2006 Utah Code - 61-1-6 — Denial, suspension, revocation, cancellation, or withdrawal of license -- Sanctions.
(1) Subject to the requirements of Subsections (2) and (3), the director, by means of adjudicative proceedings conducted in accordance with Title 63, Chapter 46b, Administrative Procedures Act, may issue an order:
(a) denying, suspending, or revoking any license;
(b) barring or censuring any licensee or any officer, director, partner, or person occupying a similar status or performing similar functions for a licensee from employment with a licensed broker-dealer or investment adviser;
(c) restricting or limiting a licensee as to any function or activity of the business for which a license is required in this state;
(d) imposing a fine; or
(e) any combination of Subsections (1)(a) through (d).
(2) The director may impose the sanctions in Subsection (1) if the director finds that it is in the public interest and finds, with respect to the applicant or licensee or, in the case of a broker-dealer or investment adviser, any partner, officer, or 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, that the person:
(a) has filed an application for a license that, 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 that was, in light of the circumstances under which it was made, false or misleading with respect to any material fact;
(b) has willfully violated or willfully failed to comply with any provision of this chapter or a predecessor act or any rule or order under this chapter or a predecessor act;
(c) was convicted, within the past ten years, of any misdemeanor involving a security or any aspect of the securities business, or any felony;
(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 director or any predecessor denying, suspending, or revoking license as a broker-dealer, agent, investment adviser, or investment adviser representative;
(f) is the subject of:
(i) an adjudication or determination, within the past five years by a securities or commodities agency or administrator of another state, Canadian province or territory, or a court of competent jurisdiction that the person has 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, the Commodity Exchange Act, or the securities or commodities law of any other state; or
(ii) an order entered within the past five years by the securities administrator of any state or Canadian province or territory or by the Securities and Exchange Commission denying or revoking license as a broker-dealer, agent, investment adviser, or investment adviser representative or the substantial equivalent of those terms or is the subject of an order of the Securities and Exchange Commission suspending or expelling the person 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; except that
(iii) the division may not commence agency action to revoke or suspend any license under Subsection (2)(f) more than one year from the date of the order relied on, and the director may not enter an order under Subsection (2)(f) on the basis of an order under another state's law unless that order was based on facts that would currently constitute a ground for an agency action under this section;
(g) has engaged in dishonest or unethical practices in the securities business;
(h) is insolvent, either in the sense that liabilities exceed assets or in the sense that obligations cannot be met as they mature, except that the director may not enter an order against a broker-dealer or investment adviser under this Subsection (2)(h) without a finding of insolvency as to the broker-dealer or investment adviser;
(i) is not qualified on the basis of the lack of training, experience, and knowledge of the securities business, except as otherwise provided in Subsection (6);
(j) has failed reasonably to supervise his agents or employees if the person is a broker-dealer, or his investment adviser representatives or employees if the person is an investment adviser; or
(k) has failed to pay the proper filing fee within 30 days after being notified by the division of a deficiency.
(3) Before the director may issue an order under Subsection (1) that: revokes any license; bars or censures any licensee or any officer, director, partner, or person occupying a similar status or performing similar functions for a licensee from employment with a licensed broker-dealer or investment adviser; or imposes a fine, the Securities Advisory Board shall:
(a) review the order; and
(b) if a majority of the Securities Advisory Board approves the order, authorize the director to issue it.
(4) The division may enter a denial order under Subsection (2)(j) or (k), but shall vacate the order when the deficiency has been corrected.
(5) The division may not institute a suspension or revocation proceeding on the basis of a fact or transaction known to it when the license became effective unless the proceeding is instituted within the next 120 days.
(6) The following provisions govern the application of Subsection (2)(i):
(a) The director may not enter an order against a broker-dealer on the basis of the lack of qualification of any person other than:
(i) the broker-dealer himself if he is an individual; or
(ii) an agent of the broker-dealer.
(b) The director may not enter an order against an investment adviser on the basis of the lack of qualification of any person other than:
(i) the investment adviser himself if he is an individual; or
(ii) an investment adviser representative.
(c) The director may not enter an order solely on the basis of lack of experience if the applicant or licensee is qualified by training or knowledge.
(d) The director shall 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 and that an investment adviser representative who will work under the supervision of a licensed investment adviser need not have the same qualifications as an investment adviser.
(e) (i) The director shall consider that an investment adviser is not necessarily qualified
solely on the basis of experience as a broker-dealer or agent.
(ii) When the director finds that an applicant for a license as a broker-dealer is not
qualified as an investment adviser, the director may condition the applicant's license as a
broker-dealer upon the applicant's not transacting business in this state as an investment adviser.
(f) (i) The division may by rule provide for examinations, which may be written or oral
or both, to be taken by any class of or all applicants.
(ii) The division may by rule or order waive the examination requirement as to a person
or class of persons if the division determines that the examination is not necessary for the
protection of investors.
(7) If the director finds that any licensee or applicant for a license is no longer in
existence, has ceased to do business as a broker-dealer, agent, 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
division may summarily cancel or deny the license or application according to the procedures and
requirements of Title 63, Chapter 46b, Administrative Procedures Act.
(8) (a) Withdrawal from license as a broker-dealer, agent, investment adviser, or
investment adviser representative becomes effective 30 days after receipt of an application to
withdraw or within a shorter period of time as determined by the director, unless:
(i) a revocation or suspension proceeding is pending when the application is filed;
(ii) a proceeding to revoke or suspend or to impose conditions upon the withdrawal is
instituted within 30 days after the application is filed; or
(iii) additional information is requested by the division regarding the withdrawal
application.
(b) (i) If a proceeding described in Subsection (8)(a) is pending or instituted, the director
shall designate by order when and under what conditions the withdrawal becomes effective.
(ii) If additional information is requested, withdrawal is effective 30 days after the
additional information is filed.
(c) (i) If no proceeding is pending or instituted, and withdrawal automatically becomes
effective, the director may initiate a revocation or suspension proceeding under this section
within one year after withdrawal became effective.
(ii) The director shall enter any order under Subsection (2)(b) as of the last date on which
the license was effective.
Amended by Chapter 36, 2003 General Session
