(a)If at any time the commission denies a license to, or revokes the license of, an individual owner of any security issued by a corporation that applies for or holds an owner license, both of the following shall apply:
(1)The commission shall immediately notify the individual and the corporation of that fact.
(2)The owner of the security shall sell the security for an amount not greater than fair market value, within 60 calendar days of the denial or revocation. Upon a showing of due diligence, the commission may extend the time for selling the security.
(b)Beginning upon the date when the commission serves notice of the denial upon the corporation, it is unlawful for the denied security owner to do any of the following:
(1)Receive any dividend, income, or interest upon any security
Free access — add to your briefcase to read the full text and ask questions with AI
(a)
If at any time the commission denies a license to, or revokes the license of, an individual owner of any security issued by a corporation that applies for or holds an owner license, both of the following shall apply:
(1)
The commission shall immediately notify the individual and the corporation of that fact.
(2)
The owner of the security shall sell the security for an amount not greater than fair market value, within 60 calendar days of the denial or revocation. Upon a showing of due diligence, the commission may extend the time for selling the security.
(b)
Beginning upon the date when the commission serves notice of the denial upon the corporation, it is unlawful for the denied security owner to do any of the following:
(1)
Receive any dividend, income, or interest upon any security described in subdivision (a), except dividends equal to the good faith estimate of the owner’s personal share of any income tax due on the ownership interest until the date of the sale, as determined in writing by an independent
certified public accountant, or as may be necessary to protect the election of the gambling enterprise to be treated as an “S corporation” under Subchapter S (commencing with Section 1361) of Chapter 1 of Subtitle A of the Internal Revenue Code.
(2)
Exercise, directly or through any trustee or nominee, any voting right conferred by any security described in subdivision (a).
(3)
Receive any remuneration in any form from the corporation for services rendered or for any other purpose.
(c)
Every security issued by a corporate owner licensee shall bear a statement, on both sides of the certificate evidencing the security, of the restrictions imposed by this section.
(d)
(1)
The commission may, at its discretion, not apply the provisions of subdivision (b) or paragraph (2) of subdivision (a) when the person who has been denied a license was denied that license solely due to the person’s failure to clearly establish eligibility and qualification for licensure as described in subdivision (a) of Section 19859.
(2)
Paragraph (1) shall not apply if additional grounds for denial of the license existed, whether or not those grounds were formally provided as the reason for the denial.