Indiana Code 23-2-2.5-14. Stop orders; descriptions of charges
(1) there has been a failure to comply with this chapter or the rules or orders of the commissioner pertaining to this chapter;
Terms Used In Indiana Code 23-2-2.5-14
- Commissioner: means the Indiana securities commissioner under IC 23-19-6-1(a). See Indiana Code 23-2-2.5-1
- deceit: includes any misrepresentation in any manner of a material fact, any promise or representation or prediction as to the future not made honestly or in good faith, or the failure or omission to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not misleading. See Indiana Code 23-2-2.5-1
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Embezzlement: In most states, embezzlement is defined as theft/larceny of assets (money or property) by a person in a position of trust or responsibility over those assets. Embezzlement typically occurs in the employment and corporate settings. Source: OCC
- Franchise: includes a contract whereby the franchisee is granted the right to sell franchises on behalf of the franchisor. See Indiana Code 23-2-2.5-1
- Franchisor: means a person who grants a franchise. See Indiana Code 23-2-2.5-1
- Fraud: Intentional deception resulting in injury to another.
- Judgment: means all final orders, decrees, and determinations in an action and all orders upon which executions may issue. See Indiana Code 1-1-4-5
- Nolo contendere: No contest-has the same effect as a plea of guilty, as far as the criminal sentence is concerned, but may not be considered as an admission of guilt for any other purpose.
- Property: includes personal and real property. See Indiana Code 1-1-4-5
- State: includes a territory or possession of the United States, the District of Columbia, and Puerto Rico. See Indiana Code 23-2-2.5-1
- Statute: A law passed by a legislature.
- Year: means a calendar year, unless otherwise expressed. See Indiana Code 1-1-4-5
(3) the franchisor has failed to comply with any rule promulgated or order issued pursuant to section 12 of this chapter; or
(4) the franchisor, or the franchisor’s predecessor, or any of the franchisor’s directors, trustees, general partners, chief executives, financial officers, accounting officers, franchise sales officers, or other principal officers, or, if the franchisor is a limited liability company, any member or manager of the franchisor:
(A) during the ten (10) year period immediately preceding the date of registration, has:
(i) been convicted of a felony;
(ii) pleaded nolo contendere to a felony charge; or
(iii) been held liable in a civil action by final judgment;
if the felony or civil action involved fraud, embezzlement, misappropriation of property, or the violation of any state or federal statute involving the offer or sale of securities or franchises;
(B) is subject to any currently effective order affecting the franchise resulting from a proceeding or pending action brought by any individual or public agency or department;
(C) is a defendant in any pending criminal or material civil proceeding;
(D) during the ten (10) year period immediately preceding the date of registration, has been the defendant against whom a final judgment was entered in any material civil action; or
(E) is the franchisor or a principal executive officer or general partner of the franchisor and has, during the ten (10) year period immediately preceding the date of registration, reorganized due to insolvency or been adjudicated as a bankrupt.
(b) An order issued under this section based on a finding by the commissioner under subsection (a)(4)(A) must include a description of the charge, violation, or judgment referred to in subsection (a)(4)(A). An order issued under this section based on a finding by the commissioner under subsection (a)(4)(B) must include a copy of the order referred to in subsection (a)(4)(B). An order issued under this section based on a finding by the commissioner under subsection (a)(4)(D) must include a description of the judgment referred to in subsection (a)(4)(D). An order issued under this section based on a finding by the commissioner under subsection (a)(4)(E) must include a description of the insolvency or adjudication referred to in subsection (a)(4)(E).
(c) Before issuing a stop order under subsection (a)(4), such an order must be based on a finding by the commissioner that involvement of a person referred to in subsection (a)(4) creates an unreasonable risk to prospective franchisees.
Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.6; P.L.30-2002, SEC.1; P.L.1-2003, SEC.73.