(a) The Commissioner may:
(1) Make public or private investigations inside or outside of the District as he considers necessary to determine whether a person has violated, or is about to violate, any provision of this chapter, or any rule or order hereunder, to aid in the enforcement of this chapter, or to aid in the prescribing of rules and forms to implement this chapter. The Commissioner may require the person to pay the reasonable costs and expenses of the investigation;
(2) Require or permit the person to 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; and
(3) Publish information concerning a violation of this chapter or any rule or order adopted under this chapter.
(b) For purposes of an investigation or proceeding under this chapter, the Commissioner may administer oaths and affirmations, subpoena witnesses and 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.
(c) In case of contumacy by, or refusal to obey a subpoena issued to, a person, the Superior Court of the District of Columbia, upon application by the Commissioner, may issue to the person an order requiring the person to appear before the Commissioner to produce documentary evidence, or to give evidence touching the matter under investigation or in question. Failure to obey the order of the court may be punished as a contempt of court.
(d) No person shall be excused from attending and testifying or from producing a document or record before the Commissioner, in obedience to the subpoena of the Commissioner, or in any proceeding instituted by the Commissioner, on the ground that the testimony or evidence, documentary or otherwise, required of the person may tend to incriminate the person or subject the person to a penalty or forfeiture; provided, that no individual may be prosecuted or subjected to a penalty or forfeiture for or on account of a specific subject concerning which the individual is compelled, after claiming his privilege against self-incrimination as to the specific subject, to testify or produce evidence, documentary or otherwise; provided further, that the individual testifying shall not be exempt from prosecution and punishment for perjury or contempt committed in testifying.
(e) The Commissioner may issue and apply to enforce subpoenas in the District at the request of a securities agency or administrator of another state if the activities constituting an alleged violation for which the information is sought would violate this chapter if the activities had occurred in the District.
(Oct. 26, 2000, D.C. Law 13-203, § 601, 47 DCR 7837.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For Law 13-203, see notes following § 31-5601.01.
(a) Whenever the Commissioner determines that a person has engaged, or is about to engage, in an act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, and that immediate action against such person is in the public interest, the Commissioner may issue, without a hearing, a summary order directing the person to cease and desist from engaging in such activity; provided, that the summary cease and desist order shall give the person:
(1) Notice of the opportunity for a hearing before the Commissioner to determine whether the summary cease and desist order should be vacated, modified, or entered as final; and
(2) Notice that the summary cease and desist order will be entered as final if the person does not request a hearing within 15 days of the receipt of the summary cease and desist order.
(b) Whenever the Commissioner determines after notice and a hearing, unless the right to a hearing is waived, that a person has engaged in an act or practice constituting a violation of this chapter or any rule or order adopted under this chapter, the Commissioner may, in addition to taking any other action authorized under this chapter:
(1) Issue a cease and desist order against the person;
(2) Censure the person if the person is licensed under this chapter;
(3) Bar the person from engaging in the securities business or investment advisory business in the District;
(4) Issue an order against the person imposing a civil penalty up to $10,000 for any single violation of this chapter; or
(5) Issue an order requiring the person to pay restitution and reasonable costs of the hearing.
(Oct. 26, 2000, D.C. Law 13-203, § 602, 47 DCR 7837; June 25, 2002, D.C. Law 14-150, § 2(k), 49 DCR 4238.)
HISTORICAL AND STATUTORY NOTES
Effect of Amendments
D.C. Law 14-150, in subsec. (b), deleted ", or his or her designee," following "Whenever the Commissioner".
Legislative History of Laws
For Law 13-203, see notes following § 31-5601.01.
For Law 14-150, see notes following § 31-5601.01.
(a) Whenever it appears to the Commissioner that a person is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule or order adopted under this chapter, the Commissioner may request the Corporation Counsel to bring an action in the Superior Court of the District of Columbia to obtain one or more of the following remedies:
(1) Temporary restraining order; or
(2) Temporary or permanent injunction.
(b) Whenever it appears to the Commissioner that a person has engaged in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, the Commissioner may request the Corporation Counsel to bring an action in the Superior Court of the District of Columbia to obtain one or more of the following remedies:
(1) Temporary restraining order;
(2) Temporary or permanent injunction;
(3) A civil penalty not to exceed $10,000 for a single violation ;
(4) A declaratory judgment;
(5) Appointment of a receiver or conservator for the defendant or the defendant's assets;
(6) A freeze of the defendant's assets; or
(7) Any other relief as the court deems just, such as rescission, restitution, or disgorgement.
(c) The court shall not require the Commissioner to post a bond in any action under this section.
(Oct. 26, 2000, D.C. Law 13-203, § 603, 47 DCR 7837.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For Law 13-203, see notes following § 31-5601.01.
(a) Any person who violates § 31-5605.01 shall be guilty of a misdemeanor and, upon conviction thereof, shall pay a fine of not more than $1,000, be imprisoned for not more than one year, or both. All prosecutions under this subsection shall be upon information filed in the Superior Court of the District of Columbia in the name of the District by the Corporation Counsel or any of his or her assistants.
(b) Any person who knowingly or intentionally violates any of the provisions of § 31-5605.02, § 31-5605.03, § 31-5605.04, or § 31-5605.05(b), shall be guilty of fraud in the second degree, as defined in § 22-3221(b).
(c) Any person who knowingly or intentionally violates any of the provisions of § 31-5605.02, § 31-5605.03, § 31-5605.04, or § 31-5605.05(b), by use of a plan, program, or campaign that is conducted using one or more telephones or other electronic means of communication for the purpose of inducing the purchase or sale of securities, shall be guilty of fraud in the first degree, as defined in § 22-3221(a).
(d) No prosecution for a violation of this chapter shall bar, or be barred by, a prosecution for the violation of any other law. All prosecutions under this chapter, or based upon any provision of this chapter, shall be commenced within 3 years after the violation upon which the prosecution is based. If the accused person has intentionally concealed evidence of a violation of § 31-5605.02, § 31-5605.03, § 31-5605.04, or § 31-5605.05(b), the period of limitation prescribed in this subsection shall be extended up to an additional 2 years after the prosecuting officer becomes aware of the offense.
(e) Nothing in this chapter shall limit the power of the District to punish a person for conduct constituting a crime under other law.
(Oct. 26, 2000, D.C. Law 13-203, § 604, 47 DCR 7837.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For Law 13-203, see notes following § 31-5601.01.
(a)(1) A person shall be civilly liable to another person who buys a security if the person:
(A) Offers or sells a security in violation of § 31-5602.01, § 31- 5603.01, or § 31-5605.05, of a rule or order under § 31-5604.05 which requires the affirmative approval of sales literature, or of a condition imposed under § 31-5603.05(g) or (h); or
(B) Offers or sells a security by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statement made, in the light of the circumstances under which made, not misleading, the buyer does not know of the untruth or omission and the offeror or seller does not sustain the burden of proof that the offeror or seller did not know, and in the exercise of reasonable care could not have known, of the untruth or omission.
(2) A person shall be civilly liable to another person who sells a security if the person offers to purchase or purchases the security by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statement made, in the light of the circumstances under which it is made, not misleading, the seller does not know of the untruth or omission, and the purchaser does not sustain the burden of proof that the purchaser did not know, and in the exercise of reasonable care could not have known, of the untruth or omission.
(3) A person shall be civilly liable to another person if the person:
(A) Acts as an investment adviser or representative in violation of §§ 31- 5602.02, 31-5605.02, 31-5605.05(b), or of any rule or order adopted under § 31-5604.05; or
(B)(i) Receives directly or indirectly any consideration from the other person for advice as to the value of securities or their purchase or sale or for acting as an investment adviser or representative under § 31-5601.01(17) or (18), whether through the issuance of analyses, reports or otherwise, and
(ii) Employs an device, scheme, or artifice to defraud the other person or engages in an act, practice, or course of business which operates or would operate as a fraud or deceit on the other person.
(b)(1) In an action brought under subsection (a)(1) of this section, a buyer may sue at law or in equity:
(A) To recover the consideration paid for the security, interest at the rate used in the Superior Court of the District of Columbia from the date of payment, costs, and reasonable attorneys' fees, less the amount of any income received on the security, upon the tender of the security and any income received on it; or
(B) For damages if the buyer no longer owns the security. The amount of damages shall be the amount that would be recoverable on a tender less the value of the security when the buyer disposed of it, plus interest at the rate used in the Superior Court of the District of Columbia from the date of disposition.
(2) In an action under subsection (a)(2) of this section, a seller may sue at law or in equity:
(A) On tender of the consideration paid for the security, to recover the security, the amount of any income received on the security, costs, and reasonable attorneys' fees; or
(B) For damages if the buyer no longer owns the security.
(3) In an action brought under subsection (a)(3) of this section, a person may sue at law or in equity for the rescission of the advisory contract and any damages resulting from the violation, interest at the rate used in the Superior Court of the District of Columbia from the date of payment of the consideration plus costs and reasonable attorney's fees, less the amount of any income received from such advice.
(c) A person who directly or indirectly controls a person liable under subsection (a) of this section; a partner, officer, or director of the person liable; a person occupying a similar status or performing similar functions; an employee of the person liable who materially aids in the conduct giving rise to the liability; and a broker-dealer or agent who materially aids in the conduct shall be liable jointly and severally with, and to the same extent as the person liable, unless her or she is able to sustain the burden of proof that he or she did not know, and in exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist. There shall be contribution among the several persons so liable.
(d) A tender specified in this section may be made at any time before entry of judgment.
(e) A cause of action under this chapter shall survive the death of any person who might have been a plaintiff or defendant.
(f)(1) A person may not sue under subsection (a)(1) and (2) of this section after the earlier of 3 years after the contract of sale or purchase, or the time specified in paragraph (2) of this subsection.
(2) An action may not be maintained:
(A) To enforce any liability under subsection (a)(1)(A) of this section unless brought within one year after the violation on which it is based; or
(B) To enforce a liability under subsections (a)(1)(B) or (a)(2) of this section unless brought within one year after the discovery of the untrue statement or omission or after the discovery should have been made by the exercise of reasonable diligence.
(3) A person may not sue under subsection (a)(3) of this section after the earlier of 3 years after the date of the advisory contract or the rendering of investment advice, or the expiration of 2 years after the discovery of the facts constituting the violation.
(g) No person may sue under this section if:
(1) The buyer received a written offer, before suit and at a time when the buyer owned the security or asset, to refund the consideration paid, and interest at the rate used in the Superior Court of the District of Columbia from the date of payment, less the amount of any income received on the security or asset, and the buyer failed to accept the offer within 30 days of its receipt;
(2) The buyer received such an offer before suit and at a time when the buyer did not own the security or asset, unless the buyer rejected the offer in writing within 30 days of its receipt; or
(3) The seller received a written offer from the buyer, before suit, to return the security or asset, together with the amount of any income received on the security, and interest at the rate used by the Superior Court of the District of Columbia from the date of payment, and the seller failed to accept the offer within 30 days of its receipt.
(h) No person may sue on a contract if the person has made or engaged in the performance of the contract in violation of this chapter or any rule or order adopted under this chapter, or has acquired any purported right under the contract with knowledge of the facts by reason of which its making or performance violated this chapter or a rule or order adopted under this chapter.
(i) A condition, stipulation, or provision that binds a person who acquires a security or asset, or receives a investment advice, to waive compliance with a provision of this chapter or a rule or order adopted under this chapter shall be void.
(j) The rights and remedies provided by this chapter shall be in addition to any other rights or remedies that may exist at law or in equity, but this chapter does not create a cause of action not specified in this section or authorized under the bonding requirements of § 31-5602.03(h).
(Oct. 26, 2000, D.C. Law 13-203, § 605, 47 DCR 7837.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For Law 13-203, see notes following § 31-5601.01.
