons therefor and thatwithin 20 days after the receipt of a written request the matter will bescheduled for hearing in accordance with Chapter 150B of the General Statutes.If no request for a hearing, other responsive pleading, or submission isreceived by the Administrator within 30 business days of receipt of service ofnotice of the order upon the applicant or registrant and no hearing is orderedby the Administrator, the order shall become final and remain in effect unlessit is modified or vacated by the Administrator. If a hearing is requested orordered, the Administrator, after notice of and opportunity for hearing, maymodify or vacate the order or extend it until final determination.

(d)        If theAdministrator finds that any registrant or applicant for registration is nolonger in existence or has ceased to do business as a dealer or salesman, or issubject to an adjudication of mental incompetence or to the control of acommittee, conservator, or guardian, or cannot be located after reasonablesearch, the Administrator may by order cancel the registration or application.

(e)        Withdrawal fromregistration as a dealer or salesman becomes effective 90 days after receipt ofan application to withdraw or within such shorter period of time as theAdministrator may determine, unless a revocation or suspension proceeding ispending when the application is filed or a proceeding to revoke or suspend orto impose conditions upon the withdrawal is instituted within 90 days after theapplication is filed. If a proceeding is pending or instituted, withdrawalbecomes effective at such time and upon such conditions as the Administrator byorder determines. If no proceeding is pending or instituted and withdrawalautomatically becomes effective, the Administrator may nevertheless institute arevocation or suspension proceeding under G.S. 78A‑39(a)(2)b within oneyear after withdrawal became effective and enter a revocation or suspensionorder as of the last date on which registration was effective.

(f)         No order may beentered under any part of this section except the first sentence of subsection(c) without (i) appropriate prior notice to the applicant or registrant (aswell as the employer or prospective employer if the applicant or registrant isa salesman), (ii) opportunity for hearing, and (iii) written findings of factand conclusions of law. (1925, c. 190, s. 19; 1927, c. 149, s. 19; 1955, c. 436, s. 9; 1959, c.1122; 1971, c. 831, s. 1; 1973, c. 1380; 1983, c. 817, ss. 11‑15; 1997‑456,s. 27; 1997‑462, ss. 1, 2; 2001‑126, s. 3.)


State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_78A > GS_78A-39

§ 78A‑39.  Denial,revocation, suspension, censure, cancellation, and withdrawal of registration.

(a)        The Administratormay by order deny, suspend, or revoke any registration in whole or in part orrestrict or limit as to any person, office, function, or activity or censurethe registrant if he finds

(1)        That the order is inthe public interest and

(2)        That the applicantor registrant or, in the case of a dealer, any partner, officer, or director,any person occupying a similar status or performing similar functions, or anyperson directly or indirectly controlling the dealer:

a.         Has filed anapplication for registration which as of its effective date, or as of any dateafter filing in the case of an order denying effectiveness, was incomplete inany material respect or contained any statement which was, in light of thecircumstances under which it was made, false or misleading with respect to anymaterial fact; or

b.         Has willfullyviolated or willfully failed to comply with any provision of this Chapter or apredecessor law or any rule or order under this Chapter or a predecessor law orany provision of the Securities Act of 1933, the Securities Exchange Act of1934, the Investment Advisors Act of 1940, or the Commodity Exchange Act; or

c.         Has been convicted,within the past 10 years, of any misdemeanor involving a security or any aspectof the securities business, or any felony; or

d.         Is permanently ortemporarily enjoined by any court of competent jurisdiction from engaging in orcontinuing any conduct or practice involving any aspect of the securitiesbusiness; or

e.         Is the subject of anorder of the Administrator denying, suspending, or revoking registration as adealer or salesman; or

f.          Is the subject ofan order entered within the past five years by the securities administrator ofany state or by the Securities and Exchange Commission denying or revokingregistration as a dealer or salesman, or the substantial equivalent of thoseterms as defined in this Chapter, or is the subject of a final order suspendingor expelling him from a national securities exchange or national securitiesassociation registered under the Securities Exchange Act of 1934, or is thesubject of a United States post office fraud order; but (i) the Administratormay not institute a revocation or suspension proceeding under subdivision (2)fof subsection (a) more than one year from the date of the order relied on, and(ii) the Administrator may not enter an order under subdivision (2)f ofsubsection (a) on the basis of an order under another state act unless thatorder was based on facts which would currently constitute a ground for an orderunder this section; or

g.         Has engaged indishonest or unethical practices in the securities business; or

h.         Is insolvent, eitherin the sense that his liabilities exceed his assets or in the sense that hecannot meet his obligations as they mature; but the Administrator may not enteran order against a dealer under this paragraph without a finding of insolvencyas to the dealer; or

i.          Is not qualified onthe basis of such factors as training, experience, and knowledge of thesecurities business, except as otherwise provided in subsection (b).

(a1)      The Administratormay by order deny, suspend, or revoke any registration in whole or in part orrestrict or limit as to any person, office, function, or activity or censurethe registrant if he finds

(1)        That the order is inthe public interest and

(2)        That the applicantor registrant:

a.         Has failedreasonably to supervise his salesmen if he is a dealer; or

b.         Has failed to paythe proper filing fee; but the Administrator may enter only a denial orderunder this clause, and he shall vacate any such order when the deficiency hasbeen corrected.

The Administrator may notinstitute a suspension or revocation proceeding on the basis of a fact ortransaction known to him when registration became effective unless theproceeding is instituted within the next 120 days.

(b)        The followingprovisions govern the application of G.S. 78A‑39(a)(2)i:

(1)        The Administratormay not enter an order against a dealer on the basis of the lack ofqualification of any person other than (i) the dealer himself if he is anindividual or (ii) a salesman of the dealer.

(2)        The Administratormay not enter an order solely on the basis of lack of experience if theapplicant or registrant is qualified by training or knowledge or both or, inthe case of a dealer if he is registered and in good standing under theSecurities Exchange Act of 1934.

(3)        The Administratorshall consider that a salesman who will work under the supervision of aregistered dealer need not have the same qualifications as a dealer.

(4)        The Administratormay by rule provide for an examination which may be written or oral or both, tobe taken by any class of or all applicants.

(c)        The Administratormay by order summarily postpone or suspend registration pending finaldetermination of any proceeding under this section. Upon the entry of theorder, the Administrator shall promptly notify the applicant or registrant, aswell as the employer or prospective employer if the applicant or registrant isa salesman, that it has been entered and of the reasons therefor and thatwithin 20 days after the receipt of a written request the matter will bescheduled for hearing in accordance with Chapter 150B of the General Statutes.If no request for a hearing, other responsive pleading, or submission isreceived by the Administrator within 30 business days of receipt of service ofnotice of the order upon the applicant or registrant and no hearing is orderedby the Administrator, the order shall become final and remain in effect unlessit is modified or vacated by the Administrator. If a hearing is requested orordered, the Administrator, after notice of and opportunity for hearing, maymodify or vacate the order or extend it until final determination.

(d)        If theAdministrator finds that any registrant or applicant for registration is nolonger in existence or has ceased to do business as a dealer or salesman, or issubject to an adjudication of mental incompetence or to the control of acommittee, conservator, or guardian, or cannot be located after reasonablesearch, the Administrator may by order cancel the registration or application.

(e)        Withdrawal fromregistration as a dealer or salesman becomes effective 90 days after receipt ofan application to withdraw or within such shorter period of time as theAdministrator may determine, unless a revocation or suspension proceeding ispending when the application is filed or a proceeding to revoke or suspend orto impose conditions upon the withdrawal is instituted within 90 days after theapplication is filed. If a proceeding is pending or instituted, withdrawalbecomes effective at such time and upon such conditions as the Administrator byorder determines. If no proceeding is pending or instituted and withdrawalautomatically becomes effective, the Administrator may nevertheless institute arevocation or suspension proceeding under G.S. 78A‑39(a)(2)b within oneyear after withdrawal became effective and enter a revocation or suspensionorder as of the last date on which registration was effective.

(f)         No order may beentered under any part of this section except the first sentence of subsection(c) without (i) appropriate prior notice to the applicant or registrant (aswell as the employer or prospective employer if the applicant or registrant isa salesman), (ii) opportunity for hearing, and (iii) written findings of factand conclusions of law. (1925, c. 190, s. 19; 1927, c. 149, s. 19; 1955, c. 436, s. 9; 1959, c.1122; 1971, c. 831, s. 1; 1973, c. 1380; 1983, c. 817, ss. 11‑15; 1997‑456,s. 27; 1997‑462, ss. 1, 2; 2001‑126, s. 3.)