2006 New Mexico Statutes - 58-13B-16 — Grounds for denial, revocation and suspension.

58-13B-16. Grounds for denial, revocation and suspension.

A.     The director may by order deny, suspend or revoke any license, limit the investment advisory activities that an applicant or licensed person may perform in this state, bar an applicant or licensed person from association with a licensed broker-dealer or investment adviser or bar a person who is a partner, officer, director or a person occupying a similar status or performing a similar function for an applicant or licensed person if the director finds that:   

(1)     the order is in the public interest; and   

(2)     the applicant or licensed person or, in the case of a broker-dealer or investment adviser, any partner, officer, director or 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 licensing with the director which, as of its effective date, or as of any date after filing in the case of an order denying effectiveness, was incomplete in a material respect or contained a statement that was, in light of the circumstances under which it was made, false or misleading with respect to a material fact;   

(b)     has violated or failed to comply with a provision of the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978], a predecessor act or a rule or order under that act or the predecessor act;   

(c)     is the subject of an adjudication or determination after notice and opportunity for hearing, within the last five years by a securities agency or administrator of another state or a court of competent jurisdiction that the person has 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, or the securities law of any other state, but only if the acts constituting the violation of that state's law would constitute a violation of the New Mexico Securities Act of 1986 or the New Mexico Model State Commodity Code [ 58-13A-1 to 58-13A-22 NMSA 1978] had the acts taken place in this state;   

(d)     within the last six years has pleaded guilty or nolo contendere to or been convicted of a felony or misdemeanor which the director finds: 1) involves the purchase or sale of a security, the taking of a false oath, the making of a false report, bribery, perjury, burglary, robbery, fraud or conspiracy to commit any of the foregoing offenses; 2) arises out of the conduct of business as a broker-dealer, sales representative, investment adviser, investment adviser representative, depository institution, insurance company or fiduciary; or 3) involves the larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulent concealment, embezzlement, fraudulent conversion or misappropriation of funds, property or securities or conspiracy to commit any of the foregoing offenses;   

(e)     is permanently or temporarily enjoined by any court of competent jurisdiction from violating any state or federal securities or commodities law or regulation or from acting as an investment adviser, underwriter, broker-dealer or as an affiliated person or employee of an investment company, depository institution or insurance company or from engaging in or continuing any conduct or practice indicating a lack of fitness to engage in the securities business or any investment-related activity;   

(f)     is the subject of an order of the director denying, suspending or revoking the person's license as a broker-dealer, sales representative, investment adviser or investment adviser representative;   

(g)     is the subject of any of the following orders which are currently effective and were issued within the last five years: 1) an order by the securities agency or administrator of another state, Canadian province or territory or by the securities and exchange commission, entered after notice and opportunity for hearing, denying, suspending or revoking the person's license as a broker-dealer, sales representative, investment adviser, investment adviser representative or the substantial equivalent of those terms as defined in the New Mexico Securities Act of 1986; 2) a suspension or expulsion from membership in or association with a member of a self-regulatory organization registered under the Securities and Exchange Act of 1934 or the Commodity Exchange Act; 3) a United States Postal Service fraud order; 4) a cease and desist order entered after notice and opportunity for hearing by the director, the securities agency or administrator of another state, Canadian province or territory, the securities and exchange commission or the commodity futures trading commission; or 5) an order by the commodities futures trading commission denying, suspending or revoking registration under the Commodity Exchange Act;   

(h)     has engaged in any unethical or dishonest conduct or practice in the securities business or any investment-related activity;   

(i) is insolvent, either in the sense that liabilities exceed assets or in the sense that obligations cannot be met as they mature, but the director may not enter an order against a broker-dealer or investment adviser under this subparagraph without a finding of insolvency as to the broker-dealer or investment adviser;   

(j)     is determined by the director in compliance with Section 17 [ 58-13B-17 NMSA 1978] of the New Mexico Securities Act of 1986 not to be qualified on the basis of the lack of training, experience and knowledge of the securities business;   

(k)     has failed reasonably to supervise sales representatives or investment adviser representatives; or   

(l)     has failed to pay the proper registration fee.   

B.     The director may not institute a proceeding on the basis of a fact or transaction known to the director when the license became effective unless the proceeding is instituted within the next one hundred eighty days following issuance of the license.   

C.     If the director finds that any applicant or licensed person is no longer in existence or has ceased to do business as a broker-dealer, sales representative, investment adviser or investment adviser representative 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 director may by order deny the application or cancel the license.