Ohio Code 1707.19 – Refusal, suspension, and revocation of license
(A)(1) An original license, or a renewal thereof, applied for by a dealer or salesperson of securities, or by an investment adviser, investment adviser representative, bureau of workers’ compensation chief investment officer, state retirement system investment officer, or portal operator as defined in section 1707.05 of the Revised Code may, except as provided in division (A)(2) of this section, be refused, and any such license granted may be suspended and, after notice and hearing in accordance with Chapter 119 of the Revised Code, may be revoked, by the division of securities, if the division determines that the applicant or the licensed dealer, salesperson, investment adviser, investment adviser representative, bureau of workers’ compensation chief investment officer, or state retirement system investment officer:
Terms Used In Ohio Code 1707.19
- Conviction: A judgement of guilt against a criminal defendant.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Dealer: except as otherwise provided in this chapter, means every person, other than a salesperson, who engages or professes to engage, in this state, for either all or part of the person's time, directly or indirectly, either in the business of the sale of securities for the person's own account, or in the business of the purchase or sale of securities for the account of others in the reasonable expectation of receiving a commission, fee, or other remuneration as a result of engaging in the purchase and sale of securities. See Ohio Code 1707.01
- Investment adviser: means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as a part of regular business, issues or promulgates analyses or reports concerning securities. See Ohio Code 1707.01
- Investment adviser representative: means a supervised person of an investment adviser, provided that the supervised person has more than five clients who are natural persons other than excepted persons defined in division (EE) of this section, and that more than ten per cent of the supervised person's clients are natural persons other than excepted persons defined in division (EE) of this section. See Ohio Code 1707.01
- Licensed dealer: means a dealer licensed under this chapter. See Ohio Code 1707.01
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Purchase: means any act by which a purchase is made. See Ohio Code 1707.01
- salesperson: means every natural person, other than a dealer, who is employed, authorized, or appointed by a dealer to sell securities within this state. See Ohio Code 1707.01
- State: means any state of the United States, any territory or possession of the United States, the District of Columbia, and any province of Canada. See Ohio Code 1707.01
- State retirement system: means the public employees retirement system, Ohio police and fire pension fund, state teachers retirement system, school employees retirement system, and state highway patrol retirement system. See Ohio Code 1707.01
- State retirement system investment officer: means an individual employed by a state retirement system as a chief investment officer, assistant investment officer, or the person in charge of a class of assets or in a position that is substantially equivalent to chief investment officer, assistant investment officer, or person in charge of a class of assets. See Ohio Code 1707.01
(a) Is not of good business repute;
(b) Is conducting an illegitimate or fraudulent business;
(c) Is, in the case of a dealer, investment adviser, or portal operator, insolvent;
(d) Has knowingly violated any provision of sections 1707.01 to 1707.50 of the Revised Code, or any regulation or order made thereunder;
(e) Has knowingly made a false statement of a material fact or an omission of a material fact in an application for a license, in a description or application that has been filed, or in any statement made to the division under such sections;
(f) Has refused to comply with any lawful order or requirement of the division under section 1707.23 of the Revised Code;
(g) Has been guilty of any fraudulent act in connection with the sale of any securities or in connection with acting as an investment adviser, investment adviser representative, bureau of workers’ compensation chief investment officer, state retirement system investment officer, or portal operator;
(h) Conducts business in purchasing or selling securities at such variations from the existing market as in the light of all the circumstances are unconscionable;
(i) Conducts business in violation of such rules and regulations as the division prescribes for the protection of investors, clients, or prospective clients;
(j) Has failed to furnish to the division any information with respect to the purchases or sales of securities within this state that may be reasonably requested by the division as pertinent to the protection of investors in this state.
(k) Has failed to furnish to the division any information with respect to acting as an investment adviser, investment adviser representative, bureau of workers’ compensation chief investment officer, state retirement system investment officer, or portal operator within this state that may be reasonably requested by the division.
(2) The division of securities shall not refuse to issue an original license to an applicant under division (A)(1) of this section because of a criminal conviction unless the refusal is in accordance with section 9.79 of the Revised Code.
(B) For the protection of investors the division may prescribe reasonable rules defining fraudulent, evasive, deceptive, or grossly unfair practices or devices in the purchase or sale of securities.
(C) For the protection of investors, clients, or prospective clients, the division may prescribe reasonable rules regarding the acts and practices of an investment adviser or an investment adviser representative.
(D) For the protection of investors, the division may prescribe reasonable rules regarding the acts and practices of a portal operator.
(E) Pending any investigation or hearing provided for in sections 1707.01 to 1707.50 of the Revised Code, the division may order the suspension of any dealer’s, salesperson’s, investment adviser’s, investment adviser representative’s, bureau of workers’ compensation chief investment officer’s, state retirement system investment officer’s, or portal operator’s license by notifying the party concerned of such suspension and the cause for it. If it is a salesperson whose license is suspended, the division shall also notify the dealer employing the salesperson. If it is an investment adviser representative whose license is suspended, the division also shall notify the investment adviser with whom the investment adviser representative is employed or associated. If it is a state retirement system investment officer whose license is suspended, the division shall also notify the state retirement system with whom the state retirement system investment officer is employed. If it is a bureau of workers’ compensation chief investment officer whose license is suspended, the division shall also notify the bureau of workers’ compensation.
(F)(1) The suspension or revocation of the dealer’s license suspends the licenses of all the dealer’s salespersons.
(2) The suspension or revocation of the investment adviser’s license suspends the licenses of all the investment adviser’s investment adviser representatives. The suspension or revocation of an investment adviser’s registration under section 203 of the “Investment Advisers Act of 1940,” 15 U.S.C. §§ 80b-3, suspends the licenses of all the investment adviser’s investment adviser representatives.
(G) It is sufficient cause for refusal, revocation, or suspension of the license in case of a partnership, partnership association, corporation, or unincorporated association if any general partner of the partnership, manager of the partnership association, or executive officer of the corporation or unincorporated association is not of good business repute or has been guilty of any act or omission which would be cause for refusing or revoking the license of an individual dealer, salesperson, investment adviser, investment adviser representative, or portal operator.
The Legislative Service Commission presents the text of this section as a composite of the section as amended by multiple acts of the General Assembly. This presentation recognizes the principle stated in R.C. 1.52(B) that amendments are to be harmonized if reasonably capable of simultaneous operation.
Last updated October 9, 2021 at 5:24 AM