Code of Massachusetts Regulations › 950 CMR - OFFICE OF THE SECRETARY OF THE COMMONWEALTH › Title 950 CMR 10.00 - Adjudicatory Proceedings: Securities Division › Section 10.06 - Initiation of Formal Adjudicatory Proceedings

Current through Register 1525, July 5, 2024
(a)
Commencement of Adjudicatory
			 Proceeding
. The Division may commence an Adjudicatory Proceeding
			 by filing in writing a Notice of Adjudicatory Proceeding signed by the Director
			 or other duly designated person acting in that capacity and an Administrative
			 Complaint.
(b)
Form and
			 Content
. The Administrative Complaint shall state clearly and
			 concisely the facts which are grounds for the proceeding, the relief sought,
			 and any additional information required by applicable statutes and regulations.
			 The Notice shall inform the party or parties named of their right to request an
			 administrative hearing in the time prescribed by this regulation.
(c)
Temporary order to cease and
			 desist
. Simultaneous with the commencement of an adjudicatory
			 proceeding or at any time thereafter until conclusion of the proceeding, the
			 Division may request a temporary order to cease and desist from the Presiding
			 Officer. The request may be made
ex parte
. The request for a
			 temporary order to cease and desist shall contain a statement setting forth the
			 basis for such request, including, the likely irreparable harm to the public
			 interest which would result if such an order were not issued. The statement may
			 be made in an affirmation filed by the Division and supported by facts
			 contained in the Administrative Complaint and supporting papers. Unless
			 otherwise provided, the order must be served within 24 hours of the time of its
			 signing. The order must notify the Party subject to the order of his right to
			 request an administrative hearing and that such hearing must be set down within
			 20 days after receipt by the Division of the request for hearing to determine
			 if the order shall become permanent and final.
(d)
Summary Suspension or
			 Postponement of Registration of Broker-Dealer or Agent; Summary Suspension or
			 Postponement of Effectiveness of Registration Statement; Summary Denial or
			 Revocation of Exemption from Registration
. Simultaneous with the
			 commencement of an adjudicatory proceeding or at anytime thereafter until
			 conclusion of the proceeding, the Presiding Officer may, upon motion of the
			 Division or upon his or her own motion, summarily suspend or postpone the
			 registration of a broker/dealer or agent, summarily suspend or postpone the
			 effectiveness of a registation statement or summarily deny orrevoke an
			 exemption from registration. A motion may be made
ex parte
.
			 The order of suspension, postponement, denial or revocation shall set forth the
			 basis for the Order, including specific findings on the need for
ex
			 parte
order, if required by law. If a registration of broker/dealer is
			 at issue, the order shall provide for notice to the applicant or registrant; if
			 the applicant or registrant is an agent, notice to the agent and the employer,
			 or prospective employer of the agent; if a registration statement or exemption
			 from registration is at issue, notice to interested parties of the right to
			 request a hearing and that such hearing will be set down within fifteen days of
			 receipt of written request for hearing. The Presiding Officer may also order a
			 hearing upon Motion of the Division or upon his or her own motion.
(e)
Answer
. Within
			 21 days of service of the Notice of Adjudicatory Hearing and Administrative
			 Complaint, the Respondent shall file an answer to it. Failure to answer timely
			 will be considered a default and may result in the entry of a default judgment
			 or such other action as the Presiding Officer may deem appropriate.
(f)
Form of Answer
.
			 The Answer shall contain full, direct and specific answers to each claim set
			 forth in the Administrative Complaint admitting, denying, or explaining
			 material facts. If there is insufficient knowledge to answer with specificity,
			 it shall so be stated and, thus, shall be treated as a denial of the claim. The
			 Answer shall contain all affirmative defenses which are relied upon and shall
			 cite the statute(s) and/or regulation(s) which form the basis of each defense.
			 Failure to answer in the manner set forth above may result in the allegations
			 set forth in the Administrative Complaint being deemed as admitted or such
			 other actions as the Presiding Officer may deem appropriate.
(g)
Amendments and Withdrawal of
			 Pleadings
. The Presiding Officer upon his own initiative or upon
			 the motion of any Party may, in his discretion, order any Party to file a
			 pleading, or to reply to any pleading and further permit either Party to amend
			 its pleadings upon conditions just to all Parties.