2014 New Hampshire Revised Statutes
Title XXXVIII - SECURITIES
Chapter 421-B - SECURITIES
Section 421-B:10 - Denial, Revocation, Suspension, Cancellation and Withdrawal of Application.

    421-B:10 Denial, Revocation, Suspension, Cancellation and Withdrawal of Application. –
    I. The secretary of state may by order deny, suspend, or revoke any license or application, or bar any person from licensure if he or she finds:
       (a) That the order is in the public interest, and
       (b) That the applicant or licensee or, in the case of a broker-dealer, issuer-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, issuer-dealer, or investment adviser:
          (1) Has filed an application for licensing 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 light of the circumstances under which it was made, false or misleading with respect to any material fact;
          (2) Has willfully violated or failed to comply with any provision of this title or a predecessor law, or of any other state's or Canadian province's securities laws, or the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, or any rule under any of such statutes, or any order thereunder of which he has notice and to which he is subject;
          (3) Has been convicted, within the past 10 years, of any misdemeanor involving a security or any aspect of the securities business, or any felony, unless annulled;
          (4) Is permanently, preliminarily, 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;
          (5) Is the subject of an order of the secretary of state denying, suspending, or revoking any license as a broker-dealer, issuer-dealer, agent, or investment adviser;
          (5-a) Is the subject of an adjudication or order entered after notice and opportunity for hearing by an administrator of another state, federal agency, or Canadian province that reflects that person has violated the securities laws of another state or Canadian province.
          (6) Is the subject of an order entered within the past 5 years by the securities administrator of any other state or by the Securities and Exchange Commission denying, suspending, or revoking licenses or registration as a broker-dealer, issuer-dealer, agent, or investment adviser, or the substantial equivalent of those terms, 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 Postal Service fraud order or has been convicted within the past 10 years of any misdemeanor involving a security or any aspect of the securities business, or any felony which has not been annulled by a court;
          (7) Has engaged in dishonest or unethical practices in the conduct of business in the state of New Hampshire or elsewhere;
          (8) Has failed to maintain the minimum net capital or to comply with the limitation on aggregate indebtedness which the secretary of state by rule prescribes;
          (9) Is not qualified on the basis of such factors as training, experience, and knowledge of the securities business, except as otherwise provided in this section; or
          (10) Has failed reasonably to supervise his agents if he is a broker-dealer, issuer-dealer, or his employees if he is an investment adviser; or
          (11) Has failed to pay the proper filing fee; but the secretary of state may enter only a denial order under this clause, and he shall vacate any such order when the deficiency has been corrected; or
          (12) Has offered or sold securities in this state through any unlicensed agent; or
          (13) Has made any material misrepresentation to the secretary of state, or upon request reasonably made by the secretary of state, has withheld or concealed information from, or refused to furnish information to, the secretary of state; or
          (14) For other good cause shown.
    II. The following provisions govern the application of RSA 421-B:10, I(b)(9):
       (a) The secretary of state may not enter an order against a broker-dealer on the basis of the lack of qualification of any person other than the broker-dealer himself if he is an individual, or an agent of the broker-dealer.
       (b) The secretary of state may not enter an order against an investment adviser on the basis of the lack of qualification of any person other than the investment adviser himself if he is an individual, or any other person who represents the investment adviser in doing any of the acts which make him an investment adviser.
       (c) The secretary of state may not enter an order solely on the basis of lack of experience if the applicant or licensee is qualified by training or knowledge or both.
       (d) The secretary of state may consider that an agent who will work under the supervision of a licensed broker-dealer need not have the same qualifications as a broker-dealer.
       (e) The secretary of state may consider that an investment adviser is not necessarily qualified solely on the basis of experience as a broker-dealer or agent. When he finds that an applicant for initial or renewal licensing as a broker-dealer is not qualified as an investment adviser, he may by order condition the applicant's license as a broker-dealer upon his not transacting business in this state as an investment adviser.
       (f) The secretary of state 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 make him an investment adviser.
    III. The secretary of state may issue an order requiring the person to whom any license has been granted to show cause why the license should not be revoked. The order shall be calculated to give reasonable notice of the time and place for the revocation hearing, and shall state the reasons for the issuance of the order. The secretary of state may by order summarily postpone or suspend any license pending final determination of any order to show cause, or of any other proceeding under this section, provided he finds that the public interest would be irreparably harmed by delay in issuing such order. Upon the entry of the order, the secretary of state shall promptly notify the applicant or licensee, as well as the employer or prospective employer if the applicant or licensee is an agent, that it has been entered and of the reasons for the order and that within 10 days after the receipt of a written request the matter will be set down for hearing. If the person to whom an order to show cause is issued fails to request a hearing within 30 days of receipt of such order, and none is ordered by the secretary of state, then such person shall be deemed in default, and the order shall, on the thirty-first day, become permanent, and shall remain in full force and effect until and unless later modified or vacated by the secretary of state, for good cause shown. If a hearing is requested or ordered, the secretary of state, after notice of and opportunity for hearing, may modify or vacate the order or extend it until final determination.
    III-a. All hearings shall be conducted in accordance with the rules adopted pursuant to this chapter. After the hearing, the secretary of state shall enter an order making such disposition of the matters as the facts require. If the person to whom the license was granted fails to appear at a hearing of which he has been duly notified, such person shall be deemed in default and the proceeding may be determined against him upon consideration of the order to show cause, the allegations of which may be deemed to be true. The secretary of state may adopt rules of procedure concerning all proceedings conducted pursuant to this section.
    IV. If the secretary of state finds that any licensee or applicant for license is no longer in existence or has ceased to do business as a broker-dealer, issuer-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 secretary of state may by order revoke the license or deny the application. The secretary of state may deem abandoned and withdrawn any application for licensure made pursuant to this chapter, if any applicant fails to respond in writing within 90 days to a written request from the secretary of state requesting a response.
    V. Withdrawal of a license as a broker-dealer, issuer-dealer, agent, or investment adviser becomes effective 30 days after receipt of an application to withdraw or within such shorter period of time as the secretary of state 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 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 secretary of state by order determines. If no proceeding is pending or instituted and withdrawal automatically becomes effective, the secretary of state may nevertheless institute a revocation or suspension proceeding under RSA 421-B:10, I(b)(2) within one year after withdrawal became effective and enter a revocation or suspension order as of the last date on which registration was effective.
    VI. In lieu of, or in addition to, any such order to suspend or revoke any license or application, the secretary of state may, upon hearing, assess an administrative fine of not more than $2,500 per violation.

Source. 1981, 214:1. 1987, 411:2. 1990, 76:1. 1991, 355:76, 89, II. 1992, 288:31, 42, 43. 1997, 112:5-9. 1999, 90:2. 2003, 156:4, eff. Aug. 16, 2003. 2008, 332:2, eff. Jan. 1, 2009. 2010, 101:3, eff. July 1, 2010.