§ 30609 Securities Depository Discipline

Key Takeaways

•If you break the rules while working with a securities depository (a place that holds stocks and bonds), you can be punished. This includes being told off, suspended for up to a year, or even banned from working in that field.
•You can be punished if you did something wrong on purpose, should have known it was wrong, caused big problems for the depository, or hurt the public.
•If you’ve been found guilty of a crime involving lying, cheating, or stealing, or if a court decided you did something dishonest related to this kind of work, you can also be punished.
•If you get a notice that you’re in trouble, you have 15 days to ask for a hearing to explain your side. If you don’t ask for one, you lose the right to have a hearing.
•Once you get the notice, you must stop doing any work that needs a license right away, even before the hearing.
•If you’re suspended or banned, you can’t work at or even be on the premises of a securities depository.

Example

Imagine you work at a place that holds people’s stocks and bonds. You know your friend is stealing money from accounts, but you don’t report it because they’re your friend.

Since you knew something wrong was happening and didn’t stop it, you could be suspended or even banned from working in this field. The law says you have to act honestly and report bad behavior.

(a) The commissioner may, after appropriate notice and opportunity for hearing, by order, censure or suspend for a period not exceeding 12 months, or bar from any position of employment, management, or control any person who operates a securities depository, or any other person, if the commissioner finds either of the following: (1) That the censure, suspension, or bar is in the public interest and that the person has committed or caused a violation of this division or rule or order of the commissioner, which violation was either known or should have been known by the person committing or causing it or has caused material damage to the securities depository, or to the public. (2) That the person has been convicted of or pleaded nolo contendere to any crime, or has been held liable in any civil action by final judgment, or any administrative judgment by any public agency, if that crime or civil or administrative judgment involved any offense involving dishonesty, fraud, or deceit, or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the business in accordance with the provisions of this division. (b) Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 4.5 (commencing with Section 11400) of Division 3 of Title 2 of the Government Code). Upon receipt of a request, the matter shall be set for hearing to commence within 30 days after such receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of such notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing. (c) Upon receipt of a notice of intention to issue an order pursuant to this section, the person who is the subject of the proposed order is immediately prohibited from engaging in any activities subject to licensure under the law. (d) Persons suspended or barred under this section are prohibited from participating in any business activity of a securities depository and from engaging in any business activity on the premises where a securities depository is conducting business. (Added by Stats. 2007, Ch. 101, Sec. 27. Effective January 1, 2008.)

Key Takeaways

•If you break the rules while working with a securities depository (a place that holds stocks and bonds), you can be punished. This includes being told off, suspended for up to a year, or even banned from working in that field.
•You can be punished if you did something wrong on purpose, should have known it was wrong, caused big problems for the depository, or hurt the public.
•If you’ve been found guilty of a crime involving lying, cheating, or stealing, or if a court decided you did something dishonest related to this kind of work, you can also be punished.
•If you get a notice that you’re in trouble, you have 15 days to ask for a hearing to explain your side. If you don’t ask for one, you lose the right to have a hearing.
•Once you get the notice, you must stop doing any work that needs a license right away, even before the hearing.
•If you’re suspended or banned, you can’t work at or even be on the premises of a securities depository.

Example

Imagine you work at a place that holds people’s stocks and bonds. You know your friend is stealing money from accounts, but you don’t report it because they’re your friend.

Since you knew something wrong was happening and didn’t stop it, you could be suspended or even banned from working in this field. The law says you have to act honestly and report bad behavior.

Key Takeaways

Example

Key Terms

References

§ 30609 Securities Depository Discipline

Key Takeaways

Example

Key Terms

References

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References