§ 36b-15 — (Formerly Sec. 36-484). Denial, suspension or revocation of registration by commissioner. Withdrawal from registration or of application.

Connecticut § 36b-15

• Jurisdiction: Connecticut
• Title 36b: Connecticut Securities Law and Business Opportunity Investment Act
• Ch. 672a: Uniform Securities Act

Text

(a) The commissioner may, by order, deny, suspend or revoke any registration or, by order, restrict or impose conditions on the securities or investment advisory activities that an applicant or registrant may perform in this state if the commissioner finds that (1) the order is in the public interest, and (2) the applicant or registrant or, in the case of a broker-dealer or investment adviser, any partner, officer, or director, 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 registration which 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 which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact; (B) has wilfully violated or wilfully failed to comply with any provision of sections 36b-2 to 36b-34, inclusive, or a predecessor statute or any regulation or order under said sections or a predecessor statute; (C) has been convicted, within the past ten years, of any misdemeanor involving a security, any aspect of a business involving securities, commodities, investments, franchises, business opportunities, insurance, banking or finance, or any felony, provided any denial, suspension or revocation of such registration shall be in accordance with the provisions of section 46a-80; (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 a business involving securities, commodities, investments, franchises, business opportunities, insurance, banking or finance; (E) is the subject of a cease and desist order of the commissioner or an order of the commissioner denying, suspending, or revoking registration as a broker-dealer, agent, investment adviser or investment adviser agent; (F) is the subject of any of the following sanctions that are currently effective or were imposed within the past ten years: (i) An order issued by the securities administrator of any other state or by the Securities and Exchange Commission or the Commodity Futures Trading Commission denying, suspending or revoking registration as a broker-dealer, agent, investment adviser, investment adviser agent or a person required to be registered under the Commodity Exchange Act, 7 USC 1 et seq., as from time to time amended, and the rules and regulations thereunder, or the substantial equivalent of those terms, as defined in sections 36b-2 to 36b-34, inclusive, (ii) an order of the Securities and Exchange Commission or Commodity Futures Trading Commission suspending or expelling such applicant, registrant or person from a national securities or commodities exchange or national securities or commodities association registered under the Securities Exchange Act of 1934 or the Commodity Exchange Act, 7 USC 1 et seq., as from time to time amended, or, in the case of an individual, an order of the Securities and Exchange Commission or an equivalent order of the Commodity Futures Trading Commission barring such individual from association with a broker-dealer or an investment adviser, (iii) a suspension, expulsion or other sanction issued by a national securities exchange or other self-regulatory organization registered under federal laws administered by the Securities and Exchange Commission or the Commodity Futures Trading Commission if the effect of the sanction has not been stayed or overturned by appeal or otherwise, (iv) a United States Post Office fraud order, (v) a denial, suspension, revocation or other sanction issued by the commissioner or any other state or federal financial services regulator based upon nonsecurities violations of any state or federal law under which a business involving investments, franchises, business opportunities, insurance, banking or finance is regulated, or (vi) a cease and desist order entered by the Securities and Exchange Commission, a self-regulatory organization or the securities agency or administrator of any other state or Canadian province or territory; but the commissioner may not (I) institute a revocation or suspension proceeding under this subparagraph more than five years from the date of the sanction relied on, and (II) enter an order under this subparagraph on the basis of an order under any other state act unless that order was based on facts which would constitute a ground for an order under this section; (G) may be denied registration under federal law as a broker-dealer, agent, investment adviser, investment adviser agent or as a person required to be registered under the Commodity Exchange Act, 7 USC 1 et seq., as from time to time amended, and the rules and regulations promulgated thereunder, or the substantial equivalent of those terms as defined in sections 36b-2 to 36b-34, inclusive; (H) has engaged in fraudulent, dishonest or unethical practices in the securities, commodities, investment, franchise, business opportunity, banking, finance or insurance business, including abusive sales practices in the business dealings of such applicant, registrant or person with current or prospective customers or clients; (I) is insolvent, either in the sense that the liabilities of such applicant, registrant or person exceed the assets of such applicant, registrant or person, or in the sense that such applicant, registrant or person cannot meet the obligations of such applicant, registrant or person as they mature; but the commissioner 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 not qualified on the basis of such factors as training, experience, and knowledge of the securities business, except as otherwise provided in subsection (b) of this section; (K) has failed reasonably to supervise: (i) The agents or investment adviser agents of such applicant or registrant, if the applicant or registrant is a broker-dealer or investment adviser; or (ii) the agents of a broker-dealer or investment adviser agents of an investment adviser, if such applicant, registrant or other person is or was an agent, investment adviser agent or other person charged with exercising supervisory authority on behalf of a broker-dealer or investment adviser; (L) in connection with any investigation conducted pursuant to section 36b-26 or any examination under subsection (d) of section 36b-14, has made any material misrepresentation to the commissioner or upon request made by the commissioner, has withheld or concealed material information from, or refused to furnish material information to the commissioner, provided, there shall be a rebuttable presumption that any records, including, but not limited to, written, visual, audio, magnetic or electronic records, computer printouts and software, and any other documents, that are withheld or concealed from the commissioner in connection with any such investigation or examination are material, unless such presumption is rebutted by substantial evidence; (M) has wilfully aided, abetted, counseled, commanded, induced or procured a violation of any provision of sections 36b-2 to 36b-34, inclusive, or a predecessor statute or any regulation or order under such sections or a predecessor statute; (N) after notice and opportunity for a hearing, has been found within the previous ten years: (i) By a court of competent jurisdiction, to have wilfully violated the laws of a foreign jurisdiction under which the business of securities, commodities, investments, franchises, business opportunities, insurance, banking or finance is regulated; (ii) 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 agent or similar person; or (iii) 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. As used in this subparagraph, “foreign” means a jurisdiction outside of the United States; or (O) has failed to pay the proper filing fee; but the commissioner may enter only a denial order under this subparagraph, and the commissioner shall vacate any such order when the deficiency has been corrected. The commissioner may not institute a suspension or revocation proceeding on the basis of a fact or transaction known to the commissioner when the registration became effective unless the proceeding is instituted within one hundred eighty days of the effective date of such registration. (b) The following provisions govern the application of subparagraph (J) of subdivision (2) of subsection (a) of this section: (1) The commissioner may not enter an order against a broker-dealer on the basis of the lack of qualification of any person other than (A) the broker-dealer if the broker-dealer is an individual, or (B) an agent of the broker-dealer; (2) the commissioner may not enter an order against an investment adviser on the basis of the lack of qualification of any person other than (A) the investment adviser if the investment adviser is an individual, or (B) any other person who represents the investment adviser in doing any of the acts which make the investment adviser an investment adviser; (3) the commissioner may not enter an order solely on the basis of lack of experience if the applicant or registrant is qualified by training or knowledge or both; (4) the commissioner shall consider that an agent who will work under the supervision of a registered broker-dealer need not have the same qualifications as a broker-dealer; (5) the commissioner shall consider that an investment adviser is not necessarily qualified solely on the basis of experience as a broker-dealer or agent. When the commissioner finds that an applicant for initial or renewal registration as a broker-dealer is not qualified as an investment adviser, the commissioner may by order condition the applicant's registration as a broker-dealer upon the applicant's not transacting business in this state as an investment adviser; (6) the commissioner may by regulation provide for an examination, which may be written or oral or both, to be taken by any class of or all applicants, as well as persons who represent or will represent an investment adviser in doing any of the acts which make the investment adviser an investment adviser. (c) The commissioner may by order summarily postpone or suspend registration or require a registrant to take or refrain from taking such action that in the opinion of the commissioner will effectuate the purposes of sections 36b-2 to 36b-34 , inclusive, pending final determination of any proceeding under this section. Upon the entry of the order, the commissioner shall promptly notify the applicant or registrant, as well as the employer or prospective employer if the applicant or registrant is an agent or an investment adviser agent, that it has been entered and of the reasons therefor and that within fifteen days after the receipt of a written request the matter will be set down for hearing. If no hearing is requested and none is ordered by the commissioner, the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of and opportunity for hearing, may modify or vacate the order or extend it until final determination. (d) If the commissioner finds that any registrant or applicant for registration is no longer in existence or has ceased to do business as a broker-dealer, agent, investment adviser or investment adviser agent, 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 commissioner may by order cancel the registration or application. (e) (1) Withdrawal from registration as a broker-dealer, agent, investment adviser or investment adviser agent, or withdrawal of an application for registration as a broker-dealer, agent, investment adviser or investment adviser agent, becomes effective ninety days after receipt of an application to withdraw such registration or a notice of intent to withdraw such application for registration or within such shorter period of time as the commissioner may determine, unless a denial, revocation or suspension proceeding is pending when the application or notice is filed or a proceeding to deny, revoke, suspend or impose conditions upon the withdrawal is instituted within ninety days after the application or notice is filed. If a proceeding is pending or instituted, withdrawal becomes effective at such time and upon such conditions as the commissioner by order determines. If no proceeding is pending or instituted and withdrawal automatically becomes effective, the commissioner may nevertheless institute a denial, revocation or suspension proceeding under subsection (a) of this section within one year after withdrawal became effective. (2) If the registration of a broker-dealer, agent, investment adviser or investment adviser agent expires due to the registrant's failure to renew, within one year of such expiration, the commissioner may nevertheless institute a revocation or suspension proceeding or issue an order suspending or revoking the registration under subsection (a) of this section. (f) No order may be entered under this section except as provided in subsection (c) of this section without (1) appropriate prior notice to the applicant or registrant and to the employer or prospective employer if such applicant or registrant is an agent or investment adviser agent, (2) opportunity for hearing, and (3) written findings of fact and conclusions of law. (g) Notwithstanding the provisions of subsection (a) of this section, the commissioner may deny an application for registration as a broker-dealer, agent, investment adviser, investment adviser agent or branch office if the applicant fails to respond to any request for information required under sections 36b-2 to 36b-34 , inclusive, or the regulations adopted pursuant to said sections. The commissioner shall notify the applicant in writing that if such information is not submitted within sixty days the application shall be deemed abandoned and denied. An application filing fee paid prior to the date an application is denied pursuant to this subsection shall not be refunded. Denial of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for registration under said sections. The hearing requirement provided for in subsection (f) of this section shall not apply to the denial of an application issued pursuant to this subsection.

Legislative History

(P.A. 77-482, S. 15; P.A. 80-88, S. 5, 12; P.A. 82-149, S. 6, 16; P.A. 87-375, S. 4; P.A. 88-208, S. 2; P.A. 89-220, S. 3, 4; P.A. 91-145, S. 4, 5; P.A. 94-178, S. 1; P.A. 96-192, S. 4; P.A. 99-38, S. 2; P.A. 01-48, S. 3; P.A. 03-19, S. 87; 03-259, S. 20; P.A. 04-45, S. 4; P.A. 05-177, S. 5; P.A. 07-91, S. 25; P.A. 09-160, S. 10; P.A. 10-141, S. 10.) History: P.A. 80-88 added references to commodities, commodity futures trading commission and Commodity Exchange Act where appearing in Subsec. (a), inserted new Subdiv. (G) and relettered former Subdivs. (G) to (K) accordingly; P.A. 82-149 made a technical correction to Subsec. (b); P.A. 87-375 amended Subsec. (a)(2)(E) by adding the reference to a cease and desist order of the commissioner and added new Subsec. (g) re abandoned applications; P.A. 88-208 amended Subsec. (a)(2)(F) by clarifying that in order for the commissioner to take any action, the sanctions must be currently effective and been imposed within the past five years, added subparagraph designations throughout Subsec. (a), amended Subsec. (a)(2)(F)(ii) re orders barring an individual from associations with a broker-dealer or an investment advisor, added Subsec. (a)(2)(F)(iii) re sanctions issued by certain self-regulatory organizations, and amended Subsec. (a)(2)(L) by extending the time period in which the commissioner may bring a suspension or revocation proceeding from 30 to 180 days; P.A. 89-220 added new Subsec. (a)(L) re withholding or concealing information from the commissioner and relettered the remaining subparagraph accordingly and amended Subsec. (e) by changing the date a withdrawal from registration becomes effective from 30 to 90 days after receipt of the application and made other technical changes; P.A. 91-145 amended Subsec. (a) to authorize the commissioner to deny, suspend or revoke registration upon a finding that sanctions have been imposed on the applicant or registrant by the securities administrator of a Canadian province or territory, added Subpara. (F)(v) re cease and desist orders entered by the Securities and Exchange Commission or the securities agency or administrator of another state or Canadian province or territory to Subsec. (a)(23), and amended Subsec. (a)(2)(K) by adding agents charged with exercising supervisory authority on behalf of broker-dealers and amended Subsec. (g) to authorize the commissioner to deny applications for registration as a branch office for failure to respond to requests for information; P.A. 94-178 authorized commissioner to “by order restrict or impose conditions on the securities or investment advisory activities that an applicant or registrant may perform in this state” in Subsec. (a); Sec. 36-484 transferred to Sec. 36b-15 in 1995; P.A. 96-192 added Subsec. (e)(2) re commissioner's power to suspend or revoke expired registrations; P.A. 99-38 amended Subsec. (a)(2)(L) by adding provisions re rebuttable presumption; P.A. 01-48 amended Subsec. (e)(1) by adding provisions re notice of intent to withdraw and withdrawal of an application for registration and denial of such withdrawal; P.A. 03-19 made a technical change in Subsec. (e)(1), effective May 12, 2003; P.A. 03-259 amended Subsec. (a)(2)(F) by substituting “ten years” for “five years” and Subsec. (a)(2)(H) by inserting “fraudulent” and “, including abusive sales practices in the business dealings of such applicant, registrant or person with current or prospective customers or clients” in and made technical changes; P.A. 04-45 amended Subsec. (a)(2)(G) to make a technical change, amended Subsec. (a)(2)(K) to divide Subpara. into clauses (i) and (ii), in (i) making technical and organizational changes and in (ii) specifying failure reasonably to supervise agents of broker-dealer or investment adviser agents of investment adviser, if applicant, registrant or other person is or was an agent, investment adviser agent or other person charged with exercising supervisory authority on behalf of broker-dealer or investment adviser, and amended Subsec. (b) to make technical changes; P.A. 05-177 amended Subsec. (a)(2)(F)(v) to allow commissioner to deny, suspend or revoke any registration based on a cease and desist order entered by a self-regulatory organization, amended Subsec. (a)(2) to add new Subpara. (M) allowing commissioner to deny, suspend or revoke any registration for the wilful aiding, abetting, counseling, commanding, inducing or procuring a violation of any provision of the Act or a predecessor statute or any regulation or order under the Act or such statute, and to redesignate existing Subpara. (M) as Subpara. (N), and made technical changes throughout Subsec. (a); P.A. 07-91 amended Subsec. (c) to allow commissioner, by order, to require registrant to take or refrain from taking action that will effectuate purposes of Secs. 36b-2 to 36b-33 pending final determination of proceeding under section, effective June 5, 2007; P.A. 09-160 amended Subsec. (a) by replacing references to securities or commodities business with references to business involving securities, commodities, investments, franchises, business opportunities, insurance, banking or finance in Subparas. (C), (D) and (H), removing reference to order issued by Canadian province or territory in Subpara. (F)(i), adding new Subpara. (F)(v) re nonsecurities violations, redesignating existing Subpara. (F)(v) as Subpara. (F)(vi), adding new Subpara. (N) re foreign jurisdiction, and redesignating existing Subpara. (N) as Subpara. (O); P.A. 10-141 amended Subsecs. (a), (c) and (g) by replacing references to Sec. 36b-33 with references to Sec. 36b-34, effective June 7, 2010. Annotation to former section 36-484: Cited. 215 C. 277.