and investment adviser representative's registration.
1. The commissioner may censure, place limitations on the activities of, suspend for a
period not exceeding twelve months, or revoke the registration of any broker-dealer,
agent, investment adviser, or investment adviser representative or 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 if,
after a hearing or opportunity for hearing as provided in section 10-04-12, the
commissioner finds that such registered broker-dealer, agent, investment adviser, or
investment adviser representative:
a. Has violated or failed to comply with any provisions of this chapter or any order or
rule of the commissioner under this chapter;
b. Is, in the case of a broker-dealer or investment adviser, insolvent;
c. Has engaged in dishonest, fraudulent, or unethical practices in the securities
business;
d. Conducts business in purchasing or selling securities at such variations from
current market prices as, in light of all the circumstances, are unconscionable or
unfair to the purchasing public, or if such variance, including commissions on
sales, unreasonably exceeds the price quoted by a recognized national quotation
list as prescribed by the commissioner;
e. Has failed to file with the department any financial record required pursuant to
section 10-04-10.3, or has refused to permit or has otherwise impeded an
examination into the person's affairs as provided by section 10-04-10.3 and
subsection 3;
f. 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;
g. Has been convicted of an offense determined by the commissioner to have a
direct bearing upon a person's ability to serve the public as a broker-dealer,
agent, investment adviser, or investment adviser representative, or the
commissioner finds that a person, following conviction of any offense, is not
sufficiently rehabilitated under section 12.1-33-02.1;
h. Is permanently or temporarily enjoined by any court of competent jurisdiction from
engaging in or continuing any conduct or practice involving any aspect of the
securities business;
i. Is the subject of an order of the commissioner denying, suspending, or revoking
registration as a broker-dealer, agent, investment adviser, or investment adviser
representative;
j. Is the subject of an order entered by the securities administrator of any other
state or by the securities and exchange commission denying or revoking
registration as a broker-dealer, agent, investment adviser, or investment adviser
representative, or the substantial equivalent of those terms as defined in this
chapter, or is the subject of an order suspending or expelling membership in or
association with a member of a self-regulatory organization registered under the
Securities Exchange Act of 1934, the Commodity Exchange Act, or the
Investment Advisers Act of 1940; or is the subject of a United States post-office
fraud order;
k. Has, in connection with the offer, sale, or purchase of any security, directly or
indirectly, effected a series of transactions creating actual or apparent active
trading in any security, or to raise or depress the price of a security, for the
purpose of inducing the purchase or sale of the security;
l. Is not qualified on the basis of such factors as training, experience, and
knowledge of the securities business;
m. Has failed reasonably to supervise the person's agents if the person is a
broker-dealer or the person's employees or investment adviser representatives if
the person is an investment adviser; or
n. Is the subject of an order entered by the insurance administrator of any state
denying or revoking registration as an insurance producer, consultant, or the
substantial equivalent of those terms as defined in section 26.1-26-02.
It is a violation for any person to engage in any conduct described in subdivisions a, c,
d, e, f, and k and any administrative rules promulgated under any of those
subdivisions, if the activities occurred in this state, or with respect to a resident of this
state, or has caused or could have caused harm to investors in this state.
2. It is sufficient cause for revocation of registration of a broker-dealer or investment
adviser as provided in this section, in case of a partnership, corporation, limited liability
company, or any unincorporated association, if any member of a partnership or any
officer or director of the corporation or association or any manager or governor of a
limited liability company has been guilty of any act or omission which would be
sufficient grounds for revoking the registration of an individual broker-dealer or
investment adviser.
3. If the commissioner has reasonable grounds to believe that the registration of any
registered broker-dealer, agent, investment adviser, or investment adviser
representative should be censured, suspended, or revoked upon any grounds
specified in this section, the commissioner or the commissioner's agent may conduct
an examination into the affairs of any such registered broker-dealer, agent, investment
adviser, or investment adviser representative. 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 a registered broker-dealer, agent, investment
adviser, or investment adviser representative, and may administer oaths to and
examine the officers and employees of such broker-dealer or investment adviser as to
the broker-dealer's or investment adviser's business and affairs.
4. If the commissioner makes written findings of fact to support the conclusion that
grounds exist pursuant to subsection 1 for the commissioner to suspend or revoke any
registration, the commissioner may by order summarily suspend registration pending
final determination of any proceeding under this section. Upon the entry of the
summary order, the commissioner shall promptly notify the applicant, as well as the
employer or prospective employer if the applicant is an agent or investment adviser
representative, that it has been entered and the reasons. The person subject to the
order, if desiring a hearing, must make a written request for a hearing to the
commissioner within fifteen days after receipt of the notice. Within fifteen days after
receipt by the commissioner of a written request, the matter will be set for hearing to
determine if the order should be modified, vacated, or extended pending a final
determination. If a hearing is not requested and none is ordered by the commissioner,
the order will remain in effect until modified or vacated by the commissioner.
5. If the commissioner finds, after affording a registered broker-dealer, a registered agent,
a registered investment adviser, or a registered investment adviser representative a
hearing or opportunity for hearing as provided in section 10-04-12, that there are
grounds to censure, suspend, or revoke the registration of such broker-dealer, agent,
investment adviser, or investment adviser representative, the commissioner may enter
an order in the register of broker-dealers, agents, investment advisers, and investment
adviser representatives censuring, suspending, or revoking the registration of such
broker-dealer, agent, investment adviser, or investment adviser representative. Such
order shall state specifically the grounds for its issuance. A copy of such order shall be
sent by registered mail to the broker-dealer, agent, investment adviser, or investment
adviser representative whose registration is censured, suspended, or revoked thereby
at the person's business address and, if the censure, suspension, or revocation is of
the registration of an agent or investment adviser representative, to the registered
broker-dealer or registered investment adviser who employs such person. Suspension
or revocation of the registration of a broker-dealer shall also suspend or revoke the
registration of all of the broker-dealer's agents. Suspension or revocation of the
registration of an investment adviser also suspends or revokes the registration of all of
the investment adviser's investment adviser representatives. Suspension or revocation
of the registration of an agent or investment adviser representative solely because of
employment by a broker-dealer or investment adviser whose registration was
suspended or revoked shall not prejudice subsequent applications for registration by
such person.
6. No action may be brought under this section by the commissioner after ten years from
the date of the alleged violation.