Vermont § 5412 - Denial, revocation, suspension, withdrawal, restriction, condition, or limitations of registration

§ 5412. Denial, revocation, suspension, withdrawal, restriction, condition, or limitations of registration

• (a) If the Commissioner finds that the order is in the public interest and subsection
  (d) of this section authorizes the action, an order issued under this chapter may
  deny an application, or may condition or limit registration of an applicant to be
  a broker-dealer, agent, investment adviser, or investment adviser representative,
  and, if the applicant is a broker-dealer or investment adviser, of a partner, officer,
  director, or person having a similar status or performing similar functions, or a
  person directly or indirectly in control, of the broker-dealer or investment adviser. (b) If the Commissioner finds that the order is in the public interest and subsection
  (d) of this section authorizes the action, an order issued under this chapter may
  revoke, suspend, condition, or limit the registration of a registrant and, if the
  registrant is a broker-dealer or investment adviser, of a partner, officer, director,
  or person having a similar status or performing similar functions, or a person directly
  or indirectly in control, of the broker-dealer or investment adviser. However, the
  Commissioner may not: (1) institute a revocation or suspension proceeding under this subsection based on an
  order issued under a law of another state that is reported to the Commissioner or
  a designee of the Commissioner more than one year after the date of the order on which
  it is based; or (2) under subdivision (d)(5)(A) or (B) of this section, issue an order on the basis of
  an order issued under the securities act of another state unless the other order was
  based on conduct for which subsection (d) of this section would authorize the action
  had the conduct occurred in this State. (c) If the Commissioner finds that the order is in the public interest and subdivisions
  (d)(1) through (6), (8), (9), (10), (12), or (13) of this section authorize the action,
  an order under this chapter may censure, impose a bar on, or impose a civil penalty
  on a registrant in an amount not more than $15,000.00 for each violation and recover
  the costs of the investigation from the registrant, and, if the registrant is a broker-dealer
  or investment adviser, a partner, officer, director, or person having a similar status
  or performing similar functions, or a person directly or indirectly in control of
  the broker-dealer or investment adviser. The limitations on civil penalties contained
  in this subsection shall not apply to settlement agreements. (d) A person may be disciplined under subsections (a) through (c) of this section if the
  person: (1) has filed an application for registration in this State under this chapter or the
  predecessor act within the previous 10 years, which, as of the effective date of registration
  or as of any date after filing in the case of an order denying effectiveness, was
  incomplete in any material respect or contained a statement that, in light of the
  circumstances under which it was made, was false or misleading with respect to a material
  fact; (2) willfully violated or willfully failed to comply with this chapter or the predecessor
  act or a rule adopted or order issued under this chapter or the predecessor act within
  the previous 10 years. As used in this subdivision, the term “willfully” means purposely
  or willingly committing the act or making the omission and does not require an intent
  to violate the law or to injure another or to acquire any advantage; (3) has been convicted of a felony or within the previous 10 years has been convicted
  of a misdemeanor involving a security, a commodity future or option contract, or an
  aspect of a business involving securities, commodities, investments, franchises, insurance,
  banking, or finance; (4) is enjoined or restrained by a court of competent jurisdiction in an action instituted
  by the Commissioner under this chapter or the predecessor act, a state, the Securities
  and Exchange Commission, or the United States from engaging in or continuing an act,
  practice, or course of business involving an aspect of a business involving securities,
  commodities, investments, franchises, insurance, banking, or finance; (5) is the subject of an order, issued after notice and opportunity for hearing by: (A) the securities or other financial services regulator of a state or the Securities
  and Exchange Commission or other federal agency denying, revoking, barring, or suspending
  registration as a broker-dealer, agent, investment adviser, federal covered investment
  adviser, or investment adviser representative; (B) the securities regulator of a state or the Securities and Exchange Commission against
  a broker-dealer, agent, investment adviser, investment adviser representative, or
  federal covered investment adviser; (C) the Securities and Exchange Commission or a self-regulatory organization suspending
  or expelling the registrant from membership in the self-regulatory organization; (D) a court adjudicating a U.S. Postal Service fraud order; (E) the insurance regulator of a state denying, suspending, or revoking registration as
  an insurance agent; or (F) a depository institution or financial services regulator suspending or barring the
  person from the depository institution or other financial services business; (6) is the subject of an adjudication or determination, after notice and opportunity for
  hearing, by the Securities and Exchange Commission, the Commodity Futures Trading
  Commission, the Federal Trade Commission, a federal depository institution regulator,
  or a depository institution, insurance, or other financial services regulator of a
  state that the person 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 Commodity Exchange Act, the securities or commodities law of a
  state, or a federal or state law under which a business involving investments, franchises,
  insurance, banking, or finance is regulated; (7) is insolvent, either because the person’s liabilities exceed the person’s assets or
  because the person cannot meet the person’s obligations as they mature, but the Commissioner
  may not enter an order against an applicant or registrant under this subdivision without
  a finding of insolvency as to the applicant or registrant; (8) refuses to allow or otherwise impedes the Commissioner from conducting an audit or
  inspection under subsection 5411(d) of this chapter or refuses access to a registrant’s
  office to conduct an audit or inspection under subsection 5411(d); (9) has failed to supervise reasonably an agent, investment adviser representative, or
  other individual, if the agent, investment adviser representative, or other individual
  was subject to the person’s supervision and committed a violation of this chapter
  or the predecessor act or a rule adopted or order issued under this chapter or the
  predecessor act within the previous 10 years; (10) has not paid the proper filing fee within 30 days after having been notified by the
  Commissioner of a deficiency, but the Commissioner shall vacate an order under this
  subdivision when the deficiency is corrected; (11) after notice and opportunity for a hearing, has been found within the previous 10
  years: (A) by a court of competent jurisdiction to have willfully violated the laws of a foreign
  jurisdiction under which the business of securities, commodities, investment, franchises,
  insurance, banking, or finance is regulated; (B) to have been the subject of an order of a securities regulator of a foreign jurisdiction
  denying, revoking, or suspending the right to engage in the business of securities
  as a broker-dealer, agent, investment adviser, investment adviser representative,
  or similar person; or (C) to have been suspended or expelled from membership by or participation in a securities
  exchange or securities association operating under the securities laws of a foreign
  jurisdiction; (12) is the subject of a cease and desist order issued by the Securities and Exchange Commission
  or issued under the securities, commodities, investment, franchise, banking, finance,
  or insurance laws of a state; (13) has engaged in dishonest or unethical practices in the securities, commodities, investment,
  franchise, banking, finance, or insurance business within the previous 10 years; or (14) is not qualified on the basis of factors such as training, experience, and knowledge
  of the securities business. However, in the case of an application by an agent for
  a broker-dealer that is a member of a self-regulatory organization or by an individual
  for registration as an investment adviser representative, a denial order may not be
  based on this subdivision if the individual has successfully completed all examinations
  required by subsection (e) of this section. The Commissioner may require an applicant
  for registration under section 5402 or 5404 of this chapter who has not been registered
  in a state within the two years preceding the filing of an application in this State
  to complete successfully an examination. (e) A rule adopted or order issued under this chapter may require that an examination,
  including an examination developed or approved by an organization of securities regulators,
  be completed successfully by a class of individuals or all individuals. An order issued
  under this chapter may waive, in whole or in part, an examination as to an individual,
  and a rule adopted under this chapter may waive, in whole or in part, an examination
  as to a class of individuals if the Commissioner determines that the examination is
  not necessary or appropriate in the public interest and for the protection of investors. (f) If the Commissioner finds it necessary to preserve the public welfare, the Commissioner
  may suspend or deny an application summarily; restrict, condition, limit, or suspend
  a registration; or censure, bar, or impose a civil penalty on a registrant before
  final determination of an administrative proceeding. Upon the issuance of an order,
  the Commissioner shall promptly notify each person subject to the order that the order
  has been issued, the reasons for the action, and that, within 15 days after the receipt
  of a request in a record from the person, the matter will be scheduled for a hearing.
  If a hearing is not requested and none is ordered by the Commissioner within 30 days
  after the date of service of the order, the order becomes final 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 the order until final determination. (g) An order issued may not be issued under this section, except under subsection (f)
  of this section, without: (1) appropriate notice to the applicant or registrant; (2) opportunity for hearing; and (3) findings of fact and conclusions of law in a record in accordance with the procedures
  set forth in 3 V.S.A. chapter 25 (Administrative Procedure Act). (h) A person that controls, directly or indirectly, a person not in compliance with this
  section may be disciplined by order of the Commissioner under subsections (a) through
  (c) of this section to the same extent as the noncomplying person, unless the controlling
  person did not know, and in the exercise of reasonable care could not have known,
  of the existence of conduct that is a ground for discipline under this section. (i) The Commissioner may not institute a proceeding under subsection (a), (b), or (c)
  of this section based solely on material facts actually known by the Commissioner
  unless an investigation or the proceeding is instituted within one year after the
  Commissioner actually acquires knowledge of the material facts. (Added 2005, No. 11, § 1, eff. July 1, 2006; amended 2005, No. 122 (Adj. Sess.), § 13; 2017, No. 80, § 3.)