292.337 Grounds for denial, suspension, limitation, or revocation of registration
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/ky/292-337A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
and for disciplinary action -- Summary order -- Emergency hearing -- Order
in accordance with KRS Chapter 13B.
(1)The commissioner may deny, refuse to renew, suspend, or revoke the registration of
any broker-dealer, agent, investment adviser, or investment adviser representative.
The commissioner may bar, censure, or place on probation any registrant or any
officer, director, partner, or person occupying a similar status or performing similar
functions for a registrant, or restrict, condition, or limit a registrant as to any
function or activity of the business for which registration is required in this state.
The commissioner may take any of the foregoing actions for any reason set forth in
subsection
(2)of this section.
(2)For actions taken in subsection
(1)of this section, the commissioner shall find that
it is in the public interest and further find that 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 under this chapter 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 the light of the circumstances under which it was
made, false or misleading with respect to any material fact;
(b)Has violated or failed to comply with this chapter or any administrative
regulation promulgated or order issued under this chapter or a predecessor
law;
(c)Has been convicted of, or has pending against him or her, a felony;
(d)Has been convicted within the past ten
(10)years of, or has pending against
him or her, any misdemeanor involving a security or any aspect of the
securities business;
(e)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;
(f)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;
(g)Is the subject of any of the following orders that are currently effective and
were issued within the last five
(5)years:
1. An order by any securities administrator, entered after notice and
opportunity for hearing, denying, suspending, limiting, or revoking the
person's license as a broker-dealer, agent, investment adviser, or
investment adviser representative or the substantial equivalent of those
terms;
2. An order of a self-regulatory organization finding a violation of federal
law or a rule of the self-regulatory organization;
3. A United States Postal Service fraud order;
4. A cease and desist or other administrative order entered after notice and
opportunity for hearing by the commissioner, or any other securities
administrator or the United States Commodity Futures Trading
Commission; or
5. An order by the United States Commodity Futures Trading Commission
denying, suspending, or revoking registration under the Commodity
Exchange Act, 7 U.S.C. secs. 1 et seq.;
(h)Has engaged in dishonest or unethical practices in the securities, commodities,
investment, franchise, banking, finance, or insurance business within the
previous ten
(10)years;
(i)Is insolvent;
(j)Is not qualified on the basis of such factors as training, experience, or
knowledge of the securities business. However, an order against an individual
shall not be based on this paragraph if the individual has passed all
examinations required as a condition of registration;
(k)Has reasonably failed to 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, within the previous ten
(10)years, committed a violation of this chapter or administrative regulation
promulgated or order issued under this chapter;
(l)Has failed to pay a fee required under this chapter within thirty
(30)days after
having received written notice from the commissioner of the failure to pay the
required fee. The commissioner shall vacate an order issued under this
subsection if the fee is paid within thirty
(30)days of the date of the order;
(m)Has violated the law of any jurisdiction governing or regulating any aspect of
the business of securities or banking, or, within the past five
(5)years, has
been the subject of an action of any securities regulator denying, revoking, or
suspending the right to engage in the business of securities as a broker-dealer,
agent, investment adviser, or investment adviser representative or is the
subject of an action of any securities exchange or self-regulatory organization
operating under the authority of a securities regulator suspending or expelling
the person from membership in the exchange or self-regulatory organization;
or
(n)Refuses to allow or otherwise impedes an examination under this chapter or
refuses access to a registrant's office to conduct an examination.
(3)The commissioner may not institute a proceeding under this section based solely on
a fact or transaction known to him or her when a registration became effective,
unless the proceeding is instituted within sixty
(60)days after the effective date of
the registration.
(4)The commissioner may by order summarily restrict, condition, limit, or suspend a
registration, or censure or bar a registrant before final determination of an
administrative proceeding under this section. A summary order issued under this
subsection shall only be based upon a finding by the commissioner that such action
is in the public interest and that there is substantial evidence of a violation of law
that constitutes an immediate danger to the public health, safety, or welfare. One
or more of the grounds listed in subsection
(2)of this section shall be considered for
a summary order. Any person aggrieved by an order of the commissioner under this
section may file with the office an application for an emergency hearing pursuant to
KRS 13B.125 within thirty
(30)days of the date of the order. The commissioner
shall comply with KRS 13B.125 when entering a summary order. The
commissioner may modify, stay, extend, or vacate the summary order issued under
this subsection.
(5)The commissioner shall not issue an order under this section, except under
subsection
(4)of this section, without appropriate notice to the applicant or
registrant, opportunity for a hearing, and written findings of fact and conclusions of
law in accordance with KRS Chapter 13B.