2023 New Mexico Statutes › Chapter 58 - Financial Institutions and Regulations › Article 13C - New Mexico Uniform Securities › Article 4 - Broker-Dealers, Agents, Investment Advisers, Investment Adviser Representatives and Federal Covered Investment Advisers › Section 58-13C-412 - Denial, revocation, suspension, withdrawal, restriction, condition or limitation of registration.

A. If the director finds that the order is in the public interest and that Subsection C of this section authorizes the action, an order issued pursuant to the New Mexico Uniform Securities Act may postpone, deny, suspend or revoke any registration, limit the investment advisory activities that an applicant or registered person may perform in New Mexico or bar an applicant or registered person or a person who is a partner, officer or director or a person occupying a similar status or performing a similar function for an applicant or registered person from association with a registered broker-dealer or investment adviser or a federal covered investment adviser.
B. If the director finds that the order is in the public interest and Subsection C of this section authorizes the action, an order pursuant to the New Mexico Uniform Securities Act may censure or impose a bar on a registrant. If the director finds that the order is in the public interest and Paragraph (1), (2), (4), (5), (6), (8), (9), (10), (12) or (13) of Subsection C of this section authorizes the action, the director may also impose a civil penalty on a registrant in an amount not to exceed ten thousand dollars ($10,000) for each violation.
C. A person may be disciplined pursuant to Subsection A or B of this section, or both, if the person, or in the case of a broker-dealer or investment adviser, a partner, officer, director or a person having a similar status or performing similar functions or a person directly or indirectly controlling the broker-dealer or investment adviser:
(1) has filed an application for registration in New Mexico pursuant to the New Mexico Uniform Securities Act or the predecessor act within the previous ten years that, as of the effective date of registration or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained a statement that, in light of the circumstances under which it was made, was false or misleading with respect to a material fact;
(2) willfully violated or willfully failed to comply with the New Mexico Uniform Securities Act or the predecessor act or a rule adopted or order issued pursuant to the New Mexico Uniform Securities Act or the predecessor act within the previous ten years;
(3) has been convicted of a felony or within the previous ten years has been convicted of a misdemeanor involving a security, a commodity future or an option contract or an aspect of a business involving securities, commodities, investments, franchises, insurance, banking or finance;
(4) is enjoined or restrained by a court of competent jurisdiction in an action instituted by the director pursuant to the New Mexico Uniform Securities Act or the predecessor act, a state, the securities and exchange commission or the United States from engaging in or continuing an act, practice or course of business involving an aspect of a business involving securities, commodities, investments, franchises, insurance, banking or finance;
(5) is the subject of an order, issued after notice and opportunity for hearing by:
(a) the securities, depository institution, insurance or other financial services regulator of a state or by the securities and exchange commission or other federal agency denying, revoking, barring or suspending registration as a broker-dealer, agent, investment adviser, federal covered investment adviser or investment adviser representative;
(b) the securities regulator of a state or by the securities and exchange commission against a broker-dealer, agent, investment adviser, investment adviser representative or federal covered investment adviser;
(c) the securities and exchange commission or by a self-regulatory organization suspending or expelling the registrant from membership in the self-regulatory organization;
(d) a court adjudicating a United States postal service fraud order;
(e) the insurance regulator of a state denying, suspending or revoking registration as an insurance agent; or
(f) a depository institution or financial services regulator suspending or barring the person from the depository institution or other financial services business;
(6) is the subject of an adjudication or determination, after notice and opportunity for hearing, by the securities and exchange commission, the commodity futures trading commission, the federal trade commission, a federal depository institution regulator or a depository institution, insurance or other financial services regulator of a state that the person willfully violated the federal Securities Act of 1933, the federal Securities Exchange Act of 1934, the federal Investment Advisers Act of 1940, the federal Investment Company Act of 1940 or the federal Commodity Exchange Act, the securities or commodities law of a state or a federal or state law pursuant to which a business involving investments, franchises, insurance, banking or finance is regulated;
(7) is insolvent, either because the person's liabilities exceed the person's assets or because the person cannot meet the person's obligations as they mature, but the director shall not enter an order against an applicant or registrant pursuant to this paragraph without a finding of insolvency as to the applicant or registrant;
(8) refuses to allow or otherwise impedes the director from conducting an audit or inspection pursuant to Subsection D of Section 411 [58-13C-411 NMSA 1978] of the New Mexico Uniform Securities Act or refuses access to a registrant's office to conduct an audit or inspection pursuant to Subsection D of Section 411 of that act;
(9) has failed to reasonably 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 while under that person's supervision committed a violation of the New Mexico Uniform Securities Act or the predecessor act or a rule adopted or order issued pursuant to that act or the predecessor act within the previous ten years;
(10) has not paid the proper filing fee within thirty days after having been notified by the director of a deficiency, but the director shall vacate an order pursuant to this paragraph when the deficiency is corrected;
(11) after notice and opportunity for a hearing, has been found within the previous ten years:
(a) by a court of competent jurisdiction to have willfully violated the laws of a foreign jurisdiction pursuant to which the business of securities, commodities, investment, franchises, insurance, banking or finance is regulated;
(b) to have been the subject of an order of a securities regulator of a foreign jurisdiction denying, revoking or suspending the right to engage in the business of securities as a broker-dealer, agent, investment adviser, investment adviser representative or similar person; or
(c) to have been suspended or expelled from membership by or participation in a securities exchange or securities association operating pursuant to the securities laws of a foreign jurisdiction;
(12) is the subject of a cease and desist order issued by the securities and exchange commission or issued pursuant to the securities, commodities, investment, franchise, banking, finance or insurance laws of a state;
(13) has engaged in dishonest or unethical practices in the securities, commodities, investment, franchise, banking, finance or insurance business within the previous ten years; or
(14) is not qualified on the basis of factors such as training, experience and knowledge of the securities business. However, in the case of an application by an agent for a broker-dealer that is a member of a self-regulatory organization or by an individual for registration as an investment adviser representative, a denial order shall not be based on this paragraph if the individual has successfully completed all examinations required by Subsection D of this section. The director may require an applicant for registration pursuant to Section 402 [58-13C-402 NMSA 1978] or 404 [58-13C-404 NMSA 1978] of the New Mexico Uniform Securities Act who has not been registered in a state within the two years preceding the filing of an application in New Mexico to successfully complete an examination.
D. A rule adopted or order issued pursuant to the New Mexico Uniform Securities Act may require that an examination, including an examination developed or approved by an organization of securities regulators, be successfully completed by a class of individuals or all individuals. An order issued pursuant to the New Mexico Uniform Securities Act may waive, in whole or in part, an examination as to an individual and a rule adopted pursuant to that act may waive, in whole or in part, an examination as to a class of individuals if the director determines that the examination is not necessary or appropriate in the public interest and for the protection of investors.
E. The director may postpone, suspend or deny an application summarily; restrict, condition, limit or suspend a registration; or censure, bar or impose a civil penalty on a registrant before final determination of an administrative proceeding. Upon the issuance of an order, the director shall promptly notify each person subject to the order that the order has been issued, the reasons for the action and that within fifteen days after the receipt of a request in a record from the person, the matter will be scheduled for a hearing. If a hearing is not requested and none is ordered by the administrator within thirty days after the date of service of the order, the order becomes final by operation of law. If a hearing is requested or ordered, the director, after notice of and opportunity for hearing to each person subject to the order, may modify or vacate the order or extend the order until final determination.
F. If a hearing is requested or ordered, such hearing shall be conducted pursuant to Subsection B of Section 604 [58-13C-604 NMSA 1978] of the New Mexico Uniform Securities Act. An order shall not be issued pursuant to this section, except in accordance with Subsection E of this section, without:
(1) appropriate notice to the applicant or registrant;
(2) opportunity for hearing; and
(3) findings of fact and conclusions of law in a record.
G. A person that controls, directly or indirectly, a person not in compliance with this section may be disciplined by order of the director pursuant to Subsection A or B of this section, or both, to the same extent as the noncomplying person, unless the controlling person did not know, and in the exercise of reasonable care could not have known, of the existence of conduct that is a ground for discipline pursuant to this section.
H. The director shall not institute a proceeding pursuant to Subsection A or B of this section based solely on material facts actually known by the director unless an investigation or the proceeding is instituted within one year after the director actually acquires knowledge of the material facts.
History:
Laws 2009, ch. 82, § 412.
ANNOTATIONS
Effective dates.
— Laws 2009, ch. 82, § 704 made the New Mexico Uniform Securities Act effective January 1, 2010.