Idaho State Statutes - Idaho Attorney Directory

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) 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) Disciplinary conditions -- Registrants. If the administrator 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.
Provided 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 (1)
year after the date of the order on which it is based; or
(2) Under subsection (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) Disciplinary penalties -- Registrants. If the administrator finds
that the order is in the public interest and subsections (d)(1) through (6),
(8), (9), (10), (12) or (13) of this section authorizes the action, an order
under this chapter may censure, impose a bar or suspension from association
with a broker-dealer or investment adviser registered in this state, or impose
a civil penalty in an amount not to exceed five thousand dollars ($5,000) for
each violation, on a 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.
(d) Grounds for discipline. 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 ten (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 an order issued under this
chapter or the predecessor act within the previous ten (10) years;
(3) Has been convicted of any felony or within the previous ten (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 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, provided however that the administrator may not enter an
order against an applicant or registrant under this paragraph (7) 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 30-14-411(d), Idaho Code,
or refuses access to a registrant's office to conduct an audit or
inspection under section 30-14-411(d), Idaho Code;
(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 an order issued under this chapter or the predecessor act
within the previous ten (10) years;
(10) Has not paid the proper filing fee within thirty (30) days after
having been notified by the administrator of a deficiency, provided
however that the administrator shall vacate an order under this paragraph
(10) when the deficiency is corrected;
(11) After notice and opportunity for a hearing, has been found within the
previous ten (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 ten (10) years; or
(14) Is not qualified on the basis of factors such as training, experience
and knowledge of the securities business. Provided 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 (14) if the individual has successfully completed all
examinations required by subsection (e) of this section. The administrator
may require an applicant for registration under section 30-14-402 or
30-14-404, Idaho Code, who has not been registered in a state within the
two (2) years preceding the filing of an application in this state to
successfully complete an examination.
(e) Examinations. A rule adopted or an 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 fifteen (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 thirty (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) 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 chapter 52, title 67, Idaho Code.
(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) 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) Limit on investigation or proceeding. The administrator may not
institute a proceeding under subsection (a), (b) or (c) of this section based
solely on material facts actually known by the administrator unless an
investigation or the proceeding is instituted within one (1) year after the
administrator actually acquires knowledge of the material facts.

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