§ 23-2-2.5-14 — Stop orders; descriptions of charges

Indiana § 23-2-2.5-14

• Jurisdiction: Indiana
• Title 23: BUSINESS AND OTHER ASSOCIATIONS
• Art. 2: SECURITIES AND FRANCHISES
• Ch. 2.5: Franchises

Text

(a) The commissioner may, without a
hearing, issue a stop order denying the effectiveness of or suspending
or revoking the effectiveness of a registration if the commissioner finds
that the issuance of the order is in the public interest and also finds
that:
(1) there has been a failure to comply with this chapter or the
rules or orders of the commissioner pertaining to this chapter;
(2) the offer or sale of the franchise would constitute
misrepresentation to, or deceit or fraud on, the purchasers or
offerees;
(3) the franchisor has failed to comply with any rule promulgated
or order issued pursuant to section 12 of this chapter; or
(4) the franchisor, or the franchisor's predecessor, or any of the
franchisor's directors, trustees, general partners, chief executives,
financial officers, accounting officers, franchise sales officers, or
other principal officers, or, if the franchisor is a limited liability
company, any member or manager of the franchisor:
(A) during the ten (10) year period immediately preceding the
date of registration, has:
(i) been convicted of a felony;
(ii) pleaded nolo contendere to a felony charge; or
(iii) been held liable in a civil action by final judgment;
if the felony or civil action involved fraud, embezzlement,
misappropriation of property, or the violation of any state or
federal statute involving the offer or sale of securities or
franchises;
(B) is subject to any currently effective order affecting the
franchise resulting from a proceeding or pending action brought
by any individual or public agency or department;
(C) is a defendant in any pending criminal or material civil
proceeding;
(D) during the ten (10) year period immediately preceding the
date of registration, has been the defendant against whom a
final judgment was entered in any material civil action; or
(E) is the franchisor or a principal executive officer or general
partner of the franchisor and has, during the ten (10) year
period immediately preceding the date of registration,
reorganized due to insolvency or been adjudicated as a
bankrupt.
(b) An order issued under this section based on a finding by the
commissioner under subsection (a)(4)(A) must include a description of
the charge, violation, or judgment referred to in subsection (a)(4)(A).
An order issued under this section based on a finding by the
commissioner under subsection (a)(4)(B) must include a copy of the
order referred to in subsection (a)(4)(B). An order issued under this
section based on a finding by the commissioner under subsection
(a)(4)(D) must include a description of the judgment referred to in
subsection (a)(4)(D). An order issued under this section based on a
finding by the commissioner under subsection (a)(4)(E) must include
a description of the insolvency or adjudication referred to in subsection
(a)(4)(E).
(c) Before issuing a stop order under subsection (a)(4), such an
order must be based on a finding by the commissioner that involvement
of a person referred to in subsection (a)(4) creates an unreasonable risk
to prospective franchisees.
Formerly: Acts 1975, P.L.262, SEC.1. As amended by
P.L.168-2001, SEC.6; P.L.30-2002, SEC.1; P.L.1-2003,
SEC.73.