2023 Missouri Revised Statutes › Title XXIV - Business and Financial Institutions › Chapter 361 - Division of Finance and Powers of Director of Finance › Section 361.260 - Violations, director to serve written notice of charges — hearing, temporary orders, when — orders set aside, procedure — penalty.

Title XXIV BUSINESS AND FINANCIAL INSTITUTIONS
Chapter 361
• Effective - 28 Aug 2023, 2 histories
361.260. Violations, director to serve written notice of charges — hearing, temporary orders, when — orders set aside, procedure — penalty. —
1. Whenever the director shall have reason to believe that the capital stock of any corporation subject to the provisions of this chapter is reduced by impairment or otherwise, below the amount required by law, or by its certificates or articles of agreement, the director shall issue a notice of charges in respect thereof.
2. Whenever the director has reason to believe from any examination or investigation made by the director or his or her examiners, that any corporation subject to the provisions of this chapter, or any director, officer, employee, agent, or other person participating in the conduct of the affairs of such corporation, or any foreign corporation licensed by the director to do business under this chapter or chapter 362 is engaging in, has engaged in, or is about to engage in:
(1) An unsafe or unsound practice in conducting the business of such corporation;
(2) A violation of law, rule, or director-imposed written condition;
(3) A violation of any written agreement entered into with the director; or
(4) A violation of the corporation's charter,
­­the director may issue and serve upon the corporation or such director, officer, employee, agent, or other person a notice of charges in respect thereof.
3. Whenever it shall appear to the director that any corporation subject to the provisions of this chapter does not keep its books and accounts in such manner as to enable him or her readily to ascertain its true condition or that wrong entries or unlawful uses of the funds of the corporation have been made, the director may issue and serve upon the corporation or any appropriate director, officer, employee, agent, or other person a notice of charges in respect thereof.
4. The notice of charges shall contain a statement of the facts constituting the deficiencies, alleged violation or violations, improper use of funds, or unsafe or unsound practice or practices, and shall fix a time and place at which a contested hearing will be held to determine whether an order to cease and desist therefrom should be issued against the corporation or the director, officer, employee, agent, or other person participating in the conduct of the affairs of such corporation.
5. In the event the party or parties so served shall fail to appear at the hearing, or shall consent to the cease and desist order, or in the event the director shall find that the fact of any deficiency, violation, unsafe or unsound practice, inadequate recordkeeping, or improper use of funds specified has been established, the director may issue and serve upon the corporation or the director, officer, employee, agent, or other person participating in the conduct of the affairs of the corporation an order to cease and desist from the actions, violations, or practices charged.
6. The cease and desist order:
(1) May require the corporation or its directors, officers, employees, agents, and other persons participating in the conduct of the affairs of such corporation to cease and desist from such actions, violations, or practices;
(2) May require the corporation or its directors, officers, employees, agents, or other persons participating in the conduct of the affairs of such corporation to take affirmative action to correct the conditions resulting from any such actions, violations, or practices;
(3) Shall require that, if the director determines that the capital of the corporation is impaired, the corporation make good the deficiency forthwith or within a time specified in the order;
(4) May, if the director determines that the corporation does not keep adequate records, determine and prescribe such books of account as the director, in his discretion, shall require of the corporation for the purpose of keeping accurate and convenient records of the transactions and accounts; and
(5) Shall, if the director determines that wrong entries or unlawful uses of the funds of the corporation have been made, order that the entries shall be corrected, and the sums unlawfully paid out restored by the person or persons responsible for the wrongful or illegal payment thereof.
7. If a notice of charges served under this section specifies, on the basis of particular facts and circumstances, that a corporation's books and records are so incomplete or inaccurate that the director is unable, through the normal supervisory process, to determine the financial condition of that corporation or the details or purpose of any transaction or transactions that may have a material effect on the financial condition of that corporation, the director may issue a temporary order requiring the cessation of any activity or practice which gave rise, whether in whole or in part, to the incomplete or inaccurate state of the books or records, or affirmative action to restore such books or records to a complete and accurate state, until the completion of the proceedings under this section. Any temporary order issued under this subsection shall become effective upon service and, unless set aside, limited or suspended by a court, shall remain in effect and enforceable until the earlier of the completion of the proceedings initiated under this section or the date on which the director determines by examination or otherwise that the corporation's books and records are accurate and reflect the financial condition of the corporation.
8. Whenever it shall appear to the director that the violation or threatened violation or the unsafe or unsound practice or practices specified in the notice of charges served upon the corporation or any director, officer, employee, agent, or other person participating in the conduct of the affairs of such corporation pursuant to subsection 4 of this section, or the continuation thereof, is likely to cause insolvency or significant dissipation of assets or earnings of the corporation, or is likely to weaken the condition of the corporation or otherwise prejudice the interests of its depositors prior to the completion of the proceedings conducted pursuant to said subsection, the director may issue a temporary order, effective immediately, requiring the corporation or such director, officer, employee, agent, or other person to cease and desist from any such violation or practice and to take affirmative action to prevent such insolvency, dissipation, condition, or prejudice pending completion of such proceedings. Such order shall remain effective and enforceable pending the completion of the administrative proceedings pursuant to such notice and until such time as the director shall dismiss the charges specified in such notice or if a cease and desist order is issued against the corporation or such director, officer, employee, agent, or other person, until the effective date of such order. The corporation, director, officer, employee, agent, or other person may, within ten days after having been served with a temporary cease and desist order, apply to the circuit court of Cole County for an order setting aside, limiting, or suspending the enforcement, operation, or effectiveness of such order.
9. If any corporation, or any director, officer, employee, agent, or other person participating in the conduct of the affairs of such corporation shall fail or refuse to comply with any duly issued order provided for in this chapter and chapter 362, the corporation or such director, officer, employee, agent, or other person shall pay a civil penalty of not more than one thousand dollars per day for each day the failure or refusal shall continue. The penalty shall be assessed and collected by the director of the division. In determining the amount of the penalty, the director shall take into account the appropriateness of the penalty with respect to the size of the financial resources and good faith of the corporation or person charged, the gravity of the violation, the history of previous violations, and such other matters as justice may require. In addition to the penalty, the director may, in his or her discretion, report the delinquency to the attorney general, with a request that the attorney general proceed as provided in section 361.270, and in the event of such request, the attorney general shall proceed.
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(RSMo 1939 § 7904, A.L. 1967 p. 445, A.L. 1977 S.B. 420, A.L. 1985 H.B. 408, A.L. 1990 H.B. 1456, A.L. 2023 S.B. 13)
Prior revisions: 1929 § 5310; 1919 § 11698