SECTIONS 25530-25536 - California Statutes

CORPORATIONS CODE

SECTION 25530-25536

25530. (a) Whenever it appears to the commissioner that any person
has engaged or is about to engage in any act or practice constituting
a violation of any provision of this division or any rule or order
hereunder, the commissioner may in the commissioner's discretion
bring an action in the name of the people of the State of California
in the superior court to enjoin the acts or practices or to enforce
compliance with this law or any rule or order hereunder. Upon a
proper showing, a permanent or preliminary injunction, restraining
order, or writ of mandate shall be granted and a receiver, monitor,
conservator, or other designated fiduciary or officer of the court
may be appointed for the defendant or the defendant's assets, or any
other ancillary relief may be granted as appropriate.
A receiver, monitor, conservator, or other designated fiduciary or
officer of the court appointed by the superior court pursuant to
this section may, with the approval of the court, exercise any or all
of the powers of the defendant's officers, directors, partners,
trustees or persons who exercise similar powers and perform similar
duties, including the filing of a petition for bankruptcy. No action
at law or in equity may be maintained by any party against the
commissioner, or a receiver, monitor, conservator, or other
designated fiduciary or officer of the court, by reason of their
exercising these powers or performing these duties pursuant to the
order of, or with the approval of, the superior court.
(b) If the commissioner determines it is in the public interest,
the commissioner may include in any action authorized by subdivision
(a) a claim for ancillary relief, including but not limited to, a
claim for restitution or disgorgement or damages on behalf of the
persons injured by the act or practice constituting the subject
matter of the action, and the court shall have jurisdiction to award
additional relief.
(c) In any case in which a defendant is ordered by the court to
pay restitution to a victim, the court may in its order require the
payment as a money judgment, which shall be enforceable by a victim
as if the restitution order were a separate civil judgment, and
enforceable in the same manner as is provided for the enforcement of
any other money judgment. Any order issued under this subdivision
shall contain provisions that are designed to achieve a fair and
orderly satisfaction of the judgment.

25530.1. In any proceeding under Section 25530, the court may
prohibit, conditionally or unconditionally, and permanently or for
such period of time as it shall determine, any person who violated
Section 25401 from acting as an officer or director of any issuer
that has securities qualified pursuant to Section 25110, or that has
securities or a transaction exempt from qualification pursuant to
Section 25100, 25102, or 25103, if the person's conduct demonstrates
unfitness to serve as an officer or director of the issuer.

25531. (a) The commissioner in his discretion (1) may make such
public or private investigations within or outside of this state as
he deems necessary to determine whether any person has violated or is
about to violate any provision of this law or any rule or order
hereunder or to aid in the enforcement of this law or in the
prescribing of rules and forms hereunder, and (2) may publish
information concerning any violation of this law or any rule or order
hereunder.
(b) In making any investigation authorized by subdivision (a) of
this section, the commissioner may, for a reasonable time not
exceeding 30 days, take possession of the books, records, accounts
and other papers pertaining to the business of any broker-dealer or
investment adviser and place a keeper in exclusive charge of them in
the place where they are usually kept. During such possession no
person shall remove or attempt to remove any of the books, records,
accounts, or other papers except pursuant to a court order or with
the consent of the commissioner; but the directors, officers,
partners, and employees of the broker-dealer or investment adviser
may examine them, and employees shall be permitted to make entries
therein reflecting current transactions.
(c) For the purpose of any investigation or proceeding under this
law, the commissioner or any officer designated by him may administer
oaths and affirmations, subpoena witnesses, compel their attendance,
take evidence, and require the production of any books, papers,
correspondence, memoranda, agreements, or other documents or records
which the commissioner deems relevant or material to the inquiry.
(d) In case of contumacy by, or refusal to obey a subpoena issued
to, any person, the superior court, upon application by the
commissioner, may issue to the person an order requiring him to
appear before the commissioner, or the officer designated by him,
there to produce documentary evidence, if so ordered, or to give
evidence touching the matter under investigation or in question.
Failure to obey the order of the court may be punished by the court
as a contempt.
(e) No person is excused from attending and testifying or from
producing any document or record before the commissioner, or in
obedience to the subpoena of the commissioner or any officer
designated by him, or in any proceeding instituted by the
commissioner, on the ground that the testimony or evidence
(documentary or otherwise) required of him may tend to incriminate
him or subject him to a penalty or forfeiture; but no individual may
be prosecuted or subjected to any penalty or forfeiture for or on
account of any transaction, matter, or thing concerning which he is
compelled, after validly claiming his privilege against
self-incrimination, to testify or produce evidence (documentary or
otherwise), except that the individual testifying is not exempt from
prosecution and punishment for perjury or contempt committed in
testifying.

25532. (a) If, in the opinion of the commissioner, (1) the sale of
a security is subject to qualification under this law and it is being
or has been offered or sold without first being qualified, the
commissioner may order the issuer or offeror of the security to
desist and refrain from the further offer or sale of the security
until qualification has been made under this law or (2) the sale of a
security is subject to the requirements of Section 25100.1, 25101.1,
or 25102.1 and the security is being or has been offered or sold
without first meeting the requirements of those sections, the
commissioner may order the issuer or offeror of that security to
desist and refrain from the further offer or sale of the security
until those requirements have been met.
(b) If, in the opinion of the commissioner, a person has been or
is acting as a broker-dealer or investment adviser, or has been or is
engaging in broker-dealer or investment adviser activities, in
violation of Section 25210, 25230, or 25230.1, the commissioner may
order that person to desist and refrain from the activity until the
person has been appropriately licensed or the required filing has
been made under this law.
(c) If, in the opinion of the commissioner, a person has violated
or is violating Section 25401, the commissioner may order that person
to desist and refrain from the violation.
(d) If, after an order has been served under subdivision (a), (b),
or (c), a request for hearing is filed in writing within 30 days of
the date of service of the order by the person to whom the order was
directed, a hearing shall be held in accordance with provisions of
the Administrative Procedure Act, Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code, and
the commissioner shall have all of the powers granted under that
chapter. Unless the hearing is commenced within 15 business days
after the request is filed (or the person affected consents to a
later date), the order is rescinded.
If that person fails to file a written request for a hearing
within 30 days from the date of service of the order, the order shall
be deemed a final order of the commissioner and is not subject to
review by any court or agency, notwithstanding Section 25609.

25533. The commissioner may refer any evidence available concerning
any violation of this law or of any rule or order hereunder to the
Attorney General or the district attorney of the county in which the
violation occurred, who may, with or without this type of a
reference, institute appropriate criminal proceedings under this law.
The commissioner and his or her counsel, deputies, or assistants
may, upon request of the Attorney General or the district attorney,
assist the prosecuting attorney in presenting the law or facts at the
trial.

25533.5. The commissioner shall send a copy of a desist and refrain
order issued under this law to the Attorney General and the district
attorney of the county in which the person who is the subject of the
order resides or maintains a principal place of business. There
shall be no liability on the part of, and no cause of action of any
nature shall arise against, the State of California, the department
and its employees, the commissioner, the members of the commissioner'
s staff, or the commissioner's authorized representatives for the
failure to provide to the Attorney General or the district attorney a
copy of the order as required by this section.

25534. Whenever any securities are issued which the commissioner
determines were offered or sold in violation of Section 25110, 25120,
or 25130, the commissioner may, by written order to the issuer and
notice to the holders of such securities, require certificates
evidencing such securities to have stamped or printed prominently on
their face a legend, in the form prescribed by rule of the
commissioner, restricting the transfer of such securities. Upon
receipt of the order, the issuer shall stamp or print such legend
prominently on the face of all outstanding certificates subject to
the order. If, after such order or notice has been given, a request
for a hearing is filed in writing by the person or persons to whom
such order or notice was addressed, a hearing shall be held in
accordance with the provisions of the Administrative Procedure Act,
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code, and the commissioner shall have all
the powers granted thereunder; unless such hearing is commenced
within 15 business days after the request for hearing is received by
the commissioner (or the person or persons affected and the issuer
consent to a later date), such order and notice are rescinded.

25535. (a) Any person who violates any provision of this law, or
who violates any rule or order under this law, shall be liable for a
civil penalty not to exceed twenty-five thousand dollars ($25,000)
for each violation, which shall be assessed and recovered in a civil
action brought in the name of the people of the State of California
by the commissioner in any court of competent jurisdiction.
(b) As applied to the penalties for acts in violation of this
division, the remedies provided by this section and by other sections
of this division are not exclusive, and may be sought and employed
in any combination to enforce the provisions of this division.
(c) No action shall be maintained to enforce any liability created
under subdivision (a) unless brought before the expiration of four
years after the act or transaction constituting the violation.

25536. (a) The commissioner may take such actions as are authorized
by Section 6d of the federal Commodity Exchange Act (7 U.S.C. Sec. 1
et seq.) as amended before or after the effective date of this
section.
(b) Nothing in this section shall be construed as a limitation on
the powers of the commissioner under this division or any other law
administered by the commissioner.