48-2-112. Denial, revocation, suspension, cancellation, or withdrawal of registration.
(a) The commissioner may by order deny, suspend, or revoke any registration under this part if the commissioner finds that:
(1) The order is in the public interest and necessary for the protection of investors; and
(2) The applicant or registrant or, in the case of a broker-dealer or investment adviser, any affiliate, partner, officer, director, or any person occupying a similar status or performing similar functions:
(A) Has filed an application for registration which as of its effective date, or as of any date after filing in the case of an order denying effectiveness, includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(B) Has willfully violated or willfully failed to comply with any provision of this part or a predecessor chapter or any rule or order under this part or a predecessor chapter, including, without limitation, any net capital requirements;
(C) Has been convicted of any felony, or within the previous ten (10) years has been convicted of a misdemeanor involving a security or any aspect of the securities business or any investment-related business;
(D) Is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the securities business or any investment-related business;
(E) Is the subject of an order of the commissioner denying, suspending, or revoking any registration as a broker-dealer, agent, investment adviser, or investment adviser representative, or ordering any person to cease and desist from violating any provision of this part;
(F) Is the subject of any order entered within the past ten (10) years by the securities administrator of any other jurisdiction or by the securities and exchange commission or any other federal or state agency having jurisdiction over investment-related businesses:
(i) Denying or revoking any registration as a broker-dealer, agent, investment adviser, or investment adviser representative, or the substantial equivalent of those terms as defined in this part; or
(ii) Ordering such person to cease and desist from any conduct or practice involving any aspect of the securities business or any investment-related business based on findings of fraud, deceit, or misrepresentation or violations of provisions of laws similar to § 48-2-121(a) or (b);
or is the subject of an order suspending or expelling such person from a national securities exchange or national securities association registered under the Securities Exchange Act of 1934, as amended, or is the subject of a United States post office fraud order; provided, that the commissioner may not:
(a) Institute a revocation or suspension proceeding under this subdivision (a)(2)(F) more than one (1) year from the date of the order relied on; or
(b) Enter an order under this subdivision (a)(2)(F) on the basis of an order under another jurisdiction's act unless that order was based on facts which would currently constitute a ground for an order denying or revoking registration under this part, or is based on findings of fraud, deceit, misrepresentation or violations of provisions of law similar to § 48-2-121(a) and (b);
(G) Has engaged in dishonest or unethical practices in the securities business;
(H) Is insolvent, either in the sense that the applicant's liabilities exceed its assets or in the sense that it cannot meet its obligations as they mature; provided, that the commissioner may not enter an order against a broker-dealer or investment adviser under this subdivision (a)(2)(H) without a specific finding that the broker-dealer or investment adviser is insolvent;
(I) Is not qualified on the basis of such factors as training, experience, and knowledge of the securities business, except as otherwise provided in subsection (c);
(J) Has failed reasonably to supervise such person's agents if the person is a broker-dealer, or such person's investment adviser representatives if the person is an investment adviser; or
(K) Has failed to pay any required fee; provided, that the commissioner shall vacate any such order when the deficiency has been corrected.
(b) The commissioner may not institute a proceeding under subsection (a) based solely on material facts actually known by the commissioner unless an investigation or the proceeding is instituted within one (1) year after the commissioner actually acquires knowledge of the material facts.
(c) The following provisions govern the application of subdivision (a)(2)(I):
(1) The commissioner may not enter an order against a broker-dealer on the basis of the lack of qualification of any person other than:
(A) The broker-dealer personally if the broker-dealer is an individual;
(B) A general partner, officer, director, or controlling person of such broker-dealer; or
(C) An agent of such broker-dealer.
(2) The commissioner may not enter an order against an investment adviser on the basis of the lack of qualification of any person other than:
(A) The investment adviser personally if the investment adviser is an individual;
(B) A general partner, officer, director, or controlling person of such investment adviser; or
(C) An investment adviser representative.
(3) The commissioner may not enter an order solely on the basis of lack of experience if the applicant or registrant is qualified by training or knowledge or both.
(4) The commissioner shall consider that an agent who will work under the supervision of a registered broker-dealer need not have the same qualifications as such broker-dealer.
(5) The commissioner shall consider that an investment adviser is not necessarily qualified solely on the basis of experience as a broker-dealer or agent. When the commissioner finds that an applicant for registration (including a renewal of an effective registration) as a broker-dealer is not qualified as an investment adviser, the commissioner may by order condition the applicant's registration as a broker-dealer upon the registrant's not transacting business in this state as an investment adviser.
(6) The commissioner may by rule provide for an examination, which may be written or oral or both, to be taken by any class of or all applicants for registration as a broker-dealer or investment adviser, as well as persons who represent or will represent a broker-dealer or an investment adviser in doing any broker-dealer or investment adviser activities.
(7) The commissioner shall consider that an investment adviser representative who will work under the supervision of a registered investment adviser need not have the same qualification as such investment adviser.
(d) In any case in which the commissioner is authorized to deny, revoke, or suspend the registration of a broker-dealer, agent, investment adviser, investment adviser representative, or applicant for broker-dealer, agent, investment adviser, or investment adviser representative registration, the commissioner may, in lieu of or in addition to such disciplinary action, impose a civil penalty in an amount not to exceed five thousand dollars ($5,000) for all violations for any single transaction.
(e) Pending final determination whether or not any registration under this section shall be revoked, the commissioner may by order suspend such registration, if after notice and opportunity for hearing, the commissioner finds such suspension to be in the public interest and necessary for the protection of investors.
(f) (1) Upon such terms and conditions as the commissioner deems in the public interest and necessary for the protection of investors, any registered broker-dealer, agent, investment adviser, or investment adviser representative may withdraw from registration by filing a written notice of withdrawal with the commissioner or by filing a notice of withdrawal through a designated filing depository.
(2) Withdrawal from registration as a broker-dealer, agent, investment adviser, or investment adviser representative becomes effective thirty (30) days after receipt of an application to withdraw or within such shorter period of time as the commissioner by order may permit.
(g) If the commissioner finds that any registered broker-dealer, agent, investment adviser, or investment adviser representative is no longer in existence or has ceased to do business as a broker-dealer, agent, investment adviser, or investment adviser representative, the commissioner shall by order cancel the registration of such broker-dealer, agent, investment adviser, or investment adviser representative.
48-2-112. Denial, revocation, suspension, cancellation, or withdrawal of registration.
(a) The commissioner may by order deny, suspend, or revoke any registration under this part if the commissioner finds that:
(1) The order is in the public interest and necessary for the protection of investors; and
(2) The applicant or registrant or, in the case of a broker-dealer or investment adviser, any affiliate, partner, officer, director, or any person occupying a similar status or performing similar functions:
(A) Has filed an application for registration which as of its effective date, or as of any date after filing in the case of an order denying effectiveness, includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(B) Has willfully violated or willfully failed to comply with any provision of this part or a predecessor chapter or any rule or order under this part or a predecessor chapter, including, without limitation, any net capital requirements;
(C) Has been convicted of any felony, or within the previous ten (10) years has been convicted of a misdemeanor involving a security or any aspect of the securities business or any investment-related business;
(D) Is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the securities business or any investment-related business;
(E) Is the subject of an order of the commissioner denying, suspending, or revoking any registration as a broker-dealer, agent, investment adviser, or investment adviser representative, or ordering any person to cease and desist from violating any provision of this part;
(F) Is the subject of any order entered within the past ten (10) years by the securities administrator of any other jurisdiction or by the securities and exchange commission or any other federal or state agency having jurisdiction over investment-related businesses:
(i) Denying or revoking any registration as a broker-dealer, agent, investment adviser, or investment adviser representative, or the substantial equivalent of those terms as defined in this part; or
(ii) Ordering such person to cease and desist from any conduct or practice involving any aspect of the securities business or any investment-related business based on findings of fraud, deceit, or misrepresentation or violations of provisions of laws similar to § 48-2-121(a) or (b);
or is the subject of an order suspending or expelling such person from a national securities exchange or national securities association registered under the Securities Exchange Act of 1934, as amended, or is the subject of a United States post office fraud order; provided, that the commissioner may not:
(a) Institute a revocation or suspension proceeding under this subdivision (a)(2)(F) more than one (1) year from the date of the order relied on; or
(b) Enter an order under this subdivision (a)(2)(F) on the basis of an order under another jurisdiction's act unless that order was based on facts which would currently constitute a ground for an order denying or revoking registration under this part, or is based on findings of fraud, deceit, misrepresentation or violations of provisions of law similar to § 48-2-121(a) and (b);
(G) Has engaged in dishonest or unethical practices in the securities business;
(H) Is insolvent, either in the sense that the applicant's liabilities exceed its assets or in the sense that it cannot meet its obligations as they mature; provided, that the commissioner may not enter an order against a broker-dealer or investment adviser under this subdivision (a)(2)(H) without a specific finding that the broker-dealer or investment adviser is insolvent;
(I) Is not qualified on the basis of such factors as training, experience, and knowledge of the securities business, except as otherwise provided in subsection (c);
(J) Has failed reasonably to supervise such person's agents if the person is a broker-dealer, or such person's investment adviser representatives if the person is an investment adviser; or
(K) Has failed to pay any required fee; provided, that the commissioner shall vacate any such order when the deficiency has been corrected.
(b) The commissioner may not institute a proceeding under subsection (a) based solely on material facts actually known by the commissioner unless an investigation or the proceeding is instituted within one (1) year after the commissioner actually acquires knowledge of the material facts.
(c) The following provisions govern the application of subdivision (a)(2)(I):
(1) The commissioner may not enter an order against a broker-dealer on the basis of the lack of qualification of any person other than:
(A) The broker-dealer personally if the broker-dealer is an individual;
(B) A general partner, officer, director, or controlling person of such broker-dealer; or
(C) An agent of such broker-dealer.
(2) The commissioner may not enter an order against an investment adviser on the basis of the lack of qualification of any person other than:
(A) The investment adviser personally if the investment adviser is an individual;
(B) A general partner, officer, director, or controlling person of such investment adviser; or
(C) An investment adviser representative.
(3) The commissioner may not enter an order solely on the basis of lack of experience if the applicant or registrant is qualified by training or knowledge or both.
(4) The commissioner shall consider that an agent who will work under the supervision of a registered broker-dealer need not have the same qualifications as such broker-dealer.
(5) The commissioner shall consider that an investment adviser is not necessarily qualified solely on the basis of experience as a broker-dealer or agent. When the commissioner finds that an applicant for registration (including a renewal of an effective registration) as a broker-dealer is not qualified as an investment adviser, the commissioner may by order condition the applicant's registration as a broker-dealer upon the registrant's not transacting business in this state as an investment adviser.
(6) The commissioner may by rule provide for an examination, which may be written or oral or both, to be taken by any class of or all applicants for registration as a broker-dealer or investment adviser, as well as persons who represent or will represent a broker-dealer or an investment adviser in doing any broker-dealer or investment adviser activities.
(7) The commissioner shall consider that an investment adviser representative who will work under the supervision of a registered investment adviser need not have the same qualification as such investment adviser.
(d) In any case in which the commissioner is authorized to deny, revoke, or suspend the registration of a broker-dealer, agent, investment adviser, investment adviser representative, or applicant for broker-dealer, agent, investment adviser, or investment adviser representative registration, the commissioner may, in lieu of or in addition to such disciplinary action, impose a civil penalty in an amount not to exceed five thousand dollars ($5,000) for all violations for any single transaction.
(e) Pending final determination whether or not any registration under this section shall be revoked, the commissioner may by order suspend such registration, if after notice and opportunity for hearing, the commissioner finds such suspension to be in the public interest and necessary for the protection of investors.
(f) (1) Upon such terms and conditions as the commissioner deems in the public interest and necessary for the protection of investors, any registered broker-dealer, agent, investment adviser, or investment adviser representative may withdraw from registration by filing a written notice of withdrawal with the commissioner or by filing a notice of withdrawal through a designated filing depository.
(2) Withdrawal from registration as a broker-dealer, agent, investment adviser, or investment adviser representative becomes effective thirty (30) days after receipt of an application to withdraw or within such shorter period of time as the commissioner by order may permit.
(g) If the commissioner finds that any registered broker-dealer, agent, investment adviser, or investment adviser representative is no longer in existence or has ceased to do business as a broker-dealer, agent, investment adviser, or investment adviser representative, the commissioner shall by order cancel the registration of such broker-dealer, agent, investment adviser, or investment adviser representative.
48-2-112. Denial, revocation, suspension, cancellation, or withdrawal of registration.
(a) The commissioner may by order deny, suspend, or revoke any registration under this part if the commissioner finds that:
(1) The order is in the public interest and necessary for the protection of investors; and
(2) The applicant or registrant or, in the case of a broker-dealer or investment adviser, any affiliate, partner, officer, director, or any person occupying a similar status or performing similar functions:
(A) Has filed an application for registration which as of its effective date, or as of any date after filing in the case of an order denying effectiveness, includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(B) Has willfully violated or willfully failed to comply with any provision of this part or a predecessor chapter or any rule or order under this part or a predecessor chapter, including, without limitation, any net capital requirements;
(C) Has been convicted of any felony, or within the previous ten (10) years has been convicted of a misdemeanor involving a security or any aspect of the securities business or any investment-related business;
(D) Is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the securities business or any investment-related business;
(E) Is the subject of an order of the commissioner denying, suspending, or revoking any registration as a broker-dealer, agent, investment adviser, or investment adviser representative, or ordering any person to cease and desist from violating any provision of this part;
(F) Is the subject of any order entered within the past ten (10) years by the securities administrator of any other jurisdiction or by the securities and exchange commission or any other federal or state agency having jurisdiction over investment-related businesses:
(i) Denying or revoking any registration as a broker-dealer, agent, investment adviser, or investment adviser representative, or the substantial equivalent of those terms as defined in this part; or
(ii) Ordering such person to cease and desist from any conduct or practice involving any aspect of the securities business or any investment-related business based on findings of fraud, deceit, or misrepresentation or violations of provisions of laws similar to § 48-2-121(a) or (b);
or is the subject of an order suspending or expelling such person from a national securities exchange or national securities association registered under the Securities Exchange Act of 1934, as amended, or is the subject of a United States post office fraud order; provided, that the commissioner may not:
(a) Institute a revocation or suspension proceeding under this subdivision (a)(2)(F) more than one (1) year from the date of the order relied on; or
(b) Enter an order under this subdivision (a)(2)(F) on the basis of an order under another jurisdiction's act unless that order was based on facts which would currently constitute a ground for an order denying or revoking registration under this part, or is based on findings of fraud, deceit, misrepresentation or violations of provisions of law similar to § 48-2-121(a) and (b);
(G) Has engaged in dishonest or unethical practices in the securities business;
(H) Is insolvent, either in the sense that the applicant's liabilities exceed its assets or in the sense that it cannot meet its obligations as they mature; provided, that the commissioner may not enter an order against a broker-dealer or investment adviser under this subdivision (a)(2)(H) without a specific finding that the broker-dealer or investment adviser is insolvent;
(I) Is not qualified on the basis of such factors as training, experience, and knowledge of the securities business, except as otherwise provided in subsection (c);
(J) Has failed reasonably to supervise such person's agents if the person is a broker-dealer, or such person's investment adviser representatives if the person is an investment adviser; or
(K) Has failed to pay any required fee; provided, that the commissioner shall vacate any such order when the deficiency has been corrected.
(b) The commissioner may not institute a proceeding under subsection (a) based solely on material facts actually known by the commissioner unless an investigation or the proceeding is instituted within one (1) year after the commissioner actually acquires knowledge of the material facts.
(c) The following provisions govern the application of subdivision (a)(2)(I):
(1) The commissioner may not enter an order against a broker-dealer on the basis of the lack of qualification of any person other than:
(A) The broker-dealer personally if the broker-dealer is an individual;
(B) A general partner, officer, director, or controlling person of such broker-dealer; or
(C) An agent of such broker-dealer.
(2) The commissioner may not enter an order against an investment adviser on the basis of the lack of qualification of any person other than:
(A) The investment adviser personally if the investment adviser is an individual;
(B) A general partner, officer, director, or controlling person of such investment adviser; or
(C) An investment adviser representative.
(3) The commissioner may not enter an order solely on the basis of lack of experience if the applicant or registrant is qualified by training or knowledge or both.
(4) The commissioner shall consider that an agent who will work under the supervision of a registered broker-dealer need not have the same qualifications as such broker-dealer.
(5) The commissioner shall consider that an investment adviser is not necessarily qualified solely on the basis of experience as a broker-dealer or agent. When the commissioner finds that an applicant for registration (including a renewal of an effective registration) as a broker-dealer is not qualified as an investment adviser, the commissioner may by order condition the applicant's registration as a broker-dealer upon the registrant's not transacting business in this state as an investment adviser.
(6) The commissioner may by rule provide for an examination, which may be written or oral or both, to be taken by any class of or all applicants for registration as a broker-dealer or investment adviser, as well as persons who represent or will represent a broker-dealer or an investment adviser in doing any broker-dealer or investment adviser activities.
(7) The commissioner shall consider that an investment adviser representative who will work under the supervision of a registered investment adviser need not have the same qualification as such investment adviser.
(d) In any case in which the commissioner is authorized to deny, revoke, or suspend the registration of a broker-dealer, agent, investment adviser, investment adviser representative, or applicant for broker-dealer, agent, investment adviser, or investment adviser representative registration, the commissioner may, in lieu of or in addition to such disciplinary action, impose a civil penalty in an amount not to exceed five thousand dollars ($5,000) for all violations for any single transaction.
(e) Pending final determination whether or not any registration under this section shall be revoked, the commissioner may by order suspend such registration, if after notice and opportunity for hearing, the commissioner finds such suspension to be in the public interest and necessary for the protection of investors.
(f) (1) Upon such terms and conditions as the commissioner deems in the public interest and necessary for the protection of investors, any registered broker-dealer, agent, investment adviser, or investment adviser representative may withdraw from registration by filing a written notice of withdrawal with the commissioner or by filing a notice of withdrawal through a designated filing depository.
(2) Withdrawal from registration as a broker-dealer, agent, investment adviser, or investment adviser representative becomes effective thirty (30) days after receipt of an application to withdraw or within such shorter period of time as the commissioner by order may permit.
(g) If the commissioner finds that any registered broker-dealer, agent, investment adviser, or investment adviser representative is no longer in existence or has ceased to do business as a broker-dealer, agent, investment adviser, or investment adviser representative, the commissioner shall by order cancel the registration of such broker-dealer, agent, investment adviser, or investment adviser representative.
