§ 5604 - Administrative enforcement
§ 5604. Administrative enforcement
(a) If the commissioner determines that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter or that a person has materially aided, is materially aiding, or is about to materially aid an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter, the commissioner may:
(1) issue an order directing the person to cease and desist from engaging in the act, practice, or course of business or to take other action necessary or appropriate to comply with this chapter;
(2) issue an order denying, suspending, revoking, or conditioning the exemptions for a broker-dealer under subdivision 5401(b)(1)(D) or (F) of this chapter or an investment adviser under subdivision 5403(b)(1)(C) of this chapter; or
(3) issue an order under section 5204 of this chapter.
(b) An order under subsection (a) of this section is effective on the date of issuance. Upon issuance of the order, the commissioner shall promptly serve each person subject to the order with a copy of the order and a notice that the order has been entered. The order must include a statement of any civil penalty or costs of investigation the commissioner will seek, a statement of the reasons for the order, and notice that, within 15 days after receipt of a request in a record from the person, the matter will be scheduled for a hearing. If a person subject to the order does not request a hearing and none is ordered by the commissioner within 30 days after the date of service of the order, the order, including the imposition of a civil penalty or requirement for payment of the costs of investigation sought in a statement in the order, becomes final as to that person by operation of law. If a hearing is requested or ordered, the commissioner, after notice of and opportunity for hearing to each person subject to the order, may modify or vacate the order or extend it until final determination.
(c) If a hearing is requested or ordered pursuant to subsection (b) of this section, a hearing must be held in accordance with the provisions of chapter 25 of Title 3 (Administrative Procedure Act). A final order may not be issued unless the commissioner makes findings of fact and conclusions of law in a record in accordance with the requirements of section 812 of Title 3. The final order may make final, vacate, or modify the order issued under subsection (a) of this section.
(d) In a final order under subsection (c) of this section, the commissioner may impose a civil penalty of not more than $15,000.00 for each violation and not more than $1,000,000.00 for more than one violation. The commissioner may also require a person to make restitution or provide disgorgement of any sums shown to have been obtained in violation of this chapter, plus interest at the legal rate. The limitations on civil penalties contained in this subsection shall not apply to settlement agreements.
(e) For purposes of determining any sanction to be imposed under subsections (a) through (d) of this section, the commissioner shall consider among other factors, the frequency and persistence of the conduct constituting a violation of this chapter or a rule or order of the commissioner under this chapter and the number of persons adversely affected by the conduct, and the resources of the person committing the violation.
(f) In a final order, the commissioner may charge the actual cost of an investigation or proceeding for a violation of this chapter or a rule adopted or order issued under this chapter.
(g) If a petition for judicial review of a final order is not filed in accordance with section 5609 of this chapter, the commissioner may file a certified copy of the final order with the clerk of a court of competent jurisdiction. The order so filed has the same effect as a judgment of the court and may be recorded, enforced, or satisfied in the same manner as a judgment of the court.
(h) If a person does not comply with an order under this section, the commissioner may petition a court of competent jurisdiction to enforce the order. The court may not require the commissioner to post a bond in an action or proceeding under this section. If the court finds, after service and opportunity for hearing, that the person was not in compliance with the order, the court may adjudge the person in civil contempt of the order. The court may impose a further civil penalty against the person for contempt in an amount not less than $5,000.00 but not greater than $25,000.00 for each violation and may grant any other relief the court determines is just and proper in the circumstances. (Added 2005, No. 11, § 1, eff. July 1, 2006.)