Guam § 46205 - Denial, Revocation, Suspension, Cancellation, and Withdrawal

§ 46205. Denial, Revocation, Suspension, Cancellation, and Withdrawal

of Registration.

(a) The Administrator may by order deny, suspend, or revoke any

registration if he finds (1) that the order is in the public interest and (2) that

the applicant or registrant or, in the case of a broker-dealer or investment

adviser, any partner, officer, or director, any person occupying a similar

status or performing similar functions, or any person directly or indirectly

controlling the broker-dealer or investment adviser.

(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, was incomplete in any material respect or

contained any statement which was, in the light of the circumstances

under which it was made, false or misleading with respect to any

material fact;

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(B) has wilfully violated or wilfully failed to comply with any

provision of this Act or a predecessor act or any rule or order under

this Act or a predecessor act;

(C) has been convicted, within the past ten (10) years, of any

misdemeanor involving a security or any aspect of the securities

business, or any felony having as one of its necessary elements a

fraudulent act or an act of dishonesty in the solicitation of, acceptance,

custody, or payment of money or property or a breach of trust;

(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;

(E) is the subject of an order of the Administrator denying,

suspending, or revoking registration as a broker-dealer, agent, or

investment adviser;

(F) is the subject of an order entered within the past five (5) years

by the securities administrator of any other state or by the Securities

and Exchange Commission denying or revoking registration as a

broker-dealer, agent, or investment adviser, or the substantial

equivalent of those terms as defined in this Act, or is the subject of an

order of the Securities and Exchange Commission suspending or

expelling him from a national securities exchange or national securities

association registered under the Securities Exchange Act of 1934, or is

the subject of a United States Post Office fraud order; but (i) the

Administrator may not institute a revocation or suspension proceeding

under clause (F) more than one (1) year from the date of the order

relied on, and (ii) he may not enter an order under clause (F) on the

basis of an order under another state act, unless that order was based

on facts which would currently constitute a ground for an order under

this section;

(G) has engaged in dishonest or unethical practice in the securities

business;

(H) is insolvent, either in the sense that his liabilities exceed his

assets, or in the sense that he cannot meet his obligations as they

mature; but the Administrator may not enter an order against a broker-

dealer or investment adviser under this clause without a findings of

insolvency as to the broker-dealer or investment adviser; or

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(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 (b).

The Administrator may by order deny, suspend, revoke any

registration if he finds (1) that the order is in the public interest and (2)

that the applicant or registrant.

(J) has failed reasonably to supervise his agents if he is a broker-

dealer, or his employees if he is an investment advisor; or

(K) has failed to pay the proper filing fee; but the Administrator

may enter only a denial order under this clause, and he shall vacate any

such order when the deficiency has been corrected.

The Administrator may not institute a suspension or revocation

proceeding on the basis of a fact or transaction known to him when

registration became effective unless the proceeding is instituted within

the next thirty (30) days.

(b) The following provisions govern the application of § 46204

(a)(2)(I):

(1) The Administrator 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 himself if he is an individual or (B) an agent of

the broker-dealer.

(2) The Administrator may not enter an order against an

investment adviser on the basis of the lack of the qualification of any

person other than (A) the investment adviser himself if he is an

individual or (B) any other person who represents the investment

adviser in doing any of the acts which make him an investment

adviser.

(3) The Administrator 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 Administrator shall consider that an agent who will work

under the supervision of a registered broker-dealer need not have the

same qualifications as a broker-dealer.

(5) The Administrator shall consider that an investment adviser is

not necessarily qualified solely on the basis of experience as a broker-

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dealer or agent. When he finds that an applicant for initial or renewal

registration as a broker-dealer is not qualified as an investment adviser,

he may by order condition the applicant's registration as a broker-

dealer upon his not transacting business in this state as an investment

adviser.

(6) The Administrator 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, as well as persons who represent or will represent an

investment adviser in doing any of the acts which makes him an

investment adviser.

(c) The Administrator may by order summarily postpone or suspend

registration pending final determination of any proceeding under this

section. Upon the entry of the order, the Administrator shall promptly

notify the applicant or registrant, as well as the employer or prospective

employer if the applicant or registrant is an agent, that it has been entered

and of the reasons therefor and that within fifteen (15) days after the receipt

of a written request, the matter will be set down for hearing. If no hearing is

requested and none is ordered by the Administrator, the order will remain in

effect until it is modified or vacated by the Administrator. If a hearing is

requested or ordered, the Administrator, after notice of and opportunity for

hearing, may modify or vacate the order or extend it until final

determination.

(d) If the Administrator finds that any registrant or applicant for

registration is no longer in existence or has ceased to do business as a

broker-dealer, agent, or investment adviser, or is subject to an adjudication

of mental incompetence or to the control of a committee, conservator, or

guardian, or cannot be located after reasonable search, the Administrator

may by order cancel the registration or application.

(e) Withdrawal from registration as a broker-dealer, agent, or

investment adviser becomes effective thirty(30) days after receipt of an

application to withdraw, or within such shorter period of time as the

Administrator may determine, unless a revocation or suspension proceeding

is pending when the application is filed or a proceeding to revoke or

suspend or to impose conditions upon the withdrawal is instituted within

thirty (30) days after the application is filed. If a proceeding is pending or

instituted, withdrawal becomes effective at such time and upon such

conditions as the Administrator by order determines. If no proceeding is

pending or instituted, and withdrawal automatically becomes effective, the

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Administrator may nevertheless institute a revocation or suspension

proceeding under § 46204(a)(2)(B) within one (1) year after withdrawal

became effective and enter a revocation or suspension order as of the last

date on which registration was effective.

(f) No order may be entered under any part of this section except the

first sentence of subsection (c) without (1) appropriate prior notice to the

applicant or registrant (as well as the employer or prospective employer if

the applicant or registrant is an agent), (2) opportunity for hearing, and (3)

written findings of fact and conclusions of law.