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HomeCorporations CodeCh. 11§ 28704 Cease And Desist Orders

§ 28704 Cease And Desist Orders

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 28704 Cease And Desist Orders

Key Takeaways

  • •The boss (commissioner) can tell a company or person to stop doing something bad if it might cause big money problems or hurt the company or its investors.
  • •If the boss tells you to stop, you can ask for a meeting within 30 days to explain your side, but you still have to stop while waiting for the meeting.
  • •If the boss doesn’t start the meeting within 15 workdays (or a longer time if you agree), the stop order goes away.
  • •You can still ask a judge to look at the order even if you didn’t ask the boss for a meeting.

Example

A bank is giving out too many risky loans, and it looks like they might run out of money soon.

The boss can tell the bank to stop giving out those loans right away because it could hurt the bank and the people who invested money in it. The bank can ask for a meeting to explain why they should keep giving loans, but they have to stop until the boss decides.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 28704 Cease And Desist Orders

(a) The commissioner may issue a cease and desist order, including an order to take appropriate corrective action, if the commissioner finds both of the following: (1) That any of the factors set forth in Section 28703 is true with respect to any licensee or any subject person of a licensee. (2) That the action or violation is likely to cause the insolvency of, or substantial dissipation of the assets or earnings of, the licensee, or is likely to seriously weaken the condition of the licensee or otherwise to seriously prejudice the interests of the licensee or the accredited investors of the licensee, prior to the completion of proceedings conducted pursuant to Section 28703. (b) (1) Within 30 days after an order is issued pursuant to subdivision (a), any licensee or subject person of a licensee to whom the order is directed may file with the commissioner an application for a hearing on the order. The filing of an application for a hearing shall not stay the effectiveness of the order. If the commissioner fails to commence a hearing within 15 business days after the application is filed (or within any longer period to which the licensee or subject person consents), the order shall be deemed rescinded. Upon the completion of the hearing, the commissioner shall affirm, modify, or rescind the order. (2) The right of any licensee or subject person of a licensee to whom an order is issued under subdivision (a) to petition for judicial review of the order shall not be affected by the failure of the licensee or subject person to apply to the commissioner for a hearing on the order pursuant to paragraph (1). (Added by Stats. 1998, Ch. 668, Sec. 3. Effective January 1, 1999. Operative July 1, 1999, by Sec. 4 of Ch. 668.)

Last verified: January 23, 2026

Key Terms

cease and desist orderlicenseesubject personSection 28703insolvencysubstantial dissipationaccredited investors

Related Statutes

  • § 28703 Cease And Desist Orders
  • § 28705 Removal Of Unfit Personnel
  • § 28714 Commissioner Emergency Licensee Takeover
  • § 28700 Licensee Affiliate Definitions
  • § 28706 Removal For Financial Misconduct

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 28704.
View Official Source