§ 7-11-212 - Grounds for denial, suspension, and revocation.
SECTION 7-11-212
§ 7-11-212 Grounds for denial, suspension,and revocation. – (a) The director may by order:
(1) Deny, suspend, or revoke a license;
(2) Limit the securities activities that an applicant orlicensed person may perform in this state;
(3) Bar a broker dealer or investment adviser from conductingany securities activities in this state;
(4) Bar an applicant or licensed person from association witha licensed broker dealer or investment adviser; or
(5) Bar from employment with a licensed broker dealer orinvestment adviser a person who is a partner, officer, director, or a personoccupying a similar status or performing a similar function for an applicant orlicensed person.
(b) These actions may be taken only if the director findsthat the order is in the public interest and that the applicant or licensedperson or, in the case of a broker dealer or investment adviser, a partner,officer, or director, a person occupying a similar status or performing similarfunctions, or a person directly or indirectly controlling the broker dealer orinvestment adviser who has done any of the following:
(1) Filed an application for licensing with the directorwhich, as of its effective date or any date after filing in the case of anorder denying effectiveness, contained any untrue statement of material fact oromitted to state a material fact necessary in order to make the statementsmade, in light of the circumstances under which they were made, not misleading;
(2) Willfully violated or willfully failed to comply withthis chapter, a predecessor act, or a rule or order under this chapter or apredecessor act;
(3) Is the subject of an adjudication or determination, afternotice and opportunity for hearing, within the last five (5) years by asecurities agency or administrator of another state or a court of competentjurisdiction that the person has willfully violated the Securities Act of 1933,15 U.S.C. § 77a et seq., the Securities Exchange Act of 1934, 15 U.S.C.§ 78a et seq., the Investment Advisers Act of 1940, 15 U.S.C. § 80b-1et seq., the Investment Company Act of 1940, 15 U.S.C. §§ 80a-1 etseq.,or the Commodity Exchange Act, 7 U.S.C. § 2 et seq., or thesecurities law of any other state but only if the acts constituting theviolation of that state's law would constitute a violation of this chapter hadthe acts occurred in this state;
(4) Within the last ten (10) years, has been convicted of afelony or misdemeanor which the director finds:
(i) Involves the purchase or sale of a security; the takingof a false oath, the making of a false report, bribery, perjury, burglary,robbery, or attempt or conspiracy to commit any of the foregoing offenses;
(ii) Arises out of the conduct of business as a brokerdealer, investment adviser, depository institution, insurance company, orfiduciary; or
(iii) Involves the larceny, theft, robbery, extortion,forgery, counterfeiting, fraudulent concealment, embezzlement, fraudulentconversion, or misappropriation of funds or securities or attempt or conspiracyto commit any of the above offenses;
(5) Is permanently or temporarily enjoined by a court ofcompetent jurisdiction from acting as an investment adviser, underwriter,broker dealer, or as an affiliated person or employee of an investment company,depository institution, or insurance company, or from engaging in or continuingconduct or practice in connection with any of the foregoing activities, or inconnection with the purchase or sale of a security;
(6) Is the subject of an order of the director denying,suspending, or revoking the person's license as a broker dealer, salesrepresentative, investment adviser, or investment adviser representative;
(7) Is the subject of any of the following orders that arecurrently effective and were issued within the last five (5) years:
(i) An order by the securities agency or administrator ofanother state or Canadian province or territory, or by the securities andexchange commission, entered after notice and opportunity for hearing, denying,suspending, or revoking the person's license as a broker dealer, salesrepresentative, investment adviser, or investment adviser representative, orthe substantial equivalent of those terms as defined in this chapter;
(ii) A suspension or expulsion from membership in orassociation with a member of a self regulatory organization registered underthe Securities Exchange Act of 1934 or the Commodity Exchange Act;
(iii) A United States postal service fraud order;
(iv) A cease and desist order entered after notice andopportunity for hearing by the director, the securities agency or administratorof another state, or a Canadian province or territory, the securities andexchange commission, or the commodity futures trading commission; or
(v) An order by the commodity futures trading commissiondenying, suspending, or revoking registration under the Commodity Exchange Act;
(8) Has engaged in unethical or dishonest practices in thesecurities business;
(9) Is insolvent, either in the sense that liabilities exceedassets, or in the sense that obligations cannot be met as they mature, but thedirector may not enter an order against a broker dealer or investment adviserunder this subsection without a finding of insolvency as to the broker dealeror investment adviser;
(10) Is determined by the director in compliance with §7-11-213 not to be qualified on the basis of the lack of training, experience,and knowledge of the securities business;
(11) Has failed reasonably to supervise a salesrepresentative, investment adviser representative, or an employee; or
(12) Has failed to pay the proper filing fee within thirty(30) days after being notified by the director of a deficiency, but thedirector shall vacate an order under this subsection when the deficiency iscorrected.
(c) The director may not begin a proceeding on the basis of afact or transaction known to the director when the license became effectiveunless the proceeding is begun within the ninety (90) days after issuance ofthe license.
(d) If the director finds that an applicant or licensedperson is no longer in existence, has ceased to do business as a broker dealer,sales representative, investment adviser, or investment adviser representative,is adjudicated mentally incompetent or subjected to the control of a committee,conservator, or guardian, or cannot be located after reasonable search, thedirector may by order deny the application or revoke the license.