History: P.A. 85-169 amended Subsec. (a) to permit records to be stored on microfilm, microfiche or other electronic
data processing system; Sec. 36-482 transferred to Sec. 36b-14 in 1995; P.A. 97-220 amended Subsec, (a) to delete three-year record retention period and require retention of records for period prescribed by regulation, effective July 1, 1997;
P.A. 98-162 amended Subsec. (a) by designating existing provisions as Subdivs. (1) and (3), by adding new Subdiv. (2)
re record requirements for registered broker-dealers and investment advisers registered with the Securities and Exchange
Commission or excepted from the federal definition of investment adviser, and by making technical changes, amended
Subsec. (b) by designating existing provisions as Subdiv. (1) and adding new Subdiv. (2) re financial reports of registered
broker-dealers and investment advisers registered with the Securities and Exchange Commission or excepted from the
federal definition of investment adviser, made technical changes in Subsec. (c), and amended Subsec. (d) by adding
provisions re examination and copying of records of registered broker-dealers and investment advisers and making technical
changes; P.A. 05-177 amended Subsec. (a)(1) to require that the regulations be adopted in accordance with chapter 54 and
to authorize commissioner to prescribe requirements by order, amended Subsec. (a)(3) to allow broker-dealer records
required under Subdiv. (2) to be maintained in any form of data storage acceptable under Sec. 17(a) of the Securities and
Exchange Act of 1934 if readily accessible to commissioner and to allow required investment adviser records to be stored
under Subdiv., amended Subsec. (b)(2) to insert "subject to Section 15(h) of the Securities Exchange Act of 1934," and
to make a technical change, amended Subsec. (d) to substitute "self-regulatory organization" for "national securities exchange or national securities association registered under the Securities Exchange Act of 1934", and added Subsec. (e) re
custody of funds or securities of a customer or client.
Sec. 36b-15. (Formerly Sec. 36-484). Denial, suspension or revocation of registration by commissioner. Withdrawal from registration or of application. (a) The
commissioner may, by order, deny, suspend or revoke any registration or, by order,
restrict or impose conditions on the securities or investment advisory activities that an
applicant or registrant may perform in this state if the commissioner finds that (1) the
order is in the public interest, and (2) the applicant or registrant or, in the case of a broker-dealer or investment adviser, any partner, officer, or director, any person occupying
a similar status or performing similar functions, or any person directly or indirectly
controlling the broker-dealer or investment adviser: (A) Has filed an application for
registration which as of its effective date, or as of any date after filing in the case of an
order denying effectiveness, was incomplete in any material respect or contained any
statement which was, in light of the circumstances under which it was made, false or
misleading with respect to any material fact; (B) has wilfully violated or wilfully failed
to comply with any provision of sections 36b-2 to 36b-33, inclusive, or a predecessor
statute or any regulation or order under said sections or a predecessor statute; (C) has
been convicted, within the past ten years, of any misdemeanor involving a security, any
aspect of the securities business, or any felony, provided any denial, suspension or
revocation of such registration shall be in accordance with the provisions of section 46a-80; (D) is permanently or temporarily enjoined by any court of competent jurisdiction
from engaging in or continuing any conduct or practice involving any aspect of the
securities or commodities business; (E) is the subject of a cease and desist order of
the commissioner or an order of the commissioner denying, suspending, or revoking
registration as a broker-dealer, agent, investment adviser or investment adviser agent;
(F) is the subject of any of the following sanctions that are currently effective or were
imposed within the past ten years: (i) An order issued by the securities administrator
of any other state, Canadian province or territory, or by the Securities and Exchange
Commission or the Commodity Futures Trading Commission denying, suspending or
revoking registration as a broker-dealer, agent, investment adviser, investment adviser
agent or a person required to be registered under the Commodity Exchange Act, 7 USC
1 et seq., as from time to time amended, and the rules and regulations thereunder, or the
substantial equivalent of those terms, as defined in sections 36b-2 to 36b-33, inclusive,
(ii) an order of the Securities and Exchange Commission or Commodity Futures Trading
Commission suspending or expelling such applicant, registrant or person from a national
securities or commodities exchange or national securities or commodities association
registered under the Securities Exchange Act of 1934 or the Commodity Exchange Act,
7 USC 1 et seq., as from time to time amended, or, in the case of an individual, an order
of the Securities and Exchange Commission or an equivalent order of the Commodity
Futures Trading Commission barring such individual from association with a broker-dealer or an investment adviser, (iii) a suspension, expulsion or other sanction issued
by a national securities exchange or other self-regulatory organization registered under
federal laws administered by the Securities and Exchange Commission or the Commodity Futures Trading Commission if the effect of the sanction has not been stayed or
overturned by appeal or otherwise, (iv) a United States Post Office fraud order, or (v)
a cease and desist order entered by the Securities and Exchange Commission, a self-regulatory organization or the securities agency or administrator of any other state or
Canadian province or territory; but the commissioner may not (I) institute a revocation
or suspension proceeding under this subparagraph more than five years from the date
of the sanction relied on, and (II) enter an order under this subparagraph on the basis
of an order under any other state act unless that order was based on facts which would
constitute a ground for an order under this section; (G) may be denied registration under
federal law as a broker-dealer, agent, investment adviser, investment adviser agent or
as a person required to be registered under the Commodity Exchange Act, 7 USC 1 et
seq., as from time to time amended, and the rules and regulations promulgated thereunder, or the substantial equivalent of those terms as defined in sections 36b-2 to 36b-33,
inclusive; (H) has engaged in fraudulent, dishonest or unethical practices in the securities
or commodities business, including abusive sales practices in the business dealings of
such applicant, registrant or person with current or prospective customers or clients; (I)
is insolvent, either in the sense that the liabilities of such applicant, registrant or person
exceed the assets of such applicant, registrant or person, or in the sense that such applicant, registrant or person cannot meet the obligations of such applicant, registrant or
person as they mature; but the commissioner may not enter an order against a broker-dealer or investment adviser under this subparagraph without a finding of insolvency
as to the broker-dealer or investment adviser; (J) is not qualified on the basis of such
factors as training, experience, and knowledge of the securities business, except as otherwise provided in subsection (b) of this section; (K) has failed reasonably to supervise:
(i) The agents or investment adviser agents of such applicant or registrant, if the applicant
or registrant is a broker-dealer or investment adviser; or (ii) the agents of a broker-dealer
or investment adviser agents of an investment adviser, if such applicant, registrant or
other person is or was an agent, investment adviser agent or other person charged with
exercising supervisory authority on behalf of a broker-dealer or investment adviser;
(L) in connection with any investigation conducted pursuant to section 36b-26 or any
examination under subsection (d) of section 36b-14, has made any material misrepresentation to the commissioner or upon request made by the commissioner, has withheld or
concealed material information from, or refused to furnish material information to the
commissioner, provided, there shall be a rebuttable presumption that any records, including, but not limited to, written, visual, audio, magnetic or electronic records, computer
printouts and software, and any other documents, that are withheld or concealed from
the commissioner in connection with any such investigation or examination are material,
unless such presumption is rebutted by substantial evidence; (M) has wilfully aided,
abetted, counseled, commanded, induced or procured a violation of any provision of
sections 36b-2 to 36b-33, inclusive, or a predecessor statute or any regulation or order
under such sections or a predecessor statute; or (N) has failed to pay the proper filing
fee; but the commissioner may enter only a denial order under this subparagraph, and
the commissioner shall vacate any such order when the deficiency has been corrected.
The commissioner may not institute a suspension or revocation proceeding on the basis
of a fact or transaction known to the commissioner when the registration became effective unless the proceeding is instituted within one hundred eighty days of the effective
date of such registration.
(b) The following provisions govern the application of subparagraph (J) of subdivision (2) of subsection (a) of this section: (1) The commissioner may not enter an order
against a broker-dealer on the basis of the lack of qualification of any person other than
(A) the broker-dealer if the broker-dealer is an individual, or (B) an agent of the broker-dealer; (2) the commissioner may not enter an order against an investment adviser on
the basis of the lack of qualification of any person other than (A) the investment adviser
if the investment adviser is an individual, or (B) any other person who represents the
investment adviser in doing any of the acts which make the investment adviser an investment adviser; (3) the commissioner may not enter an order solely on the basis of lack
of experience if the applicant or registrant is qualified by training or knowledge or both;
(4) the commissioner shall consider that an agent who will work under the supervision
of a registered broker-dealer need not have the same qualifications as a broker-dealer;
(5) the commissioner shall consider that an investment adviser is not necessarily qualified solely on the basis of experience as a broker-dealer or agent. When the commissioner
finds that an applicant for initial or renewal registration as a broker-dealer is not qualified
as an investment adviser, the commissioner may by order condition the applicant's
registration as a broker-dealer upon the applicant's not transacting business in this state
as an investment adviser; (6) the commissioner may by regulation provide for an examination, which may be written or oral or both, to be taken by any class of or all applicants,
as well as persons who represent or will represent an investment adviser in doing any
of the acts which make the investment adviser an investment adviser.
(c) The commissioner may by order summarily postpone or suspend registration
pending final determination of any proceeding under this section. Upon the entry of the
order, the commissioner shall promptly notify the applicant or registrant, as well as the
employer or prospective employer if the applicant or registrant is an agent or an investment adviser agent, that it has been entered and of the reasons therefor and that within
fifteen days after the receipt of a written request the matter will be set down for hearing.
If no hearing is requested and none is ordered by the commissioner, the order will remain
in effect until it is modified or vacated by the commissioner. If a hearing is requested
or ordered, the commissioner, after notice of and opportunity for hearing, may modify
or vacate the order or extend it until final determination.
(d) If the commissioner finds that any registrant or applicant for registration is no
longer in existence or has ceased to do business as a broker-dealer, agent, investment
adviser or investment adviser agent, or is subject to an adjudication of mental incompetence or to the control of a committee, conservator, or guardian, or cannot be located after
reasonable search, the commissioner may by order cancel the registration or application.
(e) (1) Withdrawal from registration as a broker-dealer, agent, investment adviser
or investment adviser agent, or withdrawal of an application for registration as a broker-dealer, agent, investment adviser or investment adviser agent, becomes effective ninety
days after receipt of an application to withdraw such registration or a notice of intent
to withdraw such application for registration or within such shorter period of time as
the commissioner may determine, unless a denial, revocation or suspension proceeding
is pending when the application or notice is filed or a proceeding to deny, revoke, suspend
or impose conditions upon the withdrawal is instituted within ninety days after the
application or notice is filed. If a proceeding is pending or instituted, withdrawal becomes effective at such time and upon such conditions as the commissioner by order
determines. If no proceeding is pending or instituted and withdrawal automatically becomes effective, the commissioner may nevertheless institute a denial, revocation or
suspension proceeding under subsection (a) of this section within one year after withdrawal became effective.
(2) If the registration of a broker-dealer, agent, investment adviser or investment
adviser agent expires due to the registrant's failure to renew, within one year of such
expiration, the commissioner may nevertheless institute a revocation or suspension proceeding or issue an order suspending or revoking the registration under subsection (a)
of this section.
(f) No order may be entered under this section except as provided in subsection (c)
of this section without (1) appropriate prior notice to the applicant or registrant and
to the employer or prospective employer if such applicant or registrant is an agent or
investment adviser agent, (2) opportunity for hearing, and (3) written findings of fact
and conclusions of law.
(g) Notwithstanding the provisions of subsection (a) of this section, the commissioner may deny an application for registration as a broker-dealer, agent, investment
adviser, investment adviser agent or branch office if the applicant fails to respond to
any request for information required under sections 36b-2 to 36b-33, inclusive, or the
regulations adopted pursuant to said sections. The commissioner shall notify the applicant in writing that if such information is not submitted within sixty days the application
shall be deemed abandoned and denied. An application filing fee paid prior to the date
an application is denied pursuant to this subsection shall not be refunded. Denial of an
application pursuant to this subsection shall not preclude the applicant from submitting
a new application for registration under said sections. The hearing requirement provided
for in subsection (f) of this section shall not apply to the denial of an application issued
pursuant to this subsection.
(P.A. 77-482, S. 15; P.A. 80-88, S. 5, 12; P.A. 82-149, S. 6, 16; P.A. 87-375, S. 4; P.A. 88-208, S. 2; P.A. 89-220, S.
3, 4; P.A. 91-145, S. 4, 5; P.A. 94-178, S. 1; P.A. 96-192, S. 4; P.A. 99-38, S. 2; P.A. 01-48, S. 3; P.A. 03-19, S. 87; 03-259, S. 20; P.A. 04-45, S. 4; P.A. 05-177, S. 5.)
History: P.A. 80-88 added references to commodities, commodity futures trading commission and Commodity Exchange Act where appearing in Subsec. (a), inserted new Subdiv. (G) and relettered former Subdivs. (G) to (K) accordingly;
P.A. 82-149 made a technical correction to Subsec. (b); P.A. 87-375 amended Subsec. (a)(2)(E) by adding the reference
to a cease and desist order of the commissioner and added new Subsec. (g) re abandoned applications; P.A. 88-208 amended
Subsec. (a)(2)(F) by clarifying that in order for the commissioner to take any action, the sanctions must be currently
effective and been imposed within the past five years, added subparagraph designations throughout Subsec. (a), amended
Subsec. (a)(2)(F)(ii) re orders barring an individual from associations with a broker-dealer or an investment advisor,
added Subsec. (a)(2)(F)(iii) re sanctions issued by certain self-regulatory organizations, and amended Subsec. (a)(2)(L)
by extending the time period in which the commissioner may bring a suspension or revocation proceeding from thirty to
one hundred eighty days; P.A. 89-220 amended Subsec. (a) by adding Subpara. (L) re withholding or concealing information
from the commissioner and relettered the remaining subparagraph accordingly and amended Subsec. (e) by changing the
date a withdrawal from registration becomes effective from thirty to ninety days after receipt of the application and made
other technical changes; P.A. 91-145 amended Subsec. (a) to authorize the commissioner to deny, suspend or revoke
registration upon a finding that sanctions have been imposed on the applicant or registrant by the securities administrator
of a Canadian province or territory, added Subpara. (F)(v) re cease and desist orders entered by the Securities and Exchange
Commission or the securities agency or administrator of another state or Canadian province or territory to Subsec. (a)(23),
and amended Subpara. (K) of Subsec. (a)(2) by adding agents charged with exercising supervisory authority on behalf of
broker-dealers and amended Subsec. (g) to authorize the commissioner to deny applications for registration as a branch
office for failure to respond to requests for information; P.A. 94-178 authorized commissioner to "by order restrict or
impose conditions on the securities or investment advisory activities that an applicant or registrant may perform in this
state" in Subsec. (a); Sec. 36-484 transferred to Sec. 36b-15 in 1995; P.A. 96-192 amended Subsec. (e) by adding Subdiv.
(2) re commissioner's power to suspend or revoke expired registrations; P.A. 99-38 amended Subsec. (a) by adding provisions re rebuttable presumption in Subpara. (L) of Subdiv. (2); P.A. 01-48 amended Subsec. (e)(1) by adding provisions
re notice of intent to withdraw and withdrawal of an application for registration and denial of such withdrawal; P.A. 03-19 made a technical change in Subsec. (e)(1), effective May 12, 2003; P.A. 03-259 amended Subsec. (a) by substituting
"ten years" for "five years" in Subdiv. (2)(F), inserting "fraudulent" and ", including abusive sales practices in the business
dealings of such applicant, registrant or person with current or prospective customers or clients" in Subdiv. (2)(H) and
making technical changes; P.A. 04-45 amended Subsec. (a)(2)(G) to make a technical change, amended Subsec. (a)(2)(K)
to divide Subpara. into clauses (i) and (ii), in (i) making technical and organizational changes and in (ii) specifying failure
reasonably to supervise agents of broker-dealer or investment adviser agents of investment adviser, if applicant, registrant
or other person is or was an agent, investment adviser agent or other person charged with exercising supervisory authority
on behalf of broker-dealer or investment adviser, and amended Subsec. (b) to make technical changes; P.A. 05-177 amended
Subsec. (a)(2)(F)(v) to allow commissioner to deny, suspend or revoke any registration based on a cease and desist order
entered by a self-regulatory organization, amended Subsec. (a)(2) to add new Subpara. (M) allowing commissioner to
deny, suspend or revoke any registration for the wilful aiding, abetting, counseling, commanding, inducing or procuring
a violation of any provision of the Act or a predecessor statute or any regulation or order under the Act or such statute,
and to redesignate existing Subpara. (M) as Subpara. (N), and made technical changes throughout Subsec. (a).
Sec. 36b-21. (Formerly Sec. 36-490). Exemption of certain securities and
transactions. Denial or revocation of exemption. (a) The following securities are
exempted from sections 36b-16 and 36b-22: (1) Any security including a revenue obligation issued or guaranteed by the United States, any state, any political subdivision of a
state, or any agency or corporate or other instrumentality of one or more of the foregoing;
or any certificate of deposit for any of the foregoing; (2) any security issued or guaranteed
by Canada, any Canadian province, any political subdivision of any such province, any
agency or corporate or other instrumentality of one or more of the foregoing, or any
other foreign government with which the United States currently maintains diplomatic
relations, if the security is recognized as a valid obligation by the issuer or guarantor;
(3) any security that is not a "covered security" under Sections 3(a)(2) and 18(b)(4)(C)
of the Securities Act of 1933 and that is issued by and represents or will represent an
interest in or a debt of, or guaranteed by, any international banking institution, any bank,
savings bank or savings and loan association organized under the laws of the United
States, or any bank, savings institution or trust company organized and supervised under
the laws of any state; (4) any security issued by and representing or that will represent
an interest in or a debt of, or guaranteed by, any federal savings and loan association,
or any savings and loan or similar association organized under the laws of any state; (5)
any security issued by and representing an interest in or a debt of, or guaranteed by, any
insurance company organized under the laws of any state and authorized to do business
in this state; (6) any security issued or guaranteed by any federal credit union or any
credit union, industrial loan association or similar association organized and supervised
under the laws of this state; (7) any security issued or guaranteed by any railroad, other
common carrier, public utility or public utility holding company that is (A) regulated
with respect to its rates and charges by the United States or any state; (B) a public utility
holding company registered under the Public Utility Holding Company Act of 1935 or
a subsidiary of such a registered holding company within the meaning of said act; or
(C) regulated with respect to the issuance or guarantee of the security by the United
States, any state, Canada or any Canadian province or territory; (8) (A) any security
appearing on the list of over-the-counter and foreign securities approved for margin by
the Board of Governors of the Federal Reserve System which is not otherwise a covered
security, (B) any warrant or right to purchase or subscribe to any security described in
subparagraph (A) of this subdivision, and (C) any warrant or right to purchase or subscribe to any security listed or approved for listing upon notice of issuance on (i) the
New York Stock Exchange, the American Stock Exchange, the Chicago Board Options
Exchange and such other securities exchanges as may be designated by the commissioner from time to time, (ii) the list of over-the-counter securities approved for margin
by the Board of Governors of the Federal Reserve System where such security is a
covered security, or (iii) the national market system of the National Association of
Securities Dealers Automated Quotation System established pursuant to the Securities
Exchange Act of 1934; (9) any security issued by any person organized and operated
not for private profit but exclusively for religious, educational, benevolent, charitable,
fraternal, social, athletic or reformatory purposes, or as a chamber of commerce or trade
or professional association; (10) any commercial paper which arises out of a current
transaction or the proceeds of which have been or are to be used for current transactions,
and which evidences an obligation to pay cash within nine months of the date of issuance,
exclusive of days of grace, or any renewal of such paper which is likewise limited, or
any guarantee of such paper or of any such renewal; (11) any security issued in connection with an employees' stock purchase, stock option, savings, pension, profit-sharing or
similar benefit plan; (12) any security issued by any cooperative apartment corporation
incorporated under the laws of this state, located in and operating wholly within the
borders of this state, in conjunction with the execution of proprietary leases; (13) any
security issued by any person, organized and located in this state and operating exclusively for the purpose of promoting the industrial or commercial development of this
state, or such development of any political subdivision thereof or such development
of any regional planning area within this state, if such persons are approved by the
Commissioner of Economic and Community Development and such approval has been
certified, in writing, by said Commissioner of Economic and Community Development
to the commissioner; such approval and certification shall be conclusive as to the nature
and purpose of such person; (14) any security issued by the Connecticut Development
Credit Corporation; (15) any security issued by any nonstock corporation, which is
incorporated under the laws of this state as a cooperative marketing corporation and
has its principal place of business in this state, and which is a farmers' cooperative
organization, as defined in Section 521 of the Internal Revenue Code of 1986, or any
subsequent corresponding internal revenue code of the United States, as from time to
time amended, if such corporation has been certified, in writing, by the Connecticut
Department of Agriculture to the commissioner to be a bona fide cooperative marketing
corporation; such certification shall be conclusive as to the nature and purpose of such
corporation; (16) any security issued by all cooperative associations organized or existing under chapter 595; (17) any security issued by any person organized, located and
operating within or from the borders of this state, when selling or offering for sale an
interest in real estate limited partnerships or real estate syndications exclusively, if such
person has obtained a permit from the Real Estate Commission; (18) any security which,
prior to or within sixty days after October 1, 1977, has been sold or disposed of by the
issuer or bona fide offered to the public, but this exemption shall not apply to any new
offer of any such security by an issuer or underwriter subsequent to such sixty days;
(19) any interest or participation in any common trust fund or similar fund established
and maintained by a bank, or by one or more banks under common control as otherwise
authorized by general statute, exclusively for the collective investment and reinvestment
of assets contributed thereto by such bank in its fiduciary capacity; (20) any security
issued by a worker cooperative corporation formed under the provisions of sections 33-418f to 33-418o, inclusive; (21) an equipment trust certificate with respect to equipment
leased or conditionally sold to a person, if any security issued by the person would be
exempt under this section or would be a "covered security" under Section 18(b)(1) of the
Securities Act of 1933; and (22) any other security that the commissioner may exempt,
conditionally or unconditionally, on a finding that registration is not necessary or appropriate in the public interest or for the protection of investors.
(b) The following transactions are exempted from sections 36b-16 and 36b-22: (1)
Any isolated nonissuer transaction, whether effected through a broker-dealer or not; (2)
any nonissuer transaction by a registered agent of a registered broker-dealer in a security
of a class that has been outstanding in the hands of the public for at least ninety days
provided, at the time of the transaction: (A) The security is sold at a price reasonably
related to the current market price of the security; (B) the security does not constitute
the whole or part of an unsold allotment to, or a subscription or participation by, the
broker-dealer as an underwriter of the security; (C) a nationally recognized securities
manual contains (i) a description of the business and operations of the issuer; (ii) the
names of the issuer's officers and directors or, in the case of a non-United States issuer,
the corporate equivalents of such persons in the issuer's country of domicile; (iii) an
audited balance sheet of the issuer as of a date within eighteen months, or in the case
of a reorganization or merger where the parties to the reorganization or merger had such
audited balance sheet, a pro forma balance sheet; and (iv) an audited income statement
for each of the issuer's immediately preceding two fiscal years, or for the period of
existence of the issuer, if in existence for less than two years, or in the case of a reorganization or merger where the parties to the reorganization or merger had such audited
income statement, a pro forma income statement; and (D) the issuer of the security has
a class of equity securities listed on a national securities exchange registered under the
Securities Exchange Act of 1934, or designated for trading on the National Association
of Securities Dealers Automated Quotation System, unless the issuer, including any
predecessors of the issuer (i) has been engaged in continuous business for at least three
years or (ii) has total assets of at least two million dollars based on an audited balance
sheet of the issuer as of a date within eighteen months, or in the case of a reorganization
or merger where the parties to the reorganization or merger had such audited balance
sheet, a pro forma balance sheet. The exemption in this subdivision shall not be available
for any distribution of securities issued by a blank check company, shell company,
dormant company or any issuer that has been merged or consolidated with or has bought
out a blank check company, shell company or dormant company unless the issuer or
any predecessor has continuously operated its business for at least the preceding five
years and has had gross operating revenue in each of the preceding five years, including
gross operating revenue of at least five hundred thousand dollars per year in three of
the preceding five years; (3) any nonissuer distribution of an outstanding security if the
security has a fixed maturity or a fixed interest or dividend provision and there has been
no default during the current fiscal year or within the three preceding fiscal years, or
during the existence of the issuer and any predecessors if less than three years, in the
payment of principal, interest or dividends on the security; (4) any nonissuer transaction
effected by or through a registered broker-dealer pursuant to an unsolicited order or
offer to buy; but the commissioner may by regulation require that the customer acknowledge upon a specified form that the sale was unsolicited, and that a signed copy of
each such form be preserved by the broker-dealer for a specified period or that the
confirmation delivered to the purchaser or a memorandum delivered in connection therewith shall confirm that such purchase was unsolicited by the broker-dealer or any agent
of the broker-dealer; (5) any transaction between the issuer or other person on whose
behalf the offering is made and an underwriter, or among underwriters; (6) any transaction in a bond or other evidence of indebtedness secured by a real or chattel mortgage
or deed of trust or by an agreement for the sale of real estate or chattels, if the entire
mortgage, deed of trust or agreement, together with all the bonds or other evidences of
indebtedness secured thereby, is offered and sold as a unit; (7) any transaction by an
executor, administrator, state marshal, marshal, receiver, trustee in bankruptcy, creditors' committee in a proceeding under the Bankruptcy Act, guardian or conservator; (8)
any transaction executed by a bona fide pledgee without any purpose of evading sections
36b-2 to 36b-33, inclusive; (9) any offer or sale to a bank and trust company, a national
banking association, a savings bank, a savings and loan association, a federal savings
and loan association, a federal savings bank, a credit union, a federal credit union, trust
company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit-sharing trust, or other financial institution or institutional buyer, or to a broker-dealer, whether the purchaser is acting for itself or in some
fiduciary capacity; (10) (A) subject to the provisions of this subdivision, any transaction
not involving a public offering within the meaning of Section 4(2) of the Securities
Act of 1933, but not including any transaction specified in the rules and regulations
thereunder. (B) Subject to the provisions of this subdivision, any transaction made in
accordance with the uniform exemption from registration for small issuers authorized
in Section 19(d)(3)(C) of the Securities Act of 1933. (C) The exemptions set forth in
subparagraphs (A) and (B) of this subdivision shall not be available for transactions in
securities issued by any blank check company, shell company or dormant company.
(D) The exemptions set forth in subparagraphs (A) and (B) of this subdivision may,
with respect to any security or transaction or any type of security or transaction, be
modified, withdrawn, further conditioned or waived as to conditions, in whole or in
part, conditionally or unconditionally, by the commissioner, acting by regulation, rule
or order, on a finding that such regulation, rule or order is necessary or appropriate in
the public interest or for the protection of investors. (E) A nonrefundable fee of one
hundred fifty dollars shall accompany any filing made with the commissioner pursuant
to this subdivision; (11) any offer or sale of a preorganization certificate or subscription
if (A) no commission or other remuneration is paid or given directly or indirectly for
soliciting any prospective subscriber, (B) the number of subscribers does not exceed
ten, and (C) no payment is made by any subscriber; (12) any transaction pursuant to an
offer to existing security holders of the issuer, including persons who at the time of the
transaction are holders of convertible securities, nontransferable warrants or transferable
warrants exercisable within not more than ninety days of their issuance, if (A) no commission or other remuneration other than a standby commission is paid or given directly
or indirectly for soliciting any security holder in this state, or (B) the issuer first files
a notice, in such form and containing such information as the commissioner may by
regulation prescribe, specifying the terms of the offer and the commissioner does not
by order disallow the exemption within the next ten full business days; (13) any offer,
but not a sale, of a security for which registration statements have been filed under both
sections 36b-2 to 36b-33, inclusive, and the Securities Act of 1933, if no stop order or
refusal order is in effect and no public proceeding or examination looking toward such
an order is pending under either said sections or the Securities Act of 1933; (14) any
transaction exempt under Section 4(6) of the Securities Act of 1933, and the rules and
regulations thereunder. The issuer shall, prior to the first sale, file with the commissioner
a notice, in such form and containing such information as the commissioner may by
regulation, rule or order prescribe. A nonrefundable fee of one hundred fifty dollars
shall accompany any such filing made pursuant to this subdivision; (15) any transaction
if all the following conditions are satisfied: (A) The offer and sale is effectuated by the
issuer of the security; (B) the total number of purchasers of all securities of the issuer
does not exceed ten. A subsequent sale of securities that (i) is registered under sections
36b-2 to 36b-33, inclusive, (ii) is sold pursuant to an exemption under said sections
other than this subdivision, or (iii) involves covered securities, shall not be integrated
with a sale pursuant to this exemption in computing the number of purchasers hereunder.
For the purpose of this subdivision, each of the following is deemed to be a single
purchaser of a security: A husband and wife, a child and the parent or guardian of
such child when the parent or guardian holds the security for the benefit of the child, a
corporation, a partnership, an association or other unincorporated entity, a joint stock
company or a trust, but only if the corporation, partnership, association, unincorporated
entity, joint stock company or trust was not formed for the purpose of purchasing the
security; (C) no advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium, broadcast over television or radio or communicated by other electronic means or any other general solicitation is used in connection
with the sale; and (D) no commission, discount or other remuneration is paid or given
directly or indirectly in connection with the offer and sale, and the total expenses, excluding legal and accounting fees, in connection with the offer and sale do not exceed one
per cent of the total sales price of the securities. For purposes of this subdivision, a
difference in the purchase price among the purchasers shall not, in and of itself, be
deemed to constitute indirect remuneration; (16) any transaction exempt under Rule
701, 17 CFR Section 230.701 promulgated under Section 3(b) of the Securities Act of
1933; and (17) any other transaction that the commissioner may exempt, conditionally
or unconditionally, on a finding that registration is not necessary or appropriate in the
public interest or for the protection of investors.
(c) (1) Any person who offers or sells a security that is a covered security under
Section 18(b)(2) of the Securities Act of 1933 shall file with the commissioner, or with
any other depository that the commissioner may designate by regulation or order, a
notice for each series or portfolio prior to the initial offer of such security in this state,
provided such notice requirement does not apply to any offer or sale described in subdivision (9) or (12) of subsection (b) of this section. The notice shall contain such information
as the commissioner may require and shall be accompanied by a consent to service of
process as required by subsection (g) of section 36b-33 and a nonrefundable fee of five
hundred dollars; (2) any notice filed pursuant to this subsection relating to a security
issued by a face-amount certificate company or unit investment trust, as such terms are
defined in the Investment Company Act of 1940, shall be valid for a period of one year
from the date that such security is declared effective by the Securities and Exchange
Commission, without limitation as to the number of shares or aggregate amount. Such
notice may be renewed annually thereafter upon submission of such information as the
commissioner may require, not earlier than thirty days nor later than five days prior
to the date upon which such previously filed notice is due to expire, together with a
nonrefundable fee of five hundred dollars; (3) any notice filed pursuant to this subsection
relating to a redeemable security issued by an open-end management company, as defined in the Investment Company Act of 1940, shall be valid until December thirty-first
of the calendar year in which it was first filed, without limitation as to the number
of shares or aggregate amount. Such notice may be renewed annually thereafter upon
submission of such information as the commissioner may require together with a nonrefundable fee of five hundred dollars.
(d) Any person who offers or sells a security that is a covered security under Section
18(b)(3) of the Securities Act of 1933 shall file a consent to service of process with the
commissioner as required by subsection (g) of section 36b-33 prior to the first offer or
sale of such security in this state.
(e) Any person who offers or sells a security that is a covered security under Section
18(b)(4)(D) of the Securities Act of 1933 shall file a notice with the commissioner within
fifteen days after the first sale of such a security in this state. Such notice shall contain
such information as the commissioner may require and shall be accompanied by a consent to service of process as required by subsection (g) of section 36b-33 and a nonrefundable fee of one hundred fifty dollars.
(f) The commissioner may by order (1) deny or revoke any exemption specified in
subdivision (9) or (11) of subsection (a) of this section or in subsection (b) of this section
with respect to a specific security or transaction, (2) suspend the offer or sale of a covered
security in this state if any person who offers a covered security fails to comply with
any of the requirements set forth in subsections (c), (d) or (e) of this section, or (3)
require any person who offers a covered security in this state and refuses to pay any fee
required by subsections (c) or (e) of this section to register such security pursuant to
section 36b-16. For purposes of this subsection, a delay in the payment of a fee or
underpayment of a fee that is promptly remedied shall not constitute a refusal to pay
such fee. No such order may be entered without appropriate prior notice to all interested
parties, opportunity for hearing and written findings of fact and conclusions of law,
except that the commissioner may by order summarily deny or revoke any of the specified exemptions or summarily suspend the offer or sale of any covered security subject
to any of the requirements set forth in subsections (c), (d) or (e) of this section pending
final determination of any proceeding under this subsection. Upon the entry of a summary order, the commissioner shall promptly notify all interested parties that it has been
entered and of the reasons therefor and that within fifteen days of the receipt of a written
request the matter will be set down for hearing. If no hearing is requested and none is
ordered by the commissioner, the order will remain in effect until it is modified or
vacated by the commissioner. If a hearing is requested or ordered, the commissioner
after notice of, and opportunity for, hearing to all interested persons may modify or
vacate the order or extend it until final determination. No order under this subsection
may operate retroactively. No person may be considered to have violated sections 36b-16 and 36b-22 by reason of any offer or sale effected after the entry of an order under
this subsection if such person sustains the burden of proof that such person did not know,
and in the exercise of reasonable care could not have known, of the order.
(g) In any proceeding under sections 36b-2 to 36b-33, inclusive, the burden of proving an exemption, preemption, exclusion or an exception from a definition is upon the
person claiming it.
(P.A. 77-482, S. 22; 77-614, S. 284, 587, 610; P.A. 78-34, S. 6, 7, 17; 78-303, S. 85, 136; P.A. 79-396, S. 6, 11; P.A.
80-88, S. 6, 7, 12; P.A. 81-292, S. 10; P.A. 82-149, S. 12, 13, 16; P.A. 83-368, S. 8, 11; 83-587, S. 53, 96; P.A. 84-430,
S. 13, 14; 84-546, S. 91, 173; P.A. 85-169, S. 9, 11; P.A. 88-150, S. 6; 88-208, S. 3; P.A. 89-211, S. 42; P.A. 91-145, S.
6; P.A. 92-89, S. 12, 20; P.A. 93-157, S. 3, 4; P.A. 95-250, S. 1.; P.A. 96-192, S. 6; 96-211, S. 1, 5, 6; 96-222, S. 22, 41;
P.A. 97-220, S. 11, 15; P.A. 98-162, S. 6, 7; P.A. 99-38, S. 4; P.A. 00-99, S. 82, 154; P.A. 01-195, S. 24, 181; June 30 Sp.
Sess. P.A. 03-6, S. 146(f); P.A. 04-45, S. 5; 04-189, S. 1; P.A. 05-177, S. 6.)
History: P.A. 77-614 and P.A. 78-303 replaced commissioner of commerce with commissioner of economic development, effective January 1, 1979; P.A. 78-34 referred to securities exchanges designated by commission where previously
specific regional exchanges were listed in Subsec. (a)(8), deleted notice requirements in Subsec. (a)(11), rephrased Subsec.
(a)(17), substituted "offer" for "offering" in (a)(18), added (a)(19), included creditor's committees in Subsec. (b)(6),
clarified applicable banks and savings institutions in (b)(8), rewrote (b)(9) and replaced "securities not involving the issuer
of the securities, an affiliate of such issuer or an underwriter of the securities" with specified exempt securities in (b)(13);
P.A. 79-396 added reference to Securities Act in Subsec. (b)(12) and to rules and regulations under said act in (b)(13);
P.A. 80-88 substituted reference to Securities Act for detailed provisions re transactions in Subsec. (b)(9)(B); P.A. 81-292
amended Subsec. (a) by deleting in Subdiv. (3) "except for equity securities and debt securities subordinated to the deposits
of such banks, savings institutions or trust companies", deleting in Subdiv. (4) "except for equity securities and debt
securities subordinated to the deposits of such associations" and adding Subdiv. (20) allowing for exemption of any security
by the commissioner where registration is not necessary or appropriate; P.A. 82-149 amended Subdiv. (4) of Subsec. (a)
by deleting the requirement that an association organized under the laws of any state is "authorized to do business in this
state", amended Subdiv. (11) of Subsec. (a) by exempting from registration securities issued in connection with an employee
stock option plan, amended Subdiv. (9)(B) of Subsec. (b) by exempting certain transactions authorized by federal law,
amended Subdiv. (11) of Subsec. (b) by increasing from five to ten business days the period during which the commissioner
may disallow the exemption and by specifying that the commissioner may prescribe the form and content of the notice,
and inserted a new Subdiv. (14) exempting small transactions; P.A. 83-368 amended Subdiv. (9) of Subsec. (b) to establish
a twenty-five dollar filing fee for filings pursuant to Subdiv. (9) (C) of the subsection; P.A. 83-587 made technical change
in Subsec. (a)(1); P.A. 84-430 amended Subsec. (a) to include within the list of exemptions any security issued by a worker
cooperative corporation; P.A. 84-546 made technical change in Subsec. (a); P.A. 85-169 amended Subsec. (b) to make
technical changes; P.A. 88-150 amended Subsec. (b) by increasing the license fee to one hundred dollars; P.A. 88-208
made a technical change in Subsec. (a) (5) and amended Subsec. (a)(8) by adding the requirement re availability of quotations
and public trading having taken place prior to the offer or sale of the security; P.A. 89-211 clarified reference to the Internal
Revenue Code of 1986; P.A. 91-145 amended Subsec. (a) by adding securities listed on the Chicago Board Options
Exchange and securities designated as a national market system security to Subdiv. (8); P.A. 92-89 increased the filing
fee in Subdiv. (9) of Subsec. (b) from one hundred to one hundred fifty dollars; P.A. 93-157 amended Subsec. (b) by
excluding a blank check company, shell company, dormant company or any issuer that has been merged or consolidated
from certain allowable exemptions and made certain technical changes for accuracy, effective July 1, 1993; Sec. 36-490
transferred to Sec. 36b-21 in 1995; P.A. 95-250 and P.A. 96-211 replaced Commissioner and Department of Economic
Development with Commissioner and Department of Economic and Community Development; P.A. 96-192 deleted references to commissioner's acting "by regulation or order" and "by regulation, rule or order" in Subsecs. (a) and (b), respectively, and amended Subdiv. (b)(2) re issuers in operation at least five years with the required revenue; P.A. 96-222 amended
Subdiv. (7) of Subsec. (a) to insert "or its successor agency" after "Interstate Commerce Commission", effective July 1,
1996; P.A. 97-220 amended Subdiv. (8) of Subsec. (a) re warrants or rights to purchase or subscribe to certain listed
securities, amended Subdiv. (9)(A) of Subsec. (b) re exemption for transactions not involving a public offering under Sec.
4(2) of the Securities Act of 1933 and not specified in the rules and regulations thereunder, amended Subdiv. (13) of
Subsec. (b) by deleting references to Secs. 4(1) and 4(4) of the Securities Act of 1933, amended Subdiv. (14) of Subsec.
(b) to add exemption for transactions involving covered securities, added new Subsecs. (c), (d) and (e) re offer or sale of
covered securities, redesignated former Subsecs. (c) and (d) as Subsecs. (f) and (g), amended Subsec. (f) by adding provisions re covered securities and made technical changes, effective July 1, 1997; P.A. 98-162 amended Subdiv. (8) of Subsec.
(a) by adding new Subparas. (A) and (B) re over-the-counter and foreign securities approved for margin, and by designating
existing provisions as Subpara. (C) and adding provision re covered security and amended Subsec. (b) by adding new
provisions in Subdiv. (2) re nonissuer transactions by a registered agent of a registered broker-dealer in an outstanding
security, by designating new Subdiv. (3) re nonissuer distribution of an outstanding security, by redesignating existing
Subdivs. (3) to (14) as Subdivs. (4) to (15), by adding new Subdiv. (16) re transactions exempt under Rule 701, by
redesignating existing Subdiv. (15) as Subdiv. (17), and by making technical changes; P.A. 99-38 amended Subdiv. (2)
of Subsec. (b) by adding provision re non-United-States issuer in Subpara. (C)(ii), adding "immediately" in Subpara.
(C)(iv), and adding provisions re continuous business and total assets in Subpara. (D), and amended Subsec. (c) by adding
provisions in Subdiv. (1) re filing notice with depository designated by the commissioner and exception for offer or sale
described in Subdivs. (9) or (12) of Subsec. (b); P.A. 00-99 replaced reference to sheriff with state marshal in Subsec.
(b)(7), effective December 1, 2000; P.A. 01-195 made technical changes in Subsec. (b) (10) and (15), effective July 11,
2001; June 30 Sp. Sess. P.A. 03-6 replaced Department of Agriculture with Department of Agriculture and Consumer
Protection, effective July 1, 2004; P.A. 04-45 amended Subsec. (b) to make a technical change in Subdiv. (10)(B) and to
provide that the one-hundred-fifty-dollar fee be nonrefundable in Subdivs. (10)(E) and (14); P.A. 04-189 repealed Sec.
146 of June 30 Sp. Sess. P.A. 03-6, thereby reversing the merger of the Departments of Agriculture and Consumer Protection,
effective June 1, 2004; P.A. 05-177 amended Subsec. (a)(3) to exempt any security that is not a "covered security" under
Secs. 3(a)(2) and 18(b)(4)(C) of the Securities Act of 1933 that represents or will represent an interest in or a debt of, or
guaranteed by, any international banking institution, savings bank or savings and loan association, amended Subsec. (a)(4)
to insert "or that will represent", amended Subsec. (a)(7) to provide that exemption applies to any security issued or
guaranteed by any public utility holding company, in lieu of holding company, that is regulated with respect to its rates
and charges by the United States or any state, to make conforming changes and to insert "or territory", amended Subsec.
(a)(21) to insert new exemption re equipment trust certificate, redesignating existing Subdiv. (21) as Subdiv. (22), amended
Subsec. (b)(9) to insert "a federal savings bank", amended Subsec. (b)(15)(C) to include reference to communication by
other electronic means, amended Subsec. (g) to provide that burden of proving preemption or exclusion is upon the person
claiming it, and made technical changes.
Sec. 36b-22. (Formerly Sec. 36-491). Filing of material intended for distribution to prospective investors. The commissioner may, by regulation adopted, in accordance with chapter 54, or order, require the filing of any prospectus, pamphlet, circular,
form letter, advertisement or other sales literature or advertising communication addressed or intended for distribution to prospective investors, including clients or prospective clients of an investment adviser registered or required to be registered under
sections 36b-2 to 36b-33, inclusive, unless the security or transaction is (1) exempted
by subsection (a) or (b) of section 36b-21, except for transactions exempted by subdivision (13) of subsection (b) of said section 36b-21, or (2) a covered security.
(P.A. 77-482, S. 23; P.A. 79-396, S. 7, 11; P.A. 82-149, S. 14, 16; P.A. 97-220, S. 12, 15; P.A. 05-177, S. 7.)
History: P.A. 79-396 substituted Sec. "36-490" for "36-491"; P.A. 82-149 added "except for transactions exempted by
subdivision (12) of subsection (b) of said section"; Sec. 36-491 transferred to Sec. 36b-22 in 1995; P.A. 97-220 added
exception for a covered security, effective July 1, 1997; (Revisor's note: In 1999 a reference to "subdivision (12)" of
Subsec. (b) of Sec. 36b-21 was replaced editorially by the Revisors with "subdivision (13)" pursuant to changes to Sec.
36b-21 enacted by P.A. 98-162); P.A. 05-177 required that regulation be adopted in accordance with chapter 54, provided
that filings of literature and advertising communications addressed or intended for prospective clients apply to investment
advisers registered or required to be registered under Secs. 36b-2 to 36b-33, inclusive, and made technical changes.
Sec. 36b-22a. Investment advisers and investment adviser agents to provide
schedule of charges, fees and penalties to clients. Each investment adviser required
to register under section 36b-6 or investment adviser agent, as defined in section 36b-3, except an investment adviser representative, as defined in Securities and Exchange
Commission Rule 203A-3, 17 CFR 275.203A-3, shall provide to each customer or client,
upon request, a schedule of any charges, fees or penalties imposed on a customer or
client for the acquisition, transfer or holding of securities. Such schedule shall fully
disclose any variance, advantage or economy of volume purchases to be realized by the
customer or client.
(P.A. 05-111, S. 1.)
Sec. 36b-23. (Formerly Sec. 36-492). False or misleading statements or omissions prohibited. No person shall make or cause to be made orally or in any document
filed with the commissioner or in any proceeding, investigation or examination under
sections 36b-2 to 36b-33, inclusive, any statement that is, at the time and in the light of
the circumstances under which it is made, false or misleading in any material respect
or, in connection with the statement, omit to state a material fact necessary to make the
statement made, in the light of the circumstances under which it was made, not false or
misleading.
(P.A. 77-482, S. 24; P.A. 99-38, S. 5; P.A. 00-61, S. 5, 9; P.A. 05-177, S. 8.)
History: Sec. 36-492 transferred to Sec. 36b-23 in 1995; P.A. 99-38 added "investigation or examination"; P.A. 00-61
prohibited false or misleading oral statements, effective July 1, 2000; P.A. 05-177 prohibited any person, in connection
with a statement made to commissioner, from omitting to state a material fact necessary to make the statement made not
false or misleading, and made a technical change.
Sec. 36b-26. (Formerly Sec. 36-495). Investigative powers of commissioner.
(a) The commissioner may, subject to the provisions of the Freedom of Information
Act, as defined in section 1-200: (1) Make such public or private investigations within
or outside of this state as the commissioner deems necessary to determine whether any
person has violated, is violating or is about to violate any provision of sections 36b-2
to 36b-33, inclusive, or any regulation or order thereunder, or to aid in the enforcement
of said sections or in the prescribing of rules and forms thereunder, (2) require or permit
any person to testify, produce a record or file a statement in writing, under oath or
otherwise as the commissioner determines, as to all the facts and circumstances concerning the matter to be investigated or about which an action or proceeding is to be instituted,
and (3) publish information concerning any violation of said sections or any regulation
or order thereunder.
(b) For the purpose of any investigation or proceeding under sections 36b-2 to 36b-33, inclusive, the commissioner or any officer designated by him may administer oaths
and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements,
or other documents or records which the commissioner deems relevant or material to
the inquiry. The commissioner may also issue subpoenas and subpoenas duces tecum
in this state at the request of another state if the activities concerning which the information is sought would constitute a basis for an investigation or proceeding under said
sections had such activities occurred in this state.
(c) In case of contumacy by, or refusal to obey a subpoena issued to, any person,
the superior court for the judicial district of Hartford, upon application by the commissioner, may issue to the person an order requiring him to appear before the commissioner,
or the officer designated by him there to produce documentary evidence if so ordered
or to give evidence concerning the matter under investigation or in question. Failure to
obey the order of the court may be punished by the court as a contempt of court.
(d) No person shall be excused from attending and testifying or from producing any
document or record before the commissioner, or in obedience to the subpoena of the
commissioner or any officer designated by him, or in any proceeding instituted by the
commissioner, on the ground that the testimony or evidence, documentary or otherwise
required of him may tend to incriminate him or subject him to a penalty or forfeiture;
but no individual may be prosecuted or subjected to any penalty or forfeiture for or on
account of any transaction, matter, or thing concerning which he is compelled, after
claiming his privilege against self-incrimination, to testify or produce evidence, documentary or otherwise, except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying.
(P.A. 77-482, S. 27; P.A. 80-88, S. 8, 12; 80-483, S. 165, 186; P.A. 88-208, S. 4; 88-230, S. 1, 12; P.A. 90-98, S. 1, 2;
P.A. 93-142, S. 4, 7, 8; P.A. 95-220, S. 4-6; P.A. 97-47, S. 36; P.A. 05-177, S. 9.)
History: P.A. 80-88 specified in Subsec. (a) that commissioner's actions are "subject to the provisions of chapter 3";
P.A. 80-483 substituted "judicial district of Hartford-New Britain" for "Hartford county" in Subsec. (c); P.A. 88-208
amended Subsec. (b) to authorize the commissioner to issue subpoenas at the request of another state and made a technical
change in Subsec. (d); P.A. 88-230 replaced "judicial district of Hartford-New Britain" with "judicial district of Hartford",
effective September 1, 1991; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September
1, 1993; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective
June 14, 1993; Sec. 36-495 transferred to Sec. 36b-26 in 1995; P.A. 95-220 changed the effective date of P.A. 88-230 from
September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 97-47 substituted reference to "the Freedom of
Information Act, as defined in section 1-18a" for "chapter 3"; P.A. 05-177 amended Subsec. (a)(1) to authorize commissioner to investigate whether any person "is violating" provision of Secs. 36b-2 to 36b-33, inclusive, and to make technical
changes, and amended Subsec. (a)(2) to authorize commissioner to require or permit any person to testify or produce a
record as to facts and circumstances re matter to be investigated or about which an action or proceeding is to be instituted.
Sec. 36b-27. (Formerly Sec. 36-496). Enforcement powers of commissioner.
(a) Whenever it appears to the commissioner after an investigation that any person has
violated, is violating or is about to violate any of the provisions of sections 36b-2 to
36b-33, inclusive, or any regulation, rule or order adopted or issued under said sections,
or that the further sale or offer to sell securities would constitute a violation of said
sections or any such regulation, rule or order, or that any person has engaged in a dishonest or unethical practice in the securities or commodities business within the meaning
of sections 36b-31-15a to 36b-31-15d, inclusive, of the regulations of Connecticut state
agencies, the commissioner may, in the commissioner's discretion, order (1) the person,
(2) any other person that directly or indirectly controls such person and that is, was or
would be a cause of the violation of such sections or any such regulation, rule or order,
due to an act or omission such other person knew or should have known would contribute
to such violation, or (3) any other person that has materially aided, is materially aiding
or is about to materially aid in such violation, to cease and desist from the violations or
the causing of or aiding in the violations of the provisions of said sections or of the
regulations, rules or orders thereunder, or from the further sale or offer to sell securities
constituting or which would constitute a violation of the provisions of said sections or
of the regulations, rules or orders thereunder, or from further engaging in such dishonest
or unethical practice. After such an order is issued, the person named in the order may,
within fourteen days after receipt of the order, file a written request for a hearing. Any
such hearing shall be held in accordance with the provisions of chapter 54.
(b) Whenever it appears to the commissioner, after an investigation, that any person
has violated any of the provisions of sections 36b-2 to 36b-33, inclusive, or any regulation, rule or order adopted or issued under said sections, or that the further sale or offer
to sell securities would constitute a violation of said sections or any such regulation,
rule or order, or that such person has engaged in a dishonest or unethical practice in the
securities or commodities business within the meaning of sections 36b-31-15a to 36b-31-15d, inclusive, of the regulations of Connecticut state agencies, the commissioner
may, in addition to any other remedy under this section, order the person to (1) make
restitution of any sums shown to have been obtained in violation of any of the provisions
of said sections or any such regulation, rule or order or as a result of such dishonest or
unethical practice plus interest at the legal rate set forth in section 37-1, (2) provide
disgorgement of any sums shown to have been obtained in violation of any of the provisions of said sections or any such regulation, rule or order or as a result of such dishonest
or unethical practice, or (3) both make restitution and provide disgorgement. After such
an order is issued, the person named in the order may, not later than fourteen days after
receipt of the order, file a written request for a hearing. Any such hearing shall be held
in accordance with the provisions of chapter 54.
(c) The commissioner, in the commissioner's discretion, may order any person who
directly or indirectly controls a person liable under subsection (b) of this section or who
has materially aided a person liable under subsection (b) of this section in violation of
any of the provisions of sections 36b-2 to 36b-33, inclusive, or any regulation, rule or
order adopted or issued under said sections 36b-2 to 36b-33, inclusive, to make restitution, provide disgorgement, or both, of any sums shown to have been obtained as a result
of a dishonest or unethical practice or in violation of any of the provisions of said sections
36b-2 to 36b-33, inclusive, or any regulation, rule or order adopted or issued under said
sections. Such controlling person or aider shall be liable jointly and severally with and
to the same extent as the person liable under subsection (b) of this section, unless such
controlling person or aider allegedly liable under this subsection sustains the burden of
proof that such person did not know, and in the exercise of reasonable care could not
have known, of the existence of facts by reason of which the liability is alleged to exist.
After such an order is issued, the person named in the order may, within fourteen days
after receipt of the order, file a written request for a hearing. Any such hearing shall be
held in accordance with the provisions of chapter 54. There shall be contribution as in
cases of contract among the several persons so liable.
(d) (1) Whenever the commissioner finds as the result of an investigation that any
person has violated any of the provisions of sections 36b-2 to 36b-33, inclusive, or any
regulation, rule or order adopted or issued under said sections, the commissioner may
send a notice to (A) such person, (B) any other person that directly or indirectly controls
such person and that was a cause of the violation of said sections or any such regulation,
rule or order, due to an act or omission such other person knew or should have known
would contribute to such violation, or (C) any other person that has materially aided in
such violation, by registered mail, return receipt requested, or by any express delivery
carrier that provides a dated delivery receipt. Any such notice shall include: (i) A reference to the title, chapter, regulation, rule or order alleged to have been violated; (ii) a
short and plain statement of the matter asserted or charged; (iii) the maximum fine that
may be imposed for such violation; and (iv) the time and place for the hearing. Any
such hearing shall be fixed for a date not earlier than fourteen days after the notice is
mailed.
(2) The commissioner shall hold a hearing upon the charges made unless such person fails to appear at the hearing. Any such hearing shall be held in accordance with
the provisions of chapter 54. After the hearing if the commissioner finds that the person
has violated, caused a violation or materially aided in the violation of any of the provisions of sections 36b-2 to 36b-33, inclusive, or any regulation, rule or order adopted or
issued under said sections, the commissioner may, in the commissioner's discretion and
in addition to any other remedy authorized by said sections, order that a fine not exceeding one hundred thousand dollars per violation be imposed upon such person. If
such person fails to appear at the hearing, the commissioner may, as the facts require,
order that a fine not exceeding one hundred thousand dollars per violation be imposed
upon such person. The commissioner shall send a copy of any order issued pursuant to
this subsection by registered mail, return receipt requested, or by any express delivery
carrier that provides a dated delivery receipt, to any person named in such order.
(e) Whenever it appears to the commissioner that any person has violated, is violating or is about to violate any of the provisions of sections 36b-2 to 36b-33, inclusive,
or any regulation, rule or order adopted or issued under said sections, or that the further
sale or offer to sell securities would constitute a violation of said sections or any such
regulation, rule or order, the commissioner may, in the commissioner's discretion and
in addition to any other remedy authorized by this section, bring an action in the superior
court for the judicial district of Hartford to: (1) Enjoin the acts or practices and to enforce
compliance with sections 36b-2 to 36b-33, inclusive, or any such regulation, rule or
order against (A) such person; (B) any other person who directly or indirectly controls
such person and who is, was or would be a cause of the violation of said sections 36b-2 to 36b-33, inclusive, or any such regulation, rule or order due to an act or omission
such other person knew or should have known would contribute to such violation; or
(C) any other person who has materially aided, is materially aiding or is about to materially aid in such violation. Upon a proper showing, the court may issue a permanent
or temporary injunction, restraining order or writ of mandamus and may order other
appropriate or ancillary relief, which may include: (i) An asset freeze, accounting, writ
of attachment, writ of general or specific execution, and appointment of a receiver or
conservator, who may be the commissioner or a person recommended by the commissioner, for the defendant or the defendant's assets. If a person other than the commissioner is appointed receiver or conservator, the commissioner shall be a party to the
receivership proceeding or conservatorship with standing to initiate or contest any motion, and the views of the commissioner shall be entitled to deference unless they are
inconsistent with the plain meaning of sections 36b-2 to 36b-33, inclusive. The commissioner may appoint such employees and retain such consultants as the commissioner
deems necessary for liquidating or administering the affairs of the defendant; (ii) an
order directing the commissioner to take charge and control of a defendant's property,
including investment accounts and accounts in a depository institution, rents, and profits;
to collect debts; and to acquire and dispose of property; (iii) an order directing the
payment of prejudgment and postjudgment interest; or (iv) an order covering such other
relief as the court considers appropriate. The court shall not require the commissioner
to post a bond; (2) seek a court order imposing a fine not to exceed one hundred thousand
dollars per violation against the person found to have violated, caused a violation or
materially aided in the violation of any provision of sections 36b-2 to 36b-33, inclusive,
or any regulation, rule or order adopted or issued under said sections 36b-2 to 36b-33,
inclusive; (3) apply for an order whereby the person that violated any of the provisions
of said sections 36b-2 to 36b-33, inclusive, or any regulation, rule or order adopted or
issued under said sections shall be ordered to: (A) Make restitution of those sums shown
by the commissioner to have been obtained by such person in violation of any of the
provisions of said sections or any such regulation, rule or order, plus interest at the rate
set forth in section 37-3a; (B) provide disgorgement of any sums shown to have been
obtained in violation of any of the provisions of said sections or any such regulation,
rule or order; (C) both make restitution and provide disgorgement; or (4) apply for
an order whereby any person who directly or indirectly controls a person liable under
subdivision (3) of this subsection, or who has materially aided a person liable under
subdivision (3) of this subsection in a violation of any of the provisions of sections 36b-2 to 36b-33, inclusive, or any regulation, rule or order adopted or issued under said
sections, to make restitution, provide disgorgement, or both, of any sums shown to have
been obtained as a result of such violation. Such controlling person or aider shall be liable
jointly and severally with and to the same extent as the person liable under subdivision (3)
of this subsection, unless such controlling person or aider allegedly liable under this
subdivision sustains the burden of proof that such person did not know, and in the
exercise of reasonable care could not have known, of the existence of facts by reason
of which the liability is alleged to exist. Such restitution or disgorgement shall, at the
option of the court, be payable to the receiver or conservator appointed pursuant to this
subsection, or directly to the persons whose assets were obtained in violation of any
provision of sections 36b-2 to 36b-33, inclusive, or any such regulation, rule or order.
(f) Any time after the issuance of an order or notice provided for in subsection (a),
(b) or (c) or subdivision (1) of subsection (d) of this section, the commissioner may
accept an agreement by any respondent named in such order or notice to enter into a
written consent order in lieu of an adjudicative hearing. The acceptance of a consent
order shall be within the complete discretion of the commissioner. The consent order
provided for in this subsection shall contain (1) an express waiver of the right to seek
judicial review or otherwise challenge or contest the validity of the order or notice; (2)
a provision that the order or notice may be used in construing the terms of the consent
order; (3) a statement that the consent order shall become final when issued; (4) a specific
assurance that none of the violations alleged in the order or notice shall occur in the
future; (5) such other terms and conditions as are necessary to further the purposes and
policies of sections 36b-2 to 36b-33, inclusive; (6) the signature of each of the individual
respondents evidencing such respondent's consent; and (7) the signature of the commissioner or of the commissioner's authorized representative.
(P.A. 77-482, S. 28; P.A. 78-34, S. 8, 17; P.A. 79-396, S. 8, 11; P.A. 80-483, S. 166, 186; P.A. 87-375, S. 6; P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; P.A. 91-145, S. 7; P.A. 93-142, S. 4, 7, 8; P.A. 94-178, S. 3; May 25 Sp. Sess. P.A. 94-1, S. 110; P.A. 95-66, S. 2; 95-220, S. 4-6; P.A. 97-220, S. 13, 15; P.A. 98-162, S. 8; P.A. 99-38, S. 6; P.A. 01-48, S. 4;
P.A. 03-259, S. 21; P.A. 05-177, S. 10.)
History: P.A. 78-34 rephrased situations in which commissioner may take action and added provisions designated as
Subdiv. (a); P.A. 79-396 added Subdivs. (c) to (e) and provisions specifying contents of consent order; P.A. 80-483
substituted "judicial district of Hartford-New Britain" for "Hartford county" in Subdiv. (b); P.A. 87-375 (1) restructured
the section by dividing it into Subsecs.; (2) made technical changes in Subsecs. (a), (c) and (d); (3) added new provisions
in Subsec. (b) re notice requirements for hearings; (4) increased the fine the commissioner may impose to ten thousand
dollars; (5) amended Subsec. (c) to include provisions that restitution shall be paid with interest at the rate set forth in Sec.
37-3a and to increase the fine a court may impose for violations of orders of the commissioner to ten thousand dollars;
P.A. 88-230 replaced "judicial district of Hartford-New Britain" with "judicial district of Hartford", effective September
1, 1991; P.A. 90-98 changed the effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993; P.A. 91-145 amended Subsec. (c) by subjecting persons who have violated the provisions of the Uniform Securities Act to the
enforcement powers of the commissioner and requiring the commissioner to apply to the superior court for the judicial
district of Hartford-New Britain for an order of restitution; P.A. 93-142 changed the effective date of P.A. 88-230 from
September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 94-178 added Subdivs. (2) through (4) to Subsec.
(a) re ordering restitution, disgorgement or both, inserted new Subsec. (b) re liability of controlling persons to make
restitution or provide disgorgement, and renumbered former Subsecs. (b) through (d) as Subsecs. (c) through (e); May 25
Sp. Sess. P.A. 94-1 made technical changes to Subsec. (a); Sec. 36-496 transferred to Sec. 36b-27 in 1995; P.A. 95-66
amended Subsec. (a) to delete remedies other than cease and desist orders for existing or prospective violations, added a
new Subsec. (b) re restitution or disgorgement for past violations, and renumbered remaining Subsecs. accordingly; P.A.
95-220 changed the effective date of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995;
P.A. 97-220 amended Subsec. (a) to add reference to persons who have violated the provisions of Secs. 36b-2 to 36b-33,
inclusive, and amended Subsec. (d) to require notice by registered mail, effective July 1, 1997; P.A. 98-162 amended
Subsec. (d) by changing "civil penalty" to "fine" in Subdiv. (2); P.A. 99-38 added provisions throughout re engaging in a
dishonest or unethical practice in the securities or commodities business, changed the interest rate reference in Subsec. (b)
from Sec. 37-3a to the legal rate set forth in Sec. 37-1, added provisions re joint and several liability of controlling persons
and made a technical change in Subsec. (c), and changed "person charged with violating any provision of sections 36b-2
to 36b-33, inclusive" to "respondent named in such order" and made technical changes in Subsec. (f); P.A. 01-48 made
technical changes throughout, amended Subsec. (c) by adding reference to violation of any regulation, rule or order,
amended Subsec. (d) by adding references to express delivery and amended Subsec. (f) by adding references to notice and
to Subsec. (d)(1); P.A. 03-259 amended Subsec. (a) to authorize commissioner to issue order to any other persons causing
violation, added Subsec. (b)(3) authorizing commissioner to order both restitution and disgorgement, inserted "or both"
in Subsec. (c), increased fines in Subsecs. (d)(2) and (e) from ten thousand dollars to one hundred thousand dollars, inserted
"or any such regulation, rule or order" in Subsec. (e) and made technical changes; P.A. 05-177 amended Subsec. (a) to
insert Subdiv. designators (1) to (3), to authorize commissioner to issue a cease and desist order against person that directly
or indirectly controls a person who commits violation and any other person that has materially aided, is materially aiding
or is about to materially aid in violation, amended Subsec. (c) to authorize commissioner to order restitution and disgorgement for any person who has materially aided a person liable in violation under Subsec. (b) and to insert "or aider"
re joint liability, amended Subsec. (d) to authorize commissioner to impose a fine on any person that directly or indirectly
controls a person who commits violation and that was a cause of violation due to an act or omission such other person
knew or should have known would contribute to violation and on any person that has materially aided in violation, amended
Subsec. (e) to make extensive changes and expand the court-ordered remedies available to commissioner, amended Subsec.
(f)(4) to delete reference to dishonest or unethical practices, and made technical changes throughout.
Sec. 36b-31. (Formerly Sec. 36-500). Regulatory power of commissioner.
Hearings. (a) The commissioner may from time to time make, amend and rescind such
regulations, forms and orders as are necessary to carry out the provisions of sections 36b-2 to 36b-33, inclusive, including regulations, forms and orders governing registration
statements, notice filings, applications, and reports, and defining any terms, whether or
not used in said sections, insofar as the definitions are not inconsistent with the provisions
of said sections. For the purpose of regulations, forms and orders, the commissioner
may classify securities, persons and matters within his or her jurisdiction, and prescribe
different requirements for different classes.
(b) No regulation, form or order may be made, amended or rescinded unless the
commissioner finds that the action is necessary or appropriate in the public interest or
for the protection of investors and consistent with the purposes fairly intended by the
policy and provisions of sections 36b-2 to 36b-33, inclusive. In prescribing regulations,
forms and orders, the commissioner may cooperate with the securities administrators
of the other states and the Securities and Exchange Commission with a view to effectuating the policy of said sections to achieve maximum uniformity in the form and content
of registration statements, notice filings, applications and reports wherever practicable.
(c) To encourage uniform interpretation and administration of sections 36b-2 to
36b-33, inclusive, and effective securities regulation and enforcement, the commissioner may cooperate with the securities agencies or administrators of other states, Canadian provinces or territories, or other countries, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Securities Investor Protection
Corporation, any self-regulatory organization, any national or international organization
of securities officials or agencies, and any governmental law enforcement or regulatory
agency. The cooperation authorized by this subsection includes, but is not limited to,
the following actions: (1) Establishing central depositories for the registration of securities or securities industry personnel under sections 36b-2 to 36b-33, inclusive, and for
documents or records required or allowed to be filed with or maintained by the commissioner under sections 36b-2 to 36b-33, inclusive; (2) conducting joint examinations and
investigations; (3) sharing and exchanging information and documents subject to the
restrictions of chapter 3; (4) sharing and exchanging personnel; and (5) executing joint
agreements, memoranda of understanding and orders.
(d) Subject to Section 15(h) of the Securities Exchange Act of 1934 and Section
222 of the Investment Advisers Act of 1940, the commissioner may, by regulation or
order, prescribe: (1) The form and content of financial statements required under sections
36b-2 to 36b-33, inclusive; (2) the circumstances under which consolidated financial
statements shall be filed; and (3) whether any required financial statements shall be
certified by independent certified public accountants. All financial statements shall be
prepared in accordance with generally accepted accounting principles.
(e) Any regulations issued pursuant to the provisions of sections 36b-2 to 36b-33,
inclusive, shall be adopted in accordance with the provisions of chapter 54.
(f) The commissioner, or employees of the Department of Banking authorized by the
commissioner, may, whether or not requested by any person, issue declaratory rulings
pursuant to section 4-176 or written advisory interpretations of sections 36b-2 to 36b-33, inclusive, including interpretation of the applicability of any provision of said sections, or may issue determinations that the commissioner will not institute a proceeding
or an action under sections 36b-2 to 36b-33, inclusive, against a specified person for
engaging in a specified act, practice or course of business if the determination is consistent with the purposes fairly intended by the policy and provisions of said sections 36b-2 to 36b-33, inclusive.
(g) Every hearing in an administrative proceeding shall be public.
(h) No provision of sections 36b-2 to 36b-33, inclusive, imposing any liability applies to any act done or omitted in good faith in conformity with any regulation, form,
order, advisory interpretation or no action determination of the commissioner, notwithstanding that the regulation, form, order, advisory interpretation or no action determination may later be amended or rescinded or be determined by judicial or other authority
to be invalid for any reason.
(P.A. 77-482, S. 32; P.A. 78-34, S. 9, 10, 17; 78-303, S. 85, 136; P.A. 79-396, S. 9, 11; P.A. 80-88, S. 9, 12; 80-482,
S. 4, 345, 348; P.A. 85-169, S. 10, 11; P.A. 87-9, S. 2, 3; P.A. 91-145, S. 8; P.A. 99-38, S. 7; P.A. 05-177, S. 11.)
History: P.A. 78-34 replaced previous Subsec. (e) which read "No provision of this act imposing any liability applies
to any act done or omitted in good faith in conformity with any regulation, form or order of the commissioner, notwithstanding that the regulation, form or order may later be amended or rescinded or be determined by judicial authority to be invalid
for any reason"; P.A. 78-303 allowed substitution of division of banking within the department of business regulation for
banking department in Subsec. (e) in keeping with P.A. 77-614 provisions; P.A. 79-396 authorized issuance of declaratory
rulings in Subsec. (e); P.A. 80-88 deleted provision in Subsec. (f) which had allowed hearing to be private at commissioner's
discretion upon request of all respondents; P.A. 80-482 restored banking division as independent department and abolished
the department of business regulation; P.A. 85-169 clarified that the commissioner may act on orders as well as regulations
and forms; (Revisor's note: Pursuant to P.A. 87-9 "banking department" was changed editorially by the Revisors to "department of banking"); P.A. 91-145 amended Subsec. (c) by changing generally accepted accounting practices to read generally
accepted accounting principles; Sec. 36-500 transferred to Sec. 36b-31 in 1995; P.A. 99-38 added new Subsec. (c) re
cooperation of commissioner with other regulators and redesignated former Subsecs. (c) to (g), inclusive, as Subsecs. (d)
to (h), inclusive; P.A. 05-177 amended Subsecs. (a) and (b) to insert "notice filings", amended Subsec. (d) to add "Subject
to Section 15(h) of the Securities Exchange Act of 1934 and Section 222 of the Investment Advisers Act of 1940", amended
Subsec. (f) to authorize commissioner or authorized employees to issue determinations that commissioner will not institute
a proceeding or an action against a specified person for engaging in a specified act, practice or course of business, amended
Subsec. (h) to include "no action determination" within the purview of section and made technical changes throughout.
Sec. 36b-32. (Formerly Sec. 36-501). Filing of documents. Register of applications, statements and orders. Copies. (a) A document is filed when it is received by
the commissioner or any other person designated in writing by the commissioner.
(b) The commissioner shall keep a register of all applications for registration and
registration statements which are or have ever been effective under sections 36b-2 to
36b-33, inclusive, and all denial, suspension or revocation orders which have ever been
entered under said sections. Such register shall be open for public inspection.
(c) The information contained in or filed with any effective registration statement,
application or report may be made available to the public in accordance with the provisions of the Freedom of Information Act, as defined in section 1-200.
(d) Upon request and at such charges as provided for in the Freedom of Information
Act, as defined in section 1-200, the commissioner shall furnish to any person photostatic
or other copies, certified under the commissioner's seal of office if requested, of any
entry in the register or any document which is a matter of public record or a certification
that such public record does not exist. In any proceeding or prosecution under sections
36b-2 to 36b-33, inclusive, any copy so certified is prima facie evidence of the contents
of the entry or document certified and a certificate by the commissioner of a record's
nonexistence is prima facie evidence of the nonexistence of such record.
(P.A. 77-482, S. 33; P.A. 80-88, S. 10-12; P.A. 82-149, S. 15, 16; P.A. 83-368, S. 9, 11; P.A. 97-47, S. 37; P.A. 05-177, S. 12.)
History: P.A. 80-88 specified in Subsec. (c) that making information public is to be in accordance with chapter 3 rather
than "under such regulations as the commissioner prescribes" and in Subsec. (d) substituted charges provided for in chapter
3 for "reasonable" charges; P.A. 82-149 amended Subsec. (c) by adding the word "effective"; P.A. 83-368 made technical
changes in Subsec. (a) by adding "or any other person designated in writing by the commissioner"; Sec. 36-501 transferred
to Sec. 36b-32 in 1995; P.A. 97-47 amended Subsecs. (c) and (d) by substituting "the Freedom of Information Act, as
defined in Sec. 1-18a" for "chapter 3"; P.A. 05-177 amended Subsec. (d) to authorize commissioner to furnish a certification
that a public record requested under the Freedom of Information Act does not exist, to provide that in any proceeding or
prosecution under Secs. 36b-2 to 36b-33, inclusive, a certificate by commissioner of a record's nonexistence is prima facie
evidence of the nonexistence of such record, and to make a technical change for the purpose of gender neutrality.
Sec. 36b-33. (Formerly Sec. 36-502). Applicability of chapter to offers to buy
or sell. Appointment of commissioner as attorney for process. (a) Sections 36b-4,
36b-5, 36b-6, 36b-16, 36b-24 and 36b-29 apply to persons who sell or offer to sell when
an offer to sell is made in this state, or when an offer to buy is made and accepted in
this state.
(b) Sections 36b-4, 36b-5, 36b-6 and 36b-24 apply to persons who buy or offer to
buy when an offer to buy is made in this state, or when an offer to sell is made and
accepted in this state.
(c) For the purpose of this section, an offer to sell or to buy is made in this state,
whether or not either party is then present in this state, when the offer originates from
this state or is directed by the offeror to this state and received at the place to which it
is directed or at any post office in this state in the case of a mailed offer.
(d) For the purpose of this section, an offer to buy or to sell is accepted in this state
when acceptance is communicated to the offeror in this state and has not previously
been communicated to the offeror, orally or in writing, outside this state; and acceptance
is communicated to the offeror in this state, whether or not either party is then present
in this state, when the offeree directs it to the offeror in this state reasonably believing
the offeror to be in this state and it is received at the place to which it is directed or any
post office in this state in the case of a mailed acceptance.
(e) An offer to sell or to buy is not made in this state when the publisher circulates
or there is circulated on the publisher's behalf in this state any bona fide newspaper or
other publication of general, regular, and paid circulation which is not published in this
state, or which is published in this state but has had more than two-thirds of its circulation
outside this state during the past twelve months, or when a radio or television program
or other electronic communication originating outside this state is received in this state.
A radio or television program or other electronic communication is considered as having
originated in this state if either the broadcast studio or the originating source of transmission is located in this state, unless: (1) The program or communication is syndicated
and distributed from outside this state for redistribution to the general public in this state;
(2) the program or communication is supplied by a radio, television or other electronic
network with the electronic signal originating from outside this state for redistribution
to the general public in this state; (3) the program or communication is an electronic
communication that originates outside this state and is captured for redistribution to the
general public in this state by a community antenna or cable, radio, cable television or
other electronic system; or (4) the program or communication consists of an electronic
communication that originates in this state, but which is not intended for distribution
to the general public in this state.
(f) Sections 36b-5, 36b-6, 36b-23 and 36b-24, so far as they apply to investment
advisers and investment adviser agents, apply when any act instrumental in effecting
prohibited conduct is done in this state, whether or not either party is then present in
this state.
(g) Every applicant for registration under sections 36b-2 to 36b-33, inclusive, every
investment adviser exempt under subsection (e) of section 36b-6, and every issuer, other
than the United States, any state, Canada, any other foreign government with which the
United States currently maintains diplomatic relations, or any issuer of covered securities under Section 18(b)(1) of the Securities Act of 1933, which proposes to offer a
security in this state through any person acting on an agency basis in the common-law
sense shall file with the commissioner, in such form as the commissioner by regulation
prescribes, an irrevocable consent appointing the commissioner or the commissioner's
successor in office to be his or her attorney to receive service of any lawful process in
any noncriminal suit, action, or proceeding against him or her or his or her successor
executor or administrator which arises under sections 36b-2 to 36b-33, inclusive, or any
regulation or order thereunder after the consent has been filed, with the same force and
validity as if served personally on the person filing the consent. A person who has filed
such a consent in connection with a previous registration need not file another. Service
may be made by leaving a copy of the process in the office of the commissioner, but it
is not effective unless (1) the plaintiff, who may be the commissioner in a suit, action,
or proceeding instituted by the commissioner, forthwith sends notice of the service and
a copy of the process by registered mail, return receipt requested, or by any express
delivery carrier that provides a dated delivery receipt, to the defendant or respondent at
the defendant's or respondent's last address on file with the commissioner, and (2) the
plaintiff's affidavit of compliance with this subsection is filed in the case on or before
the return day of the process, if any, or within such further time as the court allows.
(h) When any person, including any nonresident of this state, engages in conduct
prohibited or made actionable by sections 36b-2 to 36b-33, inclusive, or any regulation
or order thereunder, and such person has not filed a consent to service of process under
subsection (g) of this section and personal jurisdiction over such person cannot otherwise
be obtained in this state, that conduct shall be considered equivalent to such person's
appointment of the commissioner or the commissioner's successor in office to be such
person's attorney to receive service of any lawful process in any noncriminal suit, action,
or proceeding against such person or such person's successor executor or administrator
which grows out of that conduct and which is brought under said sections or any regulation or order thereunder, with the same force and validity as if served on such person
personally. Service may be made by leaving a copy of the process in the office of the
commissioner, and it is not effective unless (1) the plaintiff, who may be the commissioner in a suit, action, or proceeding instituted by the commissioner, forthwith sends
notice of the service and a copy of the process by registered mail, return receipt requested,
or by any express delivery carrier that provides a dated delivery receipt, to the defendant
or respondent at the defendant's or respondent's last known address or takes other steps
which are reasonably calculated to give actual notice, and (2) the plaintiff's affidavit of
compliance with this subsection is filed in the case on or before the return day of the
process, if any, or within such further time as the court allows.
(i) Service pursuant to subsection (g) or (h) of this section may be made by the
commissioner in an investigation or administrative proceeding in which the commissioner is the moving party.
(P.A. 77-482, S. 34; P.A. 83-368, S. 10, 11; P.A. 88-208, S. 5; P.A. 97-22, S. 5; 97-220, S. 14, 15; P.A. 01-48, S. 6;
P.A. 05-177, S. 13.)
History: P.A. 83-368 amended Subsec. (g) to except the United States, any state, Canada or any other foreign government
with which this country maintains diplomatic relations from filing an irrevocable consent re service of process in any
lawsuit; P.A. 88-208 amended Subsec. (f) by substituting the reference to Sec. 36-473 for 36-471 and added the reference
to investment advisor agents; Sec. 36-502 transferred to Sec. 36b-33 in 1995; P.A. 97-22 made a technical change in
Subsec. (h); P.A. 97-220 amended Subsec. (g) by adding references to investment advisers exempt under Subsec. (e) of
Sec. 36b-6 and issuers of covered securities, effective July 1, 1997; P.A. 01-48 made technical changes for purposes of
gender neutrality in Subsecs. (e), (g) and (h) and amended Subsecs. (g) and (h) by adding references to return receipt
requested and express delivery; P.A. 05-177 amended Subsec. (e) to insert "or other electronic communication" re when
an offer to sell or buy is not made in state and to provide that, with specified exceptions, a radio or television program or
other electronic communication is considered as having originated in state if either the broadcast studio or originating
source of transmission is located in state, amended Subsec. (f) to add reference to Sec. 36b-23, amended Subsecs. (g) and
(h) to make technical changes, and added Subsec. (i) providing that service pursuant to Subsec. (g) or (h) may be made by
commissioner in proceeding in which commissioner is the moving party.