NASAA Series 63Regulation of Broker-Dealers and AgentsEasy
A state securities Administrator believes that a registered agent has engaged in fraudulent activities. Before issuing a final order to revoke the agent's registration, what is the Administrator legally required to provide?
- AA public announcement of the alleged fraud.
- BNotice, opportunity for a hearing, and written findings of fact and conclusions of law.
- CA civil penalty assessment and a settlement offer.
- DA cease and desist order and immediate suspension.
Show answer & explanationAnswer & explanation
Correct answer: B. Notice, opportunity for a hearing, and written findings of fact and conclusions of law.
Before taking disciplinary action such as revocation, the Uniform Securities Act requires the Administrator to provide due process: proper notice, an opportunity for the individual to be heard, and a written explanation of the decision.
Why the other options are wrong
- A. Public announcements typically follow disciplinary actions, not precede the due process.
- C. These are potential consequences or resolutions that might occur after or in conjunction with due process, not prerequisites to it.
- D. A cease and desist order might be issued, but it doesn't replace the requirement for a hearing before a final revocation.
Administrator Due Process
Before issuing a final order to deny, suspend, or revoke a registration, the Administrator must provide notice, an opportunity for a hearing, and written findings of fact and conclusions of law.
- Applies to all disciplinary actions.
- Ensures fairness and legal compliance.
- Includes notice, hearing, and written justification.
Memory trick: For 'Disciplinary Action', the Administrator must 'Notice, Hear, and Write'.