- refusal to obey subpoena from Administrator
- can lead to contempt of court
Issue cease and desist orders
- Administrator may issue a cease and desist order without a hearing
- enjoined, person who is the subject of an injunction
- cease and desist orders ARE NOT stop orders
Case study
- agent is registered in Illinois and plans to sell security
- Administrator considers security ineligible for sale
- Administrator orders agent to stop sales of ineligible security immediately
- Verdict: Administrator issued cease and desist because security was ineligible for sale
formal order requirements
1. give appropriate notice to people it will affect
2. grant opportunity for a hearing
3. provide findings of fact and conclusions of law
Deny, suspend, cancel, or revoke registration
- administrator can revoke registration of B/3, IA's, IARs
Denial, revocation, suspension
- has filed an incomplete, false, or misleading registration application
- has willfully violated the USA
- has been convicted of a securities-related misdemeanor within the last 10 years
- has been convicted of any felony within the last 10 years
- has been enjoined by law from securities business
- is subject to another Administrator's denial, revocation, or suspension
- engaged in dishonest or unethical securities practices
- is insolvent
- subject to adjudication that the B/D has willfully violated the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, or the Commodities Exchange Act
- has failed to reasonably supervise his agents or employees
- has failed to pay application filing fees
- is not qualified on the basis of training, lack of experience, and knowledge of the securities business
Note
- misdemeanor in one state is a felony
- administrator must consider crime in state where it occurred
to enter order to deny, suspend or revoke
- prior notice to applicant
- opportunity for a hearing
- written findings of fact and conclusions of law
Lack of qualification
- administrator may not base a denial of a person's registration solely on his lack of experience
- administrator may say B/D is not qualified on experience
Summary powers
- acting summarily, administrator suspends registration without a hearing process
Quiz 2L
1. With regard to the powers of the Administrator, which of the following statements are NOT true?
- The Administrator MUST seek an injunction to issue a cease and desist order
- the USA REQUIRES an Administrator to conduct a full hearing, public or private, before issuing a cease and desist order
- The USA grants the Administrator the power to issue injunctions to force compliance with the provisions of the act.
- In conducting an investigation, an Administrator can compel the testimony of witnesses
- An administrator may deny the registration of a securities professional who has been convicted of any felony within the past 10 years, but must provide a hearing, if requested in writing, within 15 days.
Securities Issues
Can deny, suspend, or revoke
- the applicant files a false or incomplete statement
- the applicant is in violation of the USA
- the applicant is engaged in a method of business that is illegal
- the applicant has prepared a fraudulent registration
- the underwriter charges unreasonable fees
- the issue is subject to a court injunction
- the registrant is subject to an administrative stop order of any other state
no stop order WITHOUT
- appropriate prior notice to the applicant or registrant, the issuer, and the person on whose behalf the securities are to be or have been offered
- opportunity for hearing
- written findings of fact and conclusions of law
vacated, the lifting of a stop order
No comments:
Post a Comment