Corporations Commissioner Powers

Corporations Code Title 4, Division 1, Part 6, Chapter 2 deals with the powers of the Corporations Commissioner in California.

Section 25530 provides that, whenever it appears to the commissioner that any person has engaged, is engaging, or is about to engage in any act or practice constituting a violation of any provision of this division or any rule or order, the commissioner may bring an action in the name of the people of the State of California in the superior court to enjoin the acts or practices or to enforce compliance with this law or any rule or order hereunder.

Upon a proper showing, a permanent or preliminary injunction, restraining order, or writ of mandate must be granted and a receiver, monitor, conservator, or other designated fiduciary or officer of the court may be appointed for the defendant or the defendant’s assets, or any other ancillary relief may be granted as appropriate.

In any case in which a defendant is ordered by the court to pay restitution to a victim, the court may in its order require the payment as a money judgment, which is to be enforceable by a victim as if the restitution order were a separate civil judgment, and enforceable in the same manner as is provided for the enforcement of any other money judgment.

Section 25530.1 allows the court to prohibit, conditionally or unconditionally, and permanently or for such period of time as it determines, any person who violated the law from acting as an officer or director of any issuer that has securities qualified.

Section 25531 authorizes the commissioner to make public or private investigations within or outside of this state as he deems necessary to determine whether any person has violated or is about to violate any provision of this law or any rule or order or to aid in the enforcement of this law or in the prescribing of rules and forms and may publish information concerning any violation of this law or any rule or order.

In making any investigation, the commissioner may, for a reasonable time not exceeding 30 days, take possession of the books, records, accounts and other papers pertaining to the business of any broker-dealer or investment adviser and place a keeper in exclusive charge of them in the place where they are usually kept.

Section 25532 states that, if, in the opinion of the commissioner, the sale of a security is subject to qualification under this law and it is being or has been offered or sold without first being qualified, the commissioner may order the issuer or offeror of the security to desist and refrain from the further offer or sale of the security until qualification has been made under this law.

If, in the opinion of the commissioner, a person has been or is acting as a broker-dealer or investment adviser, or has been or is engaging in broker-dealer or investment adviser activities, the commissioner may order that person to desist and refrain from the activity until the person has been appropriately licensed or the required filing has been made under this law.

Section 25533 authorizes the commissioner to refer any evidence available concerning any violation of this law or of any rule or order to the Attorney General or the district attorney of the county in which the violation occurred, who may, with or without this type of a reference, institute appropriate criminal proceedings under this law.

Section 25533.5 requires the commissioner to send a copy of a desist and refrain order issued under this law to the Attorney General and the district attorney of the county in which the person who is the subject of the order resides or maintains a principal place of business.

Section 25534 states that, whenever any securities are issued which the commissioner determines were offered or sold in violation of law, the commissioner may, by written order to the issuer and notice to the holders of the securities, require certificates evidencing the securities to have stamped or printed prominently on their face a legend, in the form prescribed by rule of the commissioner, restricting the transfer of such securities.

Section 25535 provides that any person who violates any provision of this law, or who violates any rule or order under this law, is liable for a civil penalty not to exceed $25,000 for each violation, which is assessed and recovered in a civil action brought in the name of the people of the State of California by the commissioner in any court of competent jurisdiction.

Section 25536 allows the commissioner to take actions that are authorized by federal law. Nothing in this section is to be construed as a limitation on the powers of the commissioner.