State Administrator Powers: Denials, Suspensions, and Revocations

Vocabulary flashcards covering the grounds, procedures, timelines, and legal terminology associated with state administrator punitive actions against securities professionals.

State Administrator

A regulatory authority empowered to take punitive actions—such as denial, suspension, or revocation of registration—against registered persons and issuers of registered securities.

Denial of Registration

A punitive action wherein the administrator rejects an initial application to prevent bad faith actors or applicants with problematic histories from entering the securities industry.

Public Interest Requirement

A mandatory statutory prerequisite requiring that any denial, suspension, or revocation enacted by the administrator must directly benefit the general public.

Enjoin / Enjoined

To legally prevent a person via court order from engaging in a particular action or activity, such as operating within the securities industry.

Ten-Year Disqualification Period

The statutory lookback window during which any felony conviction, a securities-related misdemeanor conviction, or a violation of state or federal securities laws can justify denial, suspension, or revocation.

Five-Year Foreign Violation Window

The specific time frame within which a violation of a foreign securities law serves as a valid circumstance for denial, suspension, or revocation of registration.

Lack of Experience Provision

A rule stating that registration cannot be suspended or revoked solely based on lack of experience, nor denied solely for lack of experience unless paired with a lack of training and/or knowledge.

Failure to Supervise

A specific violation and ground for regulatory action that applies exclusively to broker-dealers and investment advisers rather than individual agents.

Disclosure of Written Facts and Findings of Law

A required procedural element in which the administrator must provide a written explanation or summary detailing the factual and legal reasons for a denial, suspension, or revocation.

60-Day Hearing Request Window

The time frame an applicant or affected person has after receiving a denial, suspension, or revocation notice to request a hearing to appeal the decision.

Suspension

A punitive action that temporarily removes a person's registration, barring them from operating in the securities industry for a specified duration, often weeks to months.

Revocation

A severe punitive regulatory action that permanently removes a person's or entity's securities registration status.

Prompt Notification Requirement

The legal obligation for registered persons and issuers to disclose material events or disqualifying circumstances to the administrator as soon as possible, but no later than 30 days after the event.

15-Day Hearing Scheduling Mandate

The requirement that once an affected person requests a hearing regarding a suspension or revocation, the hearing must be scheduled within 15 days.

Inactive Registration Status

The condition of an individual representative's registration when their employing firm is suspended or revoked; the representative cannot conduct registered activities until associating with another firm.