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H0022........................................................by MR. SPEAKER
Requested by: Department of Finance
INVESTMENT ADVISORS - Amends existing law relating to the Idaho Securities
Act to provide that the director of the Department of Finance may deny,
suspend or revoke the registration of broker-dealers or investment advisors
based upon the actions of control persons; and to provide that orders of
the National Association of Securities Dealers or the National Association
of Securities Dealers Regulation, Inc., which deny, suspend or revoke
registrations may constitute a basis for denial, suspension or revocation
of registration by the director of the Department of Finance.
01/08 House intro - 1st rdg - to printing
Rpt prt - to Bus
03/02 Rpt out - rec d/p - to 2nd rdg
03/05 2nd rdg - to 3rd rdg
03/06 3rd rdg - PASSED - 59-0-11
AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Boe, Bolz,
Bradford, Campbell, Chase, Clark, Collins, Crow, Denney, Ellis,
Eskridge, Field(13), Gagner, Gould, Hadley, Hammond, Henbest,
Higgins, Hornbeck, Jaquet, Jones, Kellogg, Kendell, Kunz, Lake,
Loertscher, Mader, Marley, McKague, Meyer, Montgomery, Mortensen,
Moss, Moyle, Pearce, Pomeroy, Ridinger, Roberts, Robison, Sali,
Schaefer, Sellman, Smith, Smylie, Stevenson, Stone, Swan, Tilman,
Trail, Wheeler, Wood, Young, Mr. Speaker
NAYS -- None
Absent and excused -- Bruneel, Callister, Cuddy, Deal, Ellsworth,
Field(20), Harwood, Langford, Pischner, Raybould, Shepherd
Floor Sponsor -- Higgins
Title apvd - to Senate
03/07 Senate intro - 1st rdg - to Com/HuRes
03/14 Rpt out - rec d/p - to 2nd rdg
03/15 2nd rdg - to 3rd rdg
03/16 3rd rdg - PASSED - 34-0-1
AYES -- Andreason, Branch(Bartlett), Boatright, Brandt, Bunderson,
Burtenshaw, Cameron, Danielson, Darrington, Davis, Deide, Dunklin,
Frasure, Geddes, Goedde, Hawkins, Ingram, Ipsen, Keough,
King-Barrutia, Lee, Lodge, Noh, Richardson, Risch, Sandy, Schroeder,
Sims, Sorensen, Stegner, Stennett, Thorne, Wheeler, Whitworth
NAYS -- None
Absent and excused -- Williams
Floor Sponsor -- Stegner
Title apvd - to House
03/19 To enrol
03/20 Rpt enrol - Sp signed
03/21 Pres signed - to Governor
03/22 Governor signed
Session Law Chapter 84
Effective: 07/01/01
|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-sixth Legislature First Regular Session - 2001IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 22 BY MR. SPEAKER Requested by: Department of Finance 1 AN ACT 2 RELATING TO THE IDAHO SECURITIES ACT; AMENDING SECTION 30-1413, IDAHO CODE, TO 3 PROVIDE THAT THE DIRECTOR MAY DENY, SUSPEND OR REVOKE REGISTRATIONS OF 4 BROKER-DEALERS OR INVESTMENT ADVISERS BASED ON THE ACTIONS OF CONTROL PER- 5 SONS, TO PROVIDE THAT ORDERS OF THE NATIONAL ASSOCIATION OF SECURITIES 6 DEALERS OR THE NATIONAL ASSOCIATION OF SECURITIES DEALERS REGULATION, 7 INC., DENYING, SUSPENDING OR REVOKING REGISTRATIONS MAY ACT AS A BASIS FOR 8 DENIAL, SUSPENSION OR REVOCATION OF REGISTRATION BY THE DIRECTOR AND TO 9 MAKE TECHNICAL CORRECTIONS. 10 Be It Enacted by the Legislature of the State of Idaho: 11 SECTION 1. That Section 30-1413, Idaho Code, be, and the same is hereby 12 amended to read as follows: 13 30-1413. DENIAL, SUSPENSION, REVOCATION OF REGISTRATION -- GROUNDS. The 14 director may by order deny, suspend or revoke registration of any broker- 15 dealer, salesman, investment adviser or investment adviser representative or 16 may impose an administrative penalty in an amount not to exceed ten thousand 17 dollars ($10,000) for each violation if he finds that the order is in the pub- 18 lic interest and that the applicant or registrant or, in the case of a broker- 19 dealer or investment adviser, any partner, control person, officer or direc- 20 tor: 21 (1)hHas filed an application for registration under this section which, 22 as of its effective date or as of any date after filing in the case of an 23 order denying effectiveness, was incomplete in any material respect or con- 24 tained any statement which was, in the light of the circumstances under which 25 it was made, false or misleading with respect to any material fact,; 26 (2)hHaswilfullywillfully violated orwilfullywillfully failed to com- 27 ply with any provision of this act or a predecessor act or any rule or order 28 under this act or a predecessor act,; 29 (3)hHas been convicted of any misdemeanor involving a security or any 30 aspect of the securities business or of any felony,; 31 (4)iIs permanently or temporarily enjoined by any court of competent 32 jurisdiction from engaging in or continuing any conduct or practice involving 33 any aspect of the securities business,; 34 (5)iIs the subject of an order of the director denying, suspending or 35 revoking registration as a broker-dealer, salesman, investment adviser or 36 investment adviser representative,; 37 (6)iIs the subject of an order entered within the past five (5) years by 38 the securities administrator of any other state, the United States securities 39 and exchange commission, the national association of securities dealers or the 40 national association of securities dealers regulation, inc., or any foreign 41 governmental agency or self-regulatory organization, denying, suspending or 42 revoking registration as a broker-dealer or salesman, investment adviser, or 43 investment adviser representative, or the substantial equivalent of those 2 1 terms as defined in this act, or is the subject of an order of the United 2 States securities and exchange commission suspending or expelling him from a 3 national securities exchange or national securities association registered 4 under the Securities Exchange Act of 1934, or is the subject of a United 5 States post-office fraud order, but 6 (a) The director may not institute a revocation or suspension proceeding 7 under this subsection more than one (1) year from the date of the order 8 relied on, and 9 (b) He may not enter any order under this subsection on the basis of any 10 order unless that order was based on facts which would currently consti- 11 tute a ground for an order under this section,; 12 (7)hHas engaged in dishonest or unethical practices in the securities 13 business,; 14 (8)iIs insolvent, either in the sense that his liabilities exceed his 15 assets or in the sense that he cannot meet his obligations as they mature, but 16 the director may not enter an order against a broker-dealer or investment 17 adviser under this subsection without a finding of insolvency as to the 18 broker-dealer or investment adviser,; 19 (9)hHas not complied with a condition imposed by the director under sec- 20 tion 30-1412, Idaho Code, or is not qualified on the basis of such factors as 21 training, experience or knowledge of the securities business,; or 22 (10)hHas failed to pay the proper filing fee, but the director may enter 23 only a denial order under this subsection and he shall vacate any such order 24 when the deficiency has been corrected. 25 The director may by order summarily postpone or suspend registration pend- 26 ing final determination of any proceeding under this section.
STATEMENT OF PURPOSE
RS 10529C1
Idaho Code 30-1413 is the section of the Idaho Securities
Act that provides the grounds for denial, suspension or
revocation of licenses for broker-dealers, investment advisers
and their agents. It currently applies to acts by any "partner,
officer or director". This legislation adds "control persons" to
this list. The Department is finding individuals with significant
disciplinary history who are major (sometimes sole) shareholders
of firms who do not have formal titles, yet exert considerable
influence over the management of a firm. Because they are not
a "partner, officer or director", a license cannot be denied
or revoked. This legislation also proposes to amend subsection
(6) of Idaho Code 30-1413. This amendment more clearly describes
the types oforders issued by other state and federal regulators
upon which the Department can base license suspensions, revocations
and denials.
FISCAL NOTE
No fiscal impact.
CONTACT:
Name: Marilyn Chastain, Department of Finance
Phone: 332-8070
Statement of Purpose/Fiscal Note Bill No. H22