Administration and Judicial Review

Section 421-B:6-602

    421-B:6-602 Investigations and Subpoenas. –
(a) Authority to investigate. The secretary of state may:
(1) conduct public or private investigations within or outside of this state that the secretary of state considers necessary or appropriate to determine whether any person has violated, is violating, or is about to violate this chapter or an order issued under this chapter, or to aid in the enforcement of this chapter or in the adoption of forms under this chapter;
(2) require or permit a person to testify, file a statement, or produce a record, under oath or otherwise as the secretary of state determines, as to all the facts and circumstances concerning a matter to be investigated or about which an action or proceeding is to be commenced; and
(3) publish information concerning an action, proceeding, or an investigation under, or a violation of, this chapter or an order issued under this chapter if the secretary of state determines it is necessary or appropriate in the public interest and for the protection of investors.
(4) hold hearings, upon reasonable notice, in respect to any matter arising out of the administration of this chapter;
(5) conduct investigations and hold hearings for the purpose of compiling information with a view to recommending changes in this chapter to the legislature; and
(6) require a broker-dealer, agent, or issuer, subject to the limitations set forth in section 18 of the Securities Act of 1933, to report to the secretary of state all transactions as they pertain to any security. Such reports shall be made within 10 days after demand therefor by the secretary of state and shall be open for public inspection only upon a court order. The secretary of state shall not make known, in any manner not provided by law, any information contained in such reports.
(b) Secretary of state's powers to investigate. For the purpose of an investigation under this chapter, the secretary of state or a designated officer may administer oaths and affirmations, subpoena witnesses, seek compulsion of attendance, take evidence, require the filing of a statement, and require the production of any records that the secretary of state considers relevant or material to the investigation.
(c) Procedure and remedies for noncompliance. If a person fails to appear or refuses to testify, file a statement, produce records, or otherwise fails to obey a subpoena as required by the secretary of state under this chapter, the attorney general or the secretary of state may apply to the superior court or a court of another state to enforce compliance. The court may:
(1) hold the person in contempt;
(2) order the person to appear before the attorney general or secretary of state;
(3) order the person to testify about the matter under investigation or in question;
(4) order the production of records;
(5) grant injunctive relief, including restricting or prohibiting the offer or sale of securities or the providing of investment advice;
(6) order a civil penalty of not less than $2,500 for each violation; and
(7) grant any other necessary or appropriate relief.
(d) Assistance to securities regulator of another state. At the request of the securities regulator of another state or a foreign jurisdiction, the secretary of state may provide assistance if the requesting regulator states that it is conducting an investigation to determine whether a person has violated, is violating, or is about to violate a law or rule of the other state or foreign jurisdiction relating to securities matters which the requesting regulator administers or enforces. The secretary of state may provide the assistance by using the authority to investigate and the powers conferred by this section as the secretary of state determines is necessary or appropriate. The assistance may be provided without regard to whether the facts stated in the request would also constitute a violation of this chapter or other law of this state if occurring in this state. In deciding whether to provide the assistance, the secretary of state may consider whether the requesting regulator is permitted and has agreed to provide assistance reciprocally within its state or foreign jurisdiction to the secretary of state on securities matters when requested; whether compliance with the request would violate or prejudice the public policy of this state; and the availability of resources and employees of the secretary of state to carry out the request for assistance.

Source. 2015, 273:1, eff. Jan. 1, 2016.