(a) If the commissioner finds that the order
is in the public interest and subsection (d) authorizes the action, an
order issued under this article 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) If the commissioner finds that the order is in the public interest
and subsection (d) authorizes the action, an order issued under this
article 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
commissioner 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 commissioner or a designee of the
commissioner more than one (1) year after the date of the order on
which it is based; or
(2) under subsection (d)(5)(A) and (d)(5)(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) If the commissioner finds that the order is in the public interest
and subsection (d)(1), (d)(2), (d)(3), (d)(4), (d)(5), (d)(6), (d)(8), (d)(9),
(d)(11), (d)(12), or (d)(13) authorizes the action, an order under this
article may censure, impose a bar, or impose a civil penalty in an
amount not to exceed a maximum of ten thousand dollars ($10,000) per
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) 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
article 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) knowingly violated or knowingly failed to comply with this
article or the predecessor act or a rule adopted or order issued
under this article or the predecessor act within the previous ten
(10) years;
(3) has been convicted of a 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 with jurisdiction in an
action instituted by the commissioner under this article 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;
(F) a depository institution regulator suspending or barring the
person from the depository institution business; or
(G) any state regulatory body or organization governing real
estate brokers or sales persons denying, suspending, or
revoking a person's registration or license in the real estate
industry;
(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 commissioner may not enter an
order against an applicant or registrant under this subdivision
without a finding of insolvency as to the applicant or registrant;
(8) refuses to allow or otherwise impedes the commissioner from
conducting an audit or inspection under section 11(d) of this
chapter or refuses access to a registrant's office to conduct an
audit or inspection under section 11(d) of this chapter;
(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 article or
the predecessor act or a rule adopted or order issued under this
article 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 commissioner of a deficiency, but the
commissioner shall vacate an order under this subdivision 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 with 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;
(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 subdivision if the individual has
successfully completed all examinations required by subsection
(e). The commissioner may require an applicant for registration
under section 2 or 4 of this chapter 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;
(15) is on the most recent tax warrant list supplied to the
commissioner by the department of state revenue;
(16) is an individual who is:
(A) an applicant for registration as an agent for a broker-dealer
or as an investment adviser representative; or
(B) registered as an agent for a broker-dealer or as an
investment adviser representative;
and has failed to comply with a court order imposing a child
support obligation; or
(17) fails to comply with the disclosure requirements set forth
under IC 24-4.9-3.
(e) A rule adopted or order issued under this article 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
article may waive, in whole or in part, an examination as to an
individual and a rule adopted under this article may waive, in whole or
in part, an examination as to a class of individuals if the commissioner
determines that the examination is not necessary or appropriate in the
public interest and for the protection of investors.
(f) The commissioner 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 commissioner 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 commissioner
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 commissioner, 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) An order 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.
(h) A person that controls, directly or indirectly, a person not in
compliance with this section may be disciplined by order of the
commissioner under subsections (a) through (c) 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) The commissioner may not institute a proceeding under
subsection (a), (b), or (c) based solely on material facts actually known
by the commissioner unless an investigation or the proceeding is
instituted within one (1) year after the commissioner actually acquires
knowledge of the material facts.
(j) All fines and penalties collected under this section shall be
deposited into the securities division enforcement account as
established by IC 23-19-6-1(f).