§ 10-04-09 — Suspension or revocation of registration of securities

The commissioner may revoke the registration of any securities registered under this
chapter if, after a hearing or opportunity for hearing as provided in section 10-04-12, the
commissioner finds that any provisions of this chapter or any rule, order, or condition lawfully
imposed under this chapter has been violated, or if the commissioner finds any of the following:
1. The sale of such securities would work or tend to work a fraud, or deception upon the
purchasers thereof or the public, or that the disposal of the securities is on unfair
terms, or if the plan of business of the applicant appears to be unfair, unjust, or
inequitable.
2. The issuer of such securities is insolvent, or has violated any of the provisions of this
chapter or any order of the commissioner of which such issuer has notice, or does not
conduct its business in accord with law.
3. The issuer of such securities has made any fraudulent representations in any
prospectus or in any circular or other literature that has been distributed concerning
the issuer or its securities.
4. The issuer of such securities has refused to permit an examination into its affairs as
provided in this section or has failed to furnish the commissioner any further
information required pursuant to this section.
5. No action may be brought under this section by the commissioner after ten years from
the date of the alleged violation.
If the commissioner has reasonable grounds to believe that the registration of any securities
registered under this chapter should be revoked upon any ground specified in this section, the
commissioner or the commissioner's agent may conduct an examination into the affairs of the
issuer of such securities; provided, that the commissioner or the commissioner's agent may
conduct such an examination only if the information sought by such examination could not be
obtained from other readily available sources. In making any such examination, the
commissioner or the commissioner's agent shall have access to and may compel the production
of all the books and papers of an issuer and may administer oaths to and examine the officers
and any employees of such issuer as to its business and affairs. They may also require a
balance sheet exhibiting the assets and liabilities of any such issuer or the issuer's income
statement, or both, to be certified to by a certified public accountant. Whenever the
commissioner may deem it necessary in connection with any such examination, the
commissioner may also require such balance sheet or income statement, or both, to be made
more specific in such particulars as the commissioner shall point out or to be brought down to

the latest practicable date. Such examination shall be made at the office of the commissioner,
unless the issuer or a registered dealer requests that the examination be made at some other
place, in which case the person making such request may be required by the commissioner to
advance sufficient funds to pay the actual expenses of such investigation.
If the commissioner has reasonable grounds to believe that the registration of any securities
under this chapter should be revoked on any ground specified in this section, the commissioner
may enter an order suspending the registration of such securities pending an examination into
the affairs of the issuer of such securities or pending a hearing or opportunity for hearing as
provided in section 10-04-12; provided, that no such suspension order shall be effective for
more than thirty days and such an order, if not withdrawn by the commissioner within thirty days,
shall automatically terminate thirty days after the date of its issuance. Such suspension order
shall state specifically the grounds for its issuance. Upon the entry of an order suspending the
registration of any securities or of an order withdrawing a suspension order previously issued,
the commissioner shall send a copy of such order to the issuer of such securities.
If the commissioner finds, after a hearing or opportunity for hearing as provided in section
10-04-12, that there are grounds for revoking the registration of certain securities, the
commissioner may enter in the register of securities an order revoking the registration of such
securities. Such order shall state specifically the grounds for its issuance. Upon the entry of an
order revoking the registration of securities, the commissioner shall send a copy of such order to
the issuer of such securities. No order revoking the registration of securities shall invalidate any
sale of such securities made prior to the entry of such order.