NASAA Series 63Remedies and Administrative ProvisionsMedium
The Administrator believes an agent is about to commit a violation of the Uniform Securities Act and wants to stop the conduct immediately. Which action may the Administrator take without first providing notice and an opportunity for a hearing?
- AIssue a summary cease-and-desist order
- BOrder the agent to pay restitution to injured investors
- CImpose a criminal fine on the agent
- DPermanently revoke the agent's registration
Show answer & explanationAnswer & explanation
Correct answer: A. Issue a summary cease-and-desist order
The Administrator may issue a cease-and-desist order summarily, without a prior hearing, when the public interest requires immediate action, but must promptly give the respondent an opportunity for a hearing afterward if requested. Permanent revocation, criminal fines, and restitution generally require due process or court involvement.
Why the other options are wrong
- B. Restitution orders generally require a hearing or court order, not summary action.
- C. Criminal fines can only be imposed by a court after conviction.
- D. Permanent revocation typically requires prior notice and hearing rights.
Summary Cease-and-Desist Order
An order the Administrator can issue immediately, without prior hearing, to stop an ongoing or imminent violation, subject to a later hearing upon request.
- Designed for urgent public-interest situations.
- Respondent may request a hearing after the order is issued.
- Distinct from permanent revocation, which requires due process first.
Memory trick: 'Stop first, talk later — cease and desist now, hearing next.'