(D) OBJECTIONS.—No objection to an 
order of the Secretary shall be considered by 
the court unless such objection was urged be-
fore the Department or, if it was not so urged, 
unless there were reasonable grounds for failure 
to do so. 
(E) REVIEW.—The judgment and decree of 
the court affirming, modifying, or setting aside 
any such order of the Secretary shall be subject 
only to review by the Supreme Court of the 
United States upon certification or certiorari as 
provided in section 1254 of title 28, United 
States Code. 
(f) ENFORCEMENT.— 
(1) FAILURE
TO
OBEY.—If any licensee or 
other person against which or against whom an 
order is issued under this section fails to obey the 
order, the Secretary— 
(A) may apply to the United States court 
of appeals, within the circuit where the licensee 
has its principal place of business, for the en-
forcement of the order; and 
(B) shall file a transcript of the record 
upon which the order complained of was en-
tered. 
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(2) NOTICE.—Upon the filing of the application 
under paragraph (1), the court shall cause notice 
thereof to be served on the licensee or other person. 
(3) EVIDENCE.—The evidence to be considered, 
the procedure to be followed, and the jurisdiction of 
the court shall be the same as is provided in sub-
section (e) for applications to set aside or modify or-
ders. 
SEC. 14. EXAMINATIONS AND INVESTIGATIONS. 
(a) INVESTIGATIONS.— 
(1) IN
GENERAL.—The Secretary may make 
such investigations as the Secretary deems necessary 
to determine whether a licensee or any other person 
has engaged or is about to engage in any acts or 
practices which constitute or will constitute a viola-
tion of any provision of this Act, or of any rule or 
regulation under this Act, or of any order issued 
under this Act. 
(2) STATEMENTS.—The Secretary shall permit 
any person to file with it a statement in writing, 
under oath or otherwise as the Secretary shall deter-
mine, as to all the facts and circumstances con-
cerning the matter to be investigated. 
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(3) OATHS AND AFFIRMATIONS.—For the pur-
pose of any investigation under this subsection, the 
Secretary is empowered to— 
(A) administer oaths and affirmations; 
(B) subpoena witnesses; 
(C) compel the attendance of witnesses; 
(D) take evidence; and 
(E) require the production of any books, 
papers, and documents that are relevant to the 
inquiry. 
(4) ATTENDANCE AND PRODUCTION.— 
(A) IN
GENERAL.—Attendance of wit-
nesses and the production of any such records 
under this section may be required from any 
place in the United States. 
(B) FAILURE TO OBEY.—In case of contu-
macy by, or refusal to obey a subpoena issued 
to, any person, including a licensee, the Sec-
retary may invoke the aid of any court of the 
United States within the jurisdiction of which 
such investigation or proceeding is carried on, 
or where such person resides or carries on busi-
ness, in requiring the attendance and testimony 
of witnesses and the production of books, pa-
pers, and documents, and such court may issue 
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an order requiring such person to appear before 
the Department, thereto produce records, if so 
ordered, or to give testimony touching the mat-
ter under investigation. 
(C) ENFORCEMENT.—Any failure to obey 
such order of the court may be punished by 
such court as a contempt thereof. 
(D) SERVICE OF PROCESS.—All process in 
any such case may be served in the judicial dis-
trict whereof such person is an inhabitant or 
wherever he may be found. 
(b) EXAMINATIONS.— 
(1) IN GENERAL.—Each licensee shall be sub-
ject to examinations made by direction of the De-
partment, which may be conducted with the assist-
ance of a private sector entity that has both the 
qualifications to conduct and expertise in conducting 
such examinations, and the cost of such examina-
tions, including the compensation of the examiners, 
may, in the discretion of the Department, be as-
sessed against the licensee examined and when so 
assessed shall be paid by the licensee. 
(2) FEES.—Fees collected under this subsection 
shall be deposited in the account for salaries and ex-
penses of the Department, and are authorized to be 
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appropriated solely to cover the costs of examina-
tions and other oversight activities under this Act. 
(3) REPORTS.—Every licensee shall make such 
reports to the Secretary at such times and in such 
form as the Secretary may require, except that the 
Secretary is authorized to exempt from making such 
reports any such licensee that is registered under 
the Investment Company Act of 1940 (15 U.S.C. 
80a–1 et seq.) to the extent necessary to avoid dupli-
cation in reporting requirements. 
(4) REQUIRED INFORMATION.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), each licensee shall be exam-
ined not less frequently than once every 2 years 
in such detail so as to determine whether or 
not— 
(i) the licensee has engaged solely in 
lawful activities and those contemplated by 
this Act; 
(ii) the licensee has engaged in pro-
hibited conflicts of interest under section 
16; 
(iii) the licensee has acquired or exer-
cised illegal control of a covered business 
concern; 
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(iv) the licensee has made investments 
in covered businesses for not less than 1 
year; 
(v) the licensee has adhered to port-
folio diversification limits as stated under 
section 9; 
(vi) the licensee has engaged in re-
lending, foreign investments, or passive in-
vestments; 
(vii) the licensee has charged an inter-
est rate in excess of the maximum per-
mitted by law; or 
(viii) the licensee has adhered to the 
requirements to make covered investments. 
(B) WAIVER.—The Secretary may waive 
any examination required under subparagraph 
(A)— 
(i) for not more than 1 year if, in the 
discretion of the Secretary, the Secretary 
determines such a delay would be appro-
priate, based on the amount of debentures 
being issued by the licensee and the repay-
ment record of the licensee, the prior oper-
ating experience of the licensee, the con-
tents and results of the last examination 
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and the management expertise of the li-
censee; or 
(ii) if it is the examination of a li-
censee whose operations have been sus-
pended while the licensee is involved in liti-
gation or is in receivership. 
(c) VALUATIONS.— 
(1) FREQUENCY OF VALUATIONS.— 
(A) IN GENERAL.—Each licensee shall sub-
mit to the Secretary a written valuation of the 
loans and investments of the licensee not less 
often than semiannually or otherwise upon the 
request of the Secretary, except that any li-
censee with no leverage outstanding shall sub-
mit such valuations annually, unless the Sec-
retary determines otherwise. 
(B) MATERIAL ADVERSE CHANGES.—Not 
later than 30 days after the end of a fiscal 
quarter of a licensee during which a material 
adverse change in the aggregate valuation of 
the loans and investments or operations of the 
licensee occurs, the licensee shall notify the Sec-
retary in writing of the nature and extent of 
that change. 
(C) INDEPENDENT CERTIFICATION.— 
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(i) IN GENERAL.—Not less frequently 
than once during each fiscal year, each li-
censee shall submit to the Secretary the fi-
nancial statements of the licensee, audited 
by an independent certified public account-
ant approved by the Secretary. 
(ii) 
AUDIT
REQUIREMENTS.—Each 
audit conducted under clause (i) shall in-
clude— 
(I) a review of the procedures 
and documentation used by the li-
censee in preparing the valuations re-
quired by this section; and 
(II) a statement by the inde-
pendent certified public accountant 
that such valuations were prepared in 
conformity with the valuation criteria 
applicable to the licensee established 
in accordance with paragraph (2). 
(2) VALUATION
CRITERIA.—Each valuation 
submitted under this subsection shall be prepared by 
the licensee in accordance with valuation criteria, 
which shall— 
(A) be established or approved by the Sec-
retary; and 
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(B) include appropriate safeguards to en-
sure that the noncash assets of a licensee are 
not overvalued. 
SEC. 15. INJUNCTIONS AND OTHER ORDERS. 
(a) IN GENERAL.—Whenever, in the judgment of the 
Secretary, a licensee or any other person has engaged or 
is about to engage in any acts or practices which con-
stitute or will constitute a violation of any provision of 
this Act, or of any rule or regulation under this Act, or 
of any order issued under this Act, the Secretary may 
make application to the proper district court of the United 
States or a United States court of any place subject to 
the jurisdiction of the United States for an order enjoining 
such acts or practices, or for an order enforcing compli-
ance with such provision, rule, regulation, or order, and 
such courts shall have jurisdiction of such actions and, 
upon a showing by the Secretary that such licensee or 
other person has engaged or is about to engage in any 
such acts or practices, a permanent or temporary injunc-
tion shall be granted without bond. 
(b) EXCLUSIVE JURISDICTION.—In any proceeding 
under subsection (a), the court as a court of equity— 
(1) may, to such extent as the court deems nec-
essary, take exclusive jurisdiction of the licensee or 
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licensees and the assets thereof, wherever located; 
and 
(2) shall have jurisdiction in any such pro-
ceeding to appoint a trustee or receiver to hold or 
administer under the direction of the court the as-
sets so possessed. 
(c) TRUSTEE AND RECEIVERSHIP.— 
(1) AUTHORITY.—The Secretary shall have au-
thority to act as trustee or receiver of the licensee. 
(2) APPOINTMENT.—Upon request by the Sec-
retary, the court may appoint the Secretary to act 
in such capacity unless the court deems such ap-
pointment inequitable or otherwise inappropriate by 
reason of the special circumstances involved. 
SEC. 16. CONFLICTS OF INTEREST. 
(a) IN GENERAL.—For the purpose of controlling 
conflicts of interest that may be detrimental to covered 
business concerns, to licensees, to the shareholders, part-
ners, or members of either, or to the purposes of this Act, 
the Secretary shall adopt regulations to govern trans-
actions with any officer, director, shareholder, partner, or 
member of any licensee, or with any person or concern, 
in which any interest, direct or indirect, financial or other-
wise, is held by any officer, director, shareholder, partner, 
or member of any licensee, or any person or concern with 
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an interest, direct or indirect, financial or otherwise, in 
any licensee. 
(b) PUBLIC
DISCLOSURE.—Regulations adopted 
under subsection (a) shall include appropriate require-
ments for public disclosure necessary to the purposes of 
this section. 
(c) 
CONSULTATION
WITH
EXISTING
REGULA-
TIONS.—In making any initial determination relating to 
a regulation adopted under subsection (a), the Secretary 
shall consult the regulations promulgated by the Adminis-
trator of the Small Business Administration on financing 
which constitute conflicts of interest in accordance with 
section 312 of the Small Business Investment Act of 1958 
(15 U.S.C. 687d). 
(d) REGULATIONS.—The Secretary shall promulgate 
regulations under this section in accordance with the im-
plementation milestones as set forth in section 3(l) of this 
Act. 
SEC. 17. REMOVAL OR SUSPENSION OF MANAGEMENT OF-
FICIALS. 
(a) DEFINITION
OF MANAGEMENT OFFICIAL.—In 
this section, the term ‘‘management official’’ means an of-
ficer, director, general partner, manager, employee, agent, 
or other participant in the management or conduct of the 
affairs of a licensee. 
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(b) REMOVAL OF MANAGEMENT OFFICIALS.— 
(1) NOTICE OF REMOVAL.—The Secretary may 
serve upon any management official a written notice 
of its intention to remove that management official 
whenever, in the opinion of the Secretary— 
(A) such management official— 
(i) has willfully and knowingly com-
mitted any substantial violation of— 
(I) this Act; 
(II) any regulation issued under 
this Act; or 
(III) a cease-and-desist order 
which has become final; or 
(ii) has willfully and knowingly com-
mitted or engaged in any act, omission, or 
practice which constitutes a substantial 
breach of a fiduciary duty of that person 
as a management official; and 
(B) the violation or breach of fiduciary 
duty is one involving personal dishonesty on the 
part of such management official. 
(2) CONTENTS OF NOTICE.—A notice of inten-
tion to remove a management official, as provided in 
paragraph (1), shall contain a statement of the facts 
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constituting grounds therefor, and shall fix a time 
and place at which a hearing will be held thereon. 
(3) HEARINGS.— 
(A) TIMING.—A hearing described in para-
graph (2) shall be fixed for a date not earlier 
than 30 days nor later than 60 days after the 
date of service of notice of the hearing, unless 
an earlier or a later date is set by the Secretary 
at the request of— 
(i) the management official, and for 
good cause shown; or 
(ii) the Attorney General of the 
United States. 
(B) CONSENT.—Unless the management 
official shall appear at a hearing described in 
this paragraph in person or by a duly author-
ized representative, that management official 
shall be deemed to have consented to the 
issuance of an order of removal under para-
graph (4)(A). 
(4) ISSUANCE OF ORDER OF REMOVAL.— 
(A) IN GENERAL.—In the event of consent 
under paragraph (3)(B), or if upon the record 
made at a hearing described in this subsection, 
the Secretary finds that any of the grounds 
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specified in the notice of removal has been es-
tablished, the Secretary may issue such orders 
of removal from office as the Secretary deems 
appropriate. 
(B) EFFECTIVENESS.—An order under 
subparagraph (A) shall— 
(i) become effective at the expiration 
of 30 days after the date of service upon 
the subject licensee and the management 
official concerned (except in the case of an 
order issued upon consent as described in 
paragraph (3)(B), which shall become ef-
fective at the time specified in such order); 
and 
(ii) remain effective and enforceable, 
except to such extent as it is stayed, modi-
fied, terminated, or set aside by action of 
the Secretary or a reviewing court in ac-
cordance with this section. 
(c) AUTHORITY TO SUSPEND OR PROHIBIT PARTICI-
PATION.— 
(1) IN GENERAL.—The Secretary may, if the 
Secretary deems it necessary for the protection of 
the licensee or the interests of the Department, sus-
pend from office or prohibit from further participa-
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tion in any manner in the management or conduct 
of the affairs of the licensee, or both, any manage-
ment official referred to in subsection (b)(1), by 
written notice to such effect served upon the man-
agement official. 
(2) EFFECTIVENESS.—A suspension or prohibi-
tion under paragraph (1)— 
(A) shall become effective upon service of 
notice under paragraph (1); and 
(B) unless stayed by a court in proceedings 
authorized by paragraph (3), shall remain in ef-
fect— 
(i) pending the completion of the ad-
ministrative proceedings pursuant to a no-
tice of intention to remove served under 
subsection (b); and 
(ii) until such time as the Secretary 
shall dismiss the charges specified in the 
notice, or, if an order of removal or prohi-
bition is issued against the management 
official, until the effective date of any such 
order. 
(3) JUDICIAL REVIEW.—Not later than 10 days 
after any management official has been suspended 
from office or prohibited from participation in the 
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management or conduct of the affairs of a licensee, 
or both, under paragraph (1), that management offi-
cial may apply to the United States District Court 
for the judicial district in which the home office of 
the licensee is located, or the United States District 
Court for the District of Columbia, for a stay of the 
suspension or prohibition pending the completion of 
the administrative proceedings pursuant to a notice 
of intent to remove served upon the management of-
ficial under subsection (b), and such court shall have 
jurisdiction to stay such action. 
(d) 
AUTHORITY
TO
SUSPEND
ON
CRIMINAL 
CHARGES.— 
(1) IN GENERAL.—Whenever a management of-
ficial is charged in any information, indictment, or 
complaint authorized by a United States attorney, 
with the commission of or participation in a felony 
involving dishonesty or breach of trust, the Sec-
retary may, by written notice served upon that man-
agement official, suspend that management official 
from office or prohibit that management official 
from further participation in any manner in the 
management or conduct of the affairs of the li-
censee, or both. 
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(2) EFFECTIVENESS.—A suspension or prohibi-
tion under paragraph (1) shall remain in effect until 
the subject information, indictment, or complaint is 
finally disposed of, or until terminated by the Sec-
retary. 
(3) AUTHORITY UPON CONVICTION.—If a judg-
ment of conviction with respect to an offense de-
scribed in paragraph (1) is entered against a man-
agement official, then at such time as the judgment 
is not subject to further appellate review, the Sec-
retary may issue and serve upon the management 
official an order removing that management official, 
which removal shall become effective upon service of 
a copy of the order upon the licensee. 
(4) AUTHORITY
UPON
DISMISSAL
OR
OTHER 
DISPOSITION.—A finding of not guilty or other dis-
position of charges described in paragraph (1) shall 
not preclude the Secretary from thereafter insti-
tuting proceedings to suspend or remove the man-
agement official from office, or to prohibit the man-
agement official from participation in the manage-
ment or conduct of the affairs of the licensee, or 
both, pursuant to subsection (b) or (c). 
(e) NOTIFICATION TO LICENSEES.—Copies of each 
notice required to be served on a management official 
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