Arizona § 44-3201 - Grounds for denial, revocation or suspension of license; administrative remedies

§ 44-3201. Grounds for denial, revocation or suspension of license; administrative remedies

A. After a hearing or notice and an opportunity for a hearing as provided in article 7 of this chapter, the commission may enter an order suspending for a period of not more than one year, denying or revoking the license of an investment adviser or investment adviser representative if the commission finds that it is in the public interest and any one or a combination of the following:

1. The application for licensure of the investment adviser or investment adviser representative, any financial statement, document or other exhibit filed with an application or any supplement or amendment to an application is incomplete, inaccurate or misleading.

2. The investment adviser is insolvent or is in an unsound financial condition.

3. The investment adviser or investment adviser representative violates this chapter or any rule or order of the commission adopted or issued under this chapter.

4. The investment adviser or investment adviser representative fails to file with the commission any record, report, financial statement or other information required under this chapter or any rule or order of the commission adopted or issued under this chapter or refuses to permit an examination pursuant to section 44-3132.

5. The investment adviser knowingly retains an unlicensed investment adviser representative who is required to be licensed under this chapter.

6. The investment adviser permits any person to render investment advice in violation of this chapter.

7. The investment adviser representative is not employed by a licensed or federal covered adviser.

8. The investment adviser or investment adviser representative has been convicted within ten years preceding the date of filing an application for licensure as an investment adviser or investment adviser representative, or at any time after the date of filing an application, of a felony or misdemeanor involving a transaction in securities, of which fraud is an essential element or arising out of the conduct of any business involving securities or any aspect of the securities business.

9. The investment adviser or investment adviser representative is permanently or temporarily enjoined by order, judgment or decree of an administrative tribunal or a court of competent jurisdiction from engaging in or continuing any conduct or practice involving a violation of any federal or state securities laws or a violation of any other regulatory licensing requirements.

10. The investment adviser or investment adviser representative is subject to an order of an administrative tribunal, an SRO or the SEC denying, revoking or suspending membership, licensure or registration as a broker or dealer in securities or as an investment adviser or investment adviser representative for at least six months.

11. The investment adviser or investment adviser representative has been found civilly or criminally liable, by any court of competent jurisdiction or other governmental authority in a civil or criminal action not subsequently reversed, suspended or vacated, for any fraudulent act or practice in connection with any aspect of the securities business.

12. The investment adviser fails to reasonably supervise its investment adviser representatives or employees to assure their compliance with this chapter.

13. The investment adviser or investment adviser representative engages in dishonest or unethical practices in the securities industry.

14. The investment adviser or investment adviser representative engages in dishonest or unethical practices in business or financial matters.

B. In addition to denying, revoking or suspending the license, if the commission finds that an investment adviser or investment adviser representative has engaged in an act, practice or transaction described in subsection A, paragraph 6, 12 or 13, the commission may do one or more of the following:

1. Assess administrative penalties.

2. Order the investment adviser or investment adviser representative to cease and desist from engaging in the act, practice or transaction or doing any other act in furtherance of the act, practice or transaction.

3. Take appropriate affirmative action, as prescribed by the commission, to correct the conditions resulting from the act, practice or transaction, including a requirement to provide restitution.

C. If the investment adviser is a partnership, corporation, unincorporated association, limited liability company or trust, it is sufficient cause for denial of licensure if a member of the partnership, an officer or director of the corporation or unincorporated association, a manager of a limited liability company, a trustee or any other fiduciary of a trust or a person controlling, controlled by or under common control with the investment adviser has been found civilly or criminally liable, by any court of competent jurisdiction or other governmental authority in a civil or criminal action not subsequently reversed, suspended or vacated, for any act or omission that would be sufficient grounds for denying the licensure of an individual investment adviser.

D. If the license of an investment adviser or investment adviser representative is revoked or denied, that investment adviser or investment adviser representative may not file with the commission for licensure under this chapter or for registration under chapter 12 of this title for at least one year from the date of the revocation or denial.