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ACTIONS AGAINST AN ISSUER OF SECURITIES

The administrator may deny, revoke, or suspend the registration of a security if it deems it is in the public interest and:

• Any officer or director has been convicted of a securities crime.

• The registration statement is false, misleading, or incomplete.

• The security is subject to a court injunction.

• Promoter's fees or offering expenses are excessive or unreasonable.

• The offering is fraudulent.

The administrator may also revoke a security's exemption from registration if it is in the public interest and the exemption was based on a false, misleading, fraudulent, or unethical practice or statement. An administrator may, without prior notice, revoke the exempt status of a securities transaction.

RULE CHANGES

An administrator may change or amend rules as he or she deems necessary. All rules enacted by the administrator will have the same force and effect as rules enacted under the USA. An administrator's order may be appealed to the court system within 60 days. A rule enacted by the administrator applies to all registrants in the administrator's state.

ADMINISTRATIVE ORDERS

If the state securities administrator issues an order, that order will be enforced against a specific registrant or activity. For example, if a broker dealer was engaging in sales practices that violated the USA, the administrator may issue an order suspending that broker dealer's registration with the state for 60 days. Any affected party may challenge an administrator's order within 60 days of issuance by filing a written petition. During the time that the challenge is pending the order will remain in effect. If the administrator determines that the order is no longer required or a court determines that the order is no longer required the administrator's order will be vacated.

INTERPRETIVE OPINIONS

A person who is actively engaged in the securities business may from time to time seek the opinion of the state securities administrator to ensure that the business that he or she is conducting is in line with the rules of the USA as amended within the state. In response to the request, the administrator may issue an opinion regarding the activity, issue a no action letter, or elect not to issue an opinion. If the administrator issues an interpretive opinion, the administrator may charge a fee for the interpretation of its rules.

ADMINISTRATIVE RECORDS

The state securities administrator will maintain all records relating to the business of the state securities administrator and will make the records available upon request. The administrator will provide certified copies if specifically requested. The administrator may charge a reasonable fee for the production and delivery of the records. The records to be maintained include:

• All applications for broker dealer registration.

• All applications for investment adviser registration.

• All applications for agent registration for broker dealers and investment advisers.

• All applications for registrations of securities and registration statements.

• All orders, actions, and interpretive opinions entered.

• All written claims for exemptions from registration.

The records may be maintained electronically, on microfilm, or on any other device the administrator may elect.

 
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