NASAA Series 63Regulation of Broker-Dealers and AgentsHard
An Administrator in State Z has grounds to believe that a registered agent has engaged in multiple instances of fraudulent behavior. Before revoking the agent's registration, what is the Administrator legally required to provide?
- ANotice, opportunity for a hearing, and written findings of fact and conclusions of law.
- BA 90-day waiting period for the agent to correct the behavior.
- CA monetary fine as a first step, followed by revocation if the behavior continues.
- DA public announcement of the pending revocation.
Show answer & explanationAnswer & explanation
Correct answer: A. Notice, opportunity for a hearing, and written findings of fact and conclusions of law.
Under the Uniform Securities Act, an Administrator cannot summarily revoke a registration without providing due process. This includes giving the agent proper notice, an opportunity for a hearing, and then issuing written findings of fact and conclusions of law to justify the final decision.
Why the other options are wrong
- B. A waiting period for correction is not a mandatory pre-revocation step for fraudulent behavior.
- C. A monetary fine may be imposed, but it is not a mandatory first step before revocation, especially for fraud.
- D. A public announcement is not a prerequisite for revocation; due process for the agent is.
Administrator's Due Process (Revocation)
Before revoking a registration, the Administrator must provide the registrant with notice, an opportunity for a hearing, and subsequently issue written findings of fact and conclusions of law.
- Required for any disciplinary action (e.g., revocation, suspension, bar).
- Ensures fairness and legal compliance.
- Notice must inform the registrant of the charges.
- Hearing allows the registrant to present their case.
- Written findings provide a clear basis for the decision.
Memory trick: Notice, Hear, Write: The Administrator's fair fight.