Series 66

AAA

Remedies and Administrative Procedures - Administrator Authority

Investigate
At any time, the Administrator can conduct public or private investigations, within or outside of a state, which the Administrator considers necessary or appropriate to determine whether a person has violated, is violating, or is about to violate a rule, or to aid in the enforcement of regulations of the USA.

  • In conducting an investigation, the Administrator can at any time require (or permit) a person to testify, file a statement, or produce a record regarding facts or circumstances of a situation.

  • The Administrator can also publish a record that is of direct concern to an action, proceeding, or investigation.

In general, the Administrator has the ability to inspect records within (and outside of) his or her state. The Administrator can also require those being investigated to provide written statements under oath.

  • Issue Subpoenas
    At any time, the Administrator may issue a subpoena for investigation-related information, if he or she has jurisdiction over the transaction or security in question.

  • Other Provisions
    In addition to those already listed, the Administrator has the following powers:
    • To cooperate in SEC investigations
    • To publish information concerning a violation
    • To compel testimony regarding a violation, even if such testimony might incriminate the individual

Jurisdiction
Jurisdiction comes down to where a securities transaction was made and whether a state Administrator has the authority to regulate the activity.

  • Jurisdiction includes any offer, or offer to sell that:
    • originates or takes place in the state.
    • is directed to the state and received "at the place which it is directed".
    • is accepted in a state:
      • if the offeree reasonably believes the offeror to be present in the state.
      • and has not been previously communicated to the offeror outside the state.

  • Jurisdiction as applied to publications or radio
    An Administrator does not have jurisdiction over the following:
    • a publication that is a bona fide newspaper or other print media - if the publication has two-thirds of its circulation outside of the state in which it is published, or is circulated outside of the publication state.
    • a television or radio broadcast that is syndicated from outside the state.
    • any electronic communication originating from outside the state.
    • any electronic communication that comes from within the state, but is not intended for distribution within the state.

  • Jurisdiction as applied to investment advice and misrepresentation
    The Administrator has jurisdiction if an individual/entity attempts to commit fraud in the Administrator's state, whether or not the individual/entity in question is in the state or not.

  • Jurisdiction as applied to securities
    When it comes to exempt securities transactions, the Administrator is permitted to deny or revoke any specific transaction or security exemption, but cannot enter the order to do so unless prior notice is given to all parties, an opportunity is given for a hearing, and written findings are provided. If the Administrator issues a summary order to deny or revoke pending final determination, he or she must notify all interested parties of the reasons for entering the order and inform them that a hearing will be granted within 15 days of a written request.


Exam Tips and Tricks
An Administrator generally has jurisdiction if a transaction is originated or accepted in his/her state, or if it is directed to the state.


Administrative Actions
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