2007 Minnesota Statutes

80A.67 SECTION 412; DENIAL, REVOCATION, SUSPENSION, WITHDRAWAL,
RESTRICTION, CONDITION, OR LIMITATION OF REGISTRATION.
    (a) Disciplinary conditions-applicants. If the administrator finds that the order is in the
public interest and subsection (d) 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, or investment adviser, 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) Disciplinary conditions-registrants. If the administrator finds that the order is in the
public interest and subsection (d) 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 administrator 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 administrator or a designee of the
administrator more than one year after the date of the order on which it is based; or
    (2) under subsection (d)(5)(A) or (B), 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) would authorize the action had the conduct occurred in this state.
    (c) Disciplinary penalties-registrants. If the administrator finds that the order is in the
public interest and subsection (d)(1) through (6), (8), (9), (10), or (12) and (13) authorizes the
action, an order under this chapter may censure, impose a bar, or impose a civil penalty in an
amount up to $10,000 for each violation, on a registrant, and, if the registrant is a broker-dealer or
investment adviser, a partner, officer, director, person having a similar status or performing similar
functions, or a person directly or indirectly in control, of the broker-dealer or investment adviser.
    (d) Grounds for discipline. A person may be disciplined under subsections (a) through
(c) if the person:
    (1) has filed an application for registration in this state under this chapter or the predecessor
act within the previous ten 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 ten years;
    (3) has been convicted of a felony or within the previous ten 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 administrator 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, depository institution, insurance, or other financial services regulator of a
state or by 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 United States 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 regulator suspending or barring the person from the depository
institution 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 administrator may not
enter an order against an applicant or registrant under this paragraph without a finding of
insolvency as to the applicant or registrant;
    (8) refuses to allow or otherwise impedes the administrator from conducting an audit or
inspection under section 80A.66(d) or refuses access to a registrant's office to conduct an audit or
inspection under section 80A.66(d);
    (9) has failed to reasonably supervise 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 ten years;
    (10) has not paid the proper filing fee within 30 days after having been notified by the
administrator of a deficiency, but the administrator shall vacate an order under this paragraph
when the deficiency is corrected;
    (11) after notice and opportunity for a hearing, has been found within the previous ten 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 ten 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 paragraph if the individual has
successfully completed all examinations required by subsection (e). The administrator may
require an applicant for registration under section 80A.57 or 80A.59 who has not been registered
in a state within the two years preceding the filing of an application in this state to successfully
complete an examination.
    (e) Examinations. 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 successfully completed 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 administrator determines that the examination is not necessary or appropriate in
the public interest and for the protection of investors.
    (f) Summary process. The administrator 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 administrator 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 administrator 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 administrator,
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) Procedural requirements. An order issued may not be issued under this section, except
under subsection (f), 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 chapter 14.
    (h) Control person liability. A person that controls, directly or indirectly, a person not in
compliance with this section may be disciplined by order of the administrator under subsections
(a) through (c) to the same extent as the noncomplying person, unless the controlling person did
not know, or knowingly or recklessly disregarded evidence, of the existence of conduct that
is a ground for discipline under this section.
    (i) Limit on investigation or proceeding. The administrator may not institute a proceeding
under subsection (a), (b), or (c) based solely on material facts actually known by the administrator
unless an investigation or the proceeding is instituted within one year after the administrator
actually acquires knowledge of the material facts.
History: 2006 c 196 art 1 s 27
NOTE: This section, as added by Laws 2006, chapter 196, article 1, section 27, is effective
August 1, 2007. Laws 2006, chapter 196, article 1, section 52.