ARTICLE 6 – ADMINISTRATION AND JUDICIAL REVIEW

§601.  ADMINISTRATION.  (a) [Administration.] The administrator shall administer this [Act]  [insert any related provisions on such matters as method of selection, salary, term of office, selection and remuneration of personnel, and annual reports to the legislature or governor that are appropriate to the particular State].

RCW 21.20.460  Administrator of securities -- Appointment, qualifications, term, etc.

The director shall appoint a competent person to administer this chapter who shall be designated administrator of securities. The director shall delegate to the administrator such powers, subject to the authority of the director, as may be necessary to carry out the provisions of this chapter. The administrator shall hold office at the pleasure of the director.

RCW 21.20.470  Compensation, travel expenses of administrator and employees.

The administrator, and any person employed by the administrator, shall be paid, in addition to regular compensation, travel expenses incurred by each of them in the performance of their duties under this chapter in accordance with RCW 43.03.050 and 43.03.060 as now existing or hereafter amended.

§ 45. ADMINISTRATION.  (1) Administration.  The director shall appoint a competent person to administer this chapter who shall be designated administrator of securities.  The director shall delegate to the administrator such powers, subject to the authority of the director, as may be necessary to carry out the provisions of this chapter.  The administrator shall hold office at the pleasure of the director.  The administrator, and any person employed by the administrator, shall be paid, in addition to regular compensation, travel expenses incurred by each of them in the performance of their duties under this chapter in accordance with RCW 43.03.050 and 43.03.060.

USA general approach followed, which retains current RCW 21.20.460-.470. as § 45(1).

(b) [Unlawful use of records or information.] It is unlawful for the administrator or an officer, employee, or designee of the administrator to use for personal benefit or the benefit of others records or other information obtained by or filed with the administrator that are not public under Section 607(b).  This [Act] does not authorize the administrator or an officer, employee, or designee of the administrator to disclose the record or information, except in accordance with Section 602, 607(c), or 608.

RCW 21.20.480  Unlawful use or disclosure of filed information.

It is unlawful for the director or any of the director's officers or employees to use for personal benefit any information which is filed with or obtained by the director and which is not made public. The director or any of the director's officers or employees shall not disclose any such information or the fact that any investigation is being made except among themselves or when necessary or appropriate in a proceeding or investigation under this chapter

§ 45(2).  Unlawful use of records or information.  It is unlawful for the director or an officer, employee, or designee of the director to use for personal benefit or the benefit of others records or other information obtained by or filed with the director that are not public under section 51(2) of this act.  This chapter does not authorize the director or an officer, employee, or designee of the director to disclose the record or information, except in accordance with section 46, 51(3), or 52 of this act.

USA

(c) [No privilege or exemption created or diminished.]  This [Act] does not create or diminish a privilege or exemption that exists at common law, by statute or rule, or otherwise.

Last sentence of RCW 21.20.480, directly above:  No provision of this chapter either creates or derogates from any privilege which exists at common law or otherwise when documentary or other evidence is sought under a subpoena directed to the director or any of the director's officers or employees.

§ 45(3).  No privilege or exemption created or diminished.  This chapter does not create or diminish a privilege or exemption that exists at common law, by statute or rule, or otherwise.

USA

(d) [Investor education.]  The administrator may develop and implement investor education initiatives to inform the public about investing in securities, with particular emphasis on the prevention and detection of securities fraud.  In developing and implementing these initiatives, the administrator may collaborate with public and nonprofit organizations with an interest in investor education.  The administrator may accept a grant or donation from a person that is not affiliated with the securities industry or from a nonprofit organization, regardless of whether the organization is affiliated with the securities industry, to develop and implement investor education initiatives.  This subsection does not authorize the administrator to require participation or monetary contributions of a registrant in an investor education program.

§ 45(4).  Investor education.  The director may develop and implement investor education initiatives to inform the public about investing in securities, with particular emphasis on the prevention and detection of securities fraud.  In developing and implementing these initiatives, the director may collaborate with public and nonprofit organizations with an interest in investor education.  The director may accept a grant or donation from a person that is not affiliated with the securities industry or from a nonprofit organization, regardless of whether the organization is affiliated with the securities industry, to develop and implement investor education initiatives.

USA less the last sentence of (d), which might be construed to prohibit consent orders requiring contributions to the Investor Protection Trust or similar organizations.

(e) [The Securities Investor Education and Training Fund.] The Securities Investor Education and Training Fund is created to provide funds for the purposes specified in subsection (d).  [All monies received by the State by reason of civil penalties pursuant to this [Act] shall be deposited in the Securities Investor Education and Training Fund. The State may insert any other provision concerning appropriations to support this fund as well as procedures for its operations.]

RCW 21.20.550  State advisory committee -- Composition, appointment, qualifications.

There is hereby created a state advisory committee which shall consist of seven members to be appointed by the governor on the basis of their experience and qualifications. The membership shall be selected, insofar as possible, on the basis of giving both geographic representation and representation to all phases of the securities business including the legal and accounting professions.

RCW 21.20.560  State advisory committee -- Chairperson, secretary -- Meetings.

(1) The committee shall select a chairperson and a secretary from their group.

(2) Regular meetings may be held quarterly, or semiannually, and special meetings may be called by the chairperson upon at least seven days' written notice to each committee member sent by regular mail.

RCW 21.20.570  State advisory committee -- Terms -- Vacancies.

The first members of the committee shall hold office as follows: Two members to serve two years; two members to serve three years; and three members to serve four years. Upon the expiration of said original terms subsequent appointment shall be for four years except in the case of a vacancy, in which event appointment shall be only for the remainder of the unexpired term in which the vacancy occurs.

RCW 21.20.580  State advisory committee -- Duties.

The advisory committee shall:

(1) Serve in an advisory capacity to the director on all matters pertaining to this chapter.

(2) Acquaint themselves fully with the operations of the director's office as to the administration of securities, broker-dealers, salespersons, and investment advisers, and periodically recommend to the director such changes in the rules and regulations of the department in connection therewith as they deem advisable.

(3) Prepare and publish a mimeographed report on their recommendations.

RCW 21.20.590  State advisory committee -- Reimbursement of travel expenses.

The advisory committee shall be reimbursed for their travel expenses in accordance with RCW 43.03.050 and 43.03.060 as now existing or hereafter amended.

§ 45(5).    Advisory committee.  There is hereby created a state advisory committee, which shall consist of seven members to be appointed by the governor on the basis of their experience and qualifications.  The membership shall be selected, insofar as possible, on the basis of giving both geographic representation and representation to all phases of the securities business including the legal and accounting professions.

    (a) The committee shall select a chairperson and a secretary from their group.

    (b) Regular meetings of the advisory committee may be held quarterly, or semiannually, and special meetings may be called by the chairperson upon at least seven days' written notice to each committee member sent by regular mail.

    (c) The appointment of a member of the committee shall be for four years except in the case of a vacancy, in which event appointment shall be only for the remainder of the unexpired term in which the vacancy occurs.

    (d) The advisory committee shall:

        (i) Serve in an advisory capacity to the director on all matters pertaining to this chapter;

        (ii) Acquaint themselves fully with the operations of the director's office as to the administration of securities, broker-dealer, sales agent, investment adviser, federal covered investment advisor, and investment adviser representative rules and regulations, and periodically recommend to the director such changes in connection therewith as they deem advisable; and

        (iii) Prepare and publish a report on their recommendations.

    (e) The advisory committee shall be reimbursed for their travel expenses in accordance with RCW 43.03.050 and 43.03.060.

Division draft does not include the optional language establishing the Education and Training Fund.  Instead , § 45(5) contains provision pertaining to the Advisory Committee that are currently found at RCW 21.20.550 -- .590

§602.  INVESTIGATIONS AND SUBPOENAS.

(a) [Authority to investigate.] The administrator may:

             (1) conduct public or private investigations within or outside of this State which the administrator considers necessary or appropriate to determine whether a person has violated, is violating, or is about to violate this [Act] or a rule adopted or order issued under this [Act], or to aid in the enforcement of this [Act] or in the adoption of rules and forms under this [Act];

             (2) require or permit a person to testify, file a statement, or produce a record, under oath or otherwise as the administrator determines, as to all the facts and circumstances concerning a matter to be investigated or about which an action or proceeding is to be instituted; and

             (3) publish a record concerning an action, proceeding, or an investigation under, or a violation of, this [Act] or a rule adopted or order issued under this [Act] if the administrator determines it is necessary or appropriate in the public interest and for the protection of investors.     

RCW 21.20.370  Investigations -- Statement of facts relating to investigation may be permitted -- Publication of information -- Use of criminal history record information.

(1) The director in his or her discretion

(a) may annually, or more frequently, make such public or private investigations within or without this state as the director deems necessary to determine whether any registration should be granted, denied or revoked or whether any person has violated, is violating, or is about to violate any provision of this chapter or any rule or order under this chapter, or to aid in the enforcement of this chapter or in the adoption of rules and forms under this chapter,

(b) may engage in the detection and identification of criminal activities subject to this chapter,

(c) may require or permit any person to testify or to file a statement in writing, under oath or otherwise as the director may determine, as to all the facts and circumstances concerning the matter to be investigated, and

 (d) may publish information concerning a proceeding, an investigation, or any violation of this chapter or any rule or order under this chapter, if the director determines it is necessary or appropriate in the public interest or for the protection of investors.

§ 46(1).  INVESTIGATIONS AND SUBPOENAS.  (1) Authority to investigate.  (a) The director may:

            (i) Conduct public or private investigations within or outside of this state which the director considers necessary or appropriate to determine whether a person has violated, is violating, or is about to violate this chapter or a rule adopted or order issued under this chapter, or to aid in the enforcement of this chapter or in the adoption of rules and forms under this chapter;

            (ii) Require or permit a person to testify, file a statement, or produce a record, under oath or otherwise as the director determines, as to all the facts and circumstances concerning a matter to be investigated or about which an action or proceeding is to be instituted;           

            (iii) Publish a record concerning an action, proceeding, or an investigation under, or a violation of, this chapter or a rule adopted or order issued under this chapter if the director determines it is necessary or appropriate in the public interest or for the protection of investors; and

   (iv) Engage in the investigation, detection, and identification of criminal activities subject to this chapter.

USA with additional language following current RCW 21.20.370(1)(b) concerning the detection and identification of criminal activities.

(2) The enforcement unit of the securities division of the department of financial institutions may be authorized to receive criminal history record information in connection with the investigation of criminal activities subject to this chapter.

§ 46(1)(b).  The enforcement unit of the securities division of the department of financial institutions may be authorized to receive criminal history record information in connection with the investigation of criminal activities subject to this chapter.

RCW 21.20. 370(2) retained.

(b) [Administrator powers to investigate.] For the purpose of an investigation under this [Act], the administrator or its designated officer may administer oaths and affirmations, subpoena witnesses, seek compulsion of attendance, take evidence, require the filing of statements, and require the production of any records that the administrator considers relevant or material to the investigation.

RCW 21.20.380  Oaths -- Subpoenas -- Assisting another state -- Compelling obedience -- Punishment.

(1) For the purpose of any investigation or proceeding under this chapter, the director or any officer designated by the director 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 director deems relevant or material to the inquiry.

(3) A subpoena issued to a financial institution under this section may, if the director finds it necessary or appropriate in the public interest or for the protection of investors, include a directive that the financial institution subpoenaed shall not disclose to third parties that are not affiliated with the financial institution, other than to the institution's legal counsel, the existence or content of the subpoena.

§ 46(2).  Director powers to investigate.  For the purpose of an investigation under this chapter, the director or his or her designated officer may administer oaths and affirmations, subpoena witnesses, seek compulsion of attendance, take evidence, require the filing of statements, and require the production of any records that the director considers relevant or material to the investigation.  A subpoena issued to a financial institution under this section may, if the director finds it necessary or appropriate in the public interest or for the protection of investors, include a directive that the financial institution subpoenaed shall not disclose to third parties that are not affiliated with the financial institution, other than to the institution's legal counsel, the existence or content of the subpoena.

USA with additional language following RCW 21.20.380(3) addressing nondisclosure directives.

 (c) [Procedure and remedies for noncompliance.] If a person does not appear or refuses to testify, file a statement, produce records, or otherwise does not obey a subpoena as required by the administrator under this [Act], the administrator [may refer the matter to the Attorney General or the proper attorney, who] may apply to [insert name of the appropriate court] or a court of another State to enforce compliance. The court may:

 (1) hold the person in contempt;

(2) order the person to appear before the administrator;

(3) order the person to testify about the matter under investigation or in question;

(4) order the production of records;

(5) grant injunctive relief, including restricting or prohibiting the offer or sale of securities or the providing of investment advice;

(6) impose a civil penalty of not less than $[__] and not greater than $[__] for each violation; and

(7) grant any other necessary or appropriate relief.

RCW 21.20.380(4) In case of disobedience on the part of any person to comply with any subpoena lawfully issued by the director, the refusal of any witness to testify to any matters regarding which the witness may be lawfully interrogated, or the failure to comply with a nondisclosure directive under subsection (3) of this section, a court of competent jurisdiction of any county or the judge thereof, on application of the director, and after satisfactory evidence of willful disobedience, may compel obedience by proceedings for contempt, as in the case of disobedience of the requirements of a subpoena issued from such a court on a refusal to testify therein.

§ 46(3).  Procedure and remedies for noncompliance.  If a person does not appear; refuses to testify, file a statement, or produce records; fails to comply with a nondisclosure directive under subsection (2) of this section; or otherwise does not obey a subpoena as required by the director under this chapter, the director may apply to a court of competent jurisdiction or a court of another state to enforce compliance.  The court may:

    (a) Hold the person in contempt;

    (b) Order the person to appear before the director;

    (c) Order the person to testify about the matter under investigation or in question;

    (d) Order the production of records;

    (e) Grant injunctive relief, including restricting or prohibiting the offer or sale of securities or the providing of investment advice;

     (f) Impose a civil penalty for each violation as determined appropriate by the court; and

    (g) Grant any other necessary or appropriate relief.

USA with additional language addressing non-disclosure directives under current RCW 21.20.380(4).  Consistent with current practice, a court has discretion to impose an appropriate civil penalty.

 (d) [Application for relief.] This section does not preclude a person from applying to [insert name of appropriate court] or a court of another State for relief from a request to appear, testify, file a statement, produce records, or obey a subpoena.

§ 46(4).  Application for relief.  This section does not preclude a person from applying to a court of competent jurisdiction or a court of another state for relief from a request to appear, testify, file a statement, produce records, or obey a subpoena.

USA

 (e) [Use immunity procedure.] An individual is not excused from attending, testifying, filing a statement, producing a record or other evidence, or obeying a subpoena of the administrator under this [Act] or in an action or proceeding instituted by the administrator under this [Act] on the ground that the required testimony, statement, record, or other evidence, directly or indirectly, may tend to incriminate the individual or subject the individual to a criminal fine, penalty, or forfeiture. If the individual refuses to testify, file a statement, or produce a record or other evidence on the basis of the individual’s privilege against self-incrimination, the administrator may apply [to the name of the appropriate court] to compel the testimony, the filing of the statement, the production of the record, or the giving of other evidence. The testimony, record, or other evidence compelled under such an order may not be used, directly or indirectly, against the individual in a criminal case, except in a prosecution for perjury or contempt or otherwise failing to comply with the order.

§ 46(5).  Use immunity procedure.  An individual is not excused from attending, testifying, filing a statement, producing a record or other evidence, or obeying a subpoena of the director under this chapter or in an action or proceeding instituted by the director under this chapter on the ground that the required testimony, statement, record, or other evidence, directly or indirectly, may tend to incriminate the individual or subject the individual to a criminal fine, penalty, or forfeiture.  If the individual refuses to testify, file a statement, or produce a record or other evidence on the basis of the individual's privilege against self-incrimination, the director may apply to a court of competent jurisdiction to compel the testimony, the filing of the statement, the production of the record, or the giving of other evidence.  The testimony, record, or other evidence compelled under such an order may not be used, directly or indirectly, against the individual in a criminal case, except in a prosecution for perjury or contempt or otherwise failing to comply with the order.

USA

(f) [Assistance to securities regulator of another jurisdiction.] At the request of the securities regulator of another State or a foreign jurisdiction, the administrator may provide assistance if the requesting regulator states that it is conducting an investigation to determine whether a person has violated, is violating, or is about to violate a law or rule of the other State or foreign jurisdiction relating to securities matters that the requesting regulator administers or enforces. The administrator may provide the assistance by using the authority to investigate and the powers conferred by this section as the administrator determines is necessary or appropriate. The assistance may be provided without regard to whether the conduct described in the request would also constitute a violation of this [Act] or other law of this State if occurring in this State. In deciding whether to provide the assistance, the administrator may consider whether the requesting regulator is permitted and has agreed to provide assistance reciprocally within its State or foreign jurisdiction to the administrator on securities matters when requested; whether compliance with the request would violate or prejudice the public policy of this State; and the availability of resources and employees of the administrator to carry out the request for assistance.

RCW 21.20.380(2) If the activities constituting an alleged violation for which the information is sought would be a violation of this chapter had the activities occurred in this state, the director may issue and apply to enforce subpoenas in this state at the request of a securities agency or administrator of another state.

§ 46(6).  Assistance to securities regulator of another jurisdiction.  At the request of the securities regulator of another state or a foreign jurisdiction, the director may provide assistance if the requesting regulator states that it is conducting an investigation to determine whether a person has violated, is violating, or is about to violate a law or rule of the other state or foreign jurisdiction relating to securities matters that the requesting regulator administers or enforces.  The director may provide the assistance by using the authority to investigate and the powers conferred by this section as the director determines is necessary or appropriate.  The assistance may be provided without regard to whether the conduct described in the request would also constitute a violation of this chapter or other law of this state if occurring in this state.  In deciding whether to provide the assistance, the director may consider whether the requesting regulator is permitted and has agreed to provide assistance reciprocally within its state or foreign jurisdiction to the director on securities matters when requested; whether compliance with the request would violate or prejudice the public policy of this state; and the availability of resources and employees of the director to carry out the request for assistance.

USA

RCW 21.20.700.  Investigations and examinations -- Additional authority -- Scope.

(1) In addition to the authority conferred in RCW 21.20.370 the director at any time during a public offering whether registered or not, or one year thereafter or at any time that any debt or equity securities which have been sold to the public pursuant to registration under this chapter are still an outstanding obligation of the issuer: (a) May investigate the issuer for the purpose of ascertaining whether there have been violations of this chapter, rules adopted under this chapter, or any conditions imposed by the director expressed in any permit for a public offering or otherwise; (b) may visit and examine the issuer for the purpose of assuring compliance with this chapter, rules adopted under this chapter, or any conditions imposed by the director whether expressed in the permit for the public offering or otherwise; (c) may require or permit any person to file a statement in writing, under oath or otherwise as the director may determine, as to all the facts and circumstances concerning the matter to be investigated; and (d) may publish information concerning any violation of this chapter, or any rule, order, or condition adopted or imposed under this chapter.
(2) The examination or investigation, whether conducted within or without this state, shall include the right to reasonably examine the issuer's books, accounts, records, files, papers, feasibility reports, other pertinent information and obtain written permission from the issuer to consult with the independent accountant who audited the financial statements of the issuer. The reasonable costs of the examination shall be paid by the issuer to the director. The issuer shall not be liable for the costs of second or subsequent examinations during a calendar year.

§ 46(7).  (a) In addition to the authority conferred elsewhere in this section, the director may, at any time during a public offering, whether registered or not, or one year thereafter or at any time that any debt or equity securities which have been sold to the public pursuant to registration under this chapter are still an outstanding obligation of the issuer:

        (i) Investigate the issuer for the purpose of ascertaining whether there have been violations of this chapter, rules adopted under this chapter, or any conditions imposed by the director expressed in any permit for a public offering or otherwise;

        (ii) Visit and examine the issuer for the purpose of assuring compliance with this chapter, rules adopted under this chapter, or any conditions imposed by the director whether expressed in the permit for the public offering or otherwise;

        (iii) Require or permit any person to file a statement in writing, under oath or otherwise as the director may determine, as to all the facts and circumstances concerning the matter to be investigated; and

        (iv) Publish information concerning any violation of this chapter, or any rule, order, or condition adopted or imposed under this chapter.

    (b) The examination or investigation, whether conducted within or without this state, shall include the right to reasonably examine the issuer's books, accounts, records, files, papers, feasibility reports, and other pertinent information and obtain written permission from the issuer to consult with the independent accountant who audited the financial statements of the issuer.  The reasonable costs of the examination shall be paid by the issuer to the director.  The issuer shall not be liable for the costs of second or subsequent examinations during a calendar year.

RCW 21.20. 700 retained as § 46(7).

§603.  CIVIL ENFORCEMENT.  (a) [Civil action instituted by administrator.] If the administrator believes that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this [Act] or a rule adopted or order issued under this [Act] or that a person has, is, or is about to engage in an act, practice, or course of business that materially aids a violation of this [Act] or a rule adopted or order issued under this [Act], the administrator may maintain an action in the [insert the name of the court] to enjoin the act,  practice, or course of business and to enforce compliance with this [Act] or a rule adopted or order issued under this [Act].

RCW 21.20.390

* * *

(2) The director may without issuing a cease and desist order, bring an action in any court of competent jurisdiction to enjoin any such acts or practices and to enforce compliance with this chapter or any rule or order adopted under this chapter. …

***

(4) The director may bring an action for restitution or damages on behalf of the persons injured by a violation of this chapter, if the court finds that private civil action would be so burdensome or expensive as to be impractical.

§ 47.  CIVIL ENFORCEMENT.  (1) Civil action instituted by director.

(a) If the director believes that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter or that a person has, is, or is about to engage in an act, practice, or course of business that materially aids a violation of this chapter or a rule adopted or order issued under this chapter, the director may maintain an action in any court of competent jurisdiction to enjoin the act, practice, or course of business and to enforce compliance with this chapter or a rule adopted or order issued under this chapter.

USA

.390(3) Whenever it appears to the director that any person who has received a permit to issue, sell, or otherwise dispose of securities under this chapter, whether current or otherwise, has become insolvent, the director may petition a court of competent jurisdiction to appoint a receiver or conservator for the defendant or the defendant's assets. The director may not be required to post a bond.

§ 47(1)(b). Whenever it appears to the director that any person who has received a permit to issue, sell, or otherwise dispose of securities under this chapter, whether current or otherwise, has become insolvent, the director may petition a court of competent jurisdiction to appoint a receiver or conservator for the defendant or the defendant's assets.

RCW 21.20.390(3) retained as § 47(1)(b).

(b) [Relief available.]  In an action under this section and on a proper showing, the court may:

(1) issue a permanent or temporary injunction, restraining order, or declaratory judgment;

(2) order other appropriate or ancillary relief, which may include:

(A) an asset freeze, accounting, writ of attachment, writ of general or specific execution, and appointment of a receiver or conservator, that may be the administrator, for the defendant or the defendant’s assets;

(B) ordering the administrator 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;

(C) imposing a civil penalty up to $[__] for a single violation or up to $[__] for more than one violation; an order of rescission, restitution, or disgorgement directed to a person that has engaged in an act, practice, or course of business constituting a violation of this [Act] or the predecessor act or a rule adopted or order issued under this [Act] or the predecessor act; and

(D) ordering the payment of prejudgment and postjudgment interest; or

(3) order such other relief as the court considers appropriate.

.390(2) …The court may grant such ancillary relief, including a civil penalty, restitution, and disgorgement, as it deems appropriate. Upon a proper showing a permanent or temporary injunction, restraining order, or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets. …If the director prevails, the director shall be entitled to a reasonable attorney's fee to be fixed by the court.

§ 47(2).  Relief available.  In an action under this section and on a proper showing, the court may:

    (a) Issue a permanent or temporary injunction, restraining order, or declaratory judgment;

    (b) 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, that may be the director, for the defendant or the defendant's assets;

        (ii) Ordering the director 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) Imposing a civil penalty; an order of rescission, restitution, or disgorgement directed to a person that has engaged in an act, practice, or course of business constituting a violation of this chapter or chapter 21.20 RCW or a rule adopted or order issued under this chapter or chapter 21.20 RCW;

        (iv) Ordering the payment of prejudgment and postjudgment interest; and

        (v) If the director prevails, awarding reasonable attorneys' fees to the director; or

    (c) Order such other relief as the court considers appropriate.

USA with additional language form current RCW 21.20.390(2) regarding attorney’s fees.

(c) [No bond required.]  The administrator may not be required to post a bond in an action or proceeding under this [Act].

.390(1) ***

The director may not be required to post a bond.

§ 47(3).  No bond required.  The director may not be required to post a bond in an action or proceeding under this chapter.

USA

§604.  ADMINISTRATIVE ENFORCEMENT. 

(a) [Issuance of an order or notice.] If the administrator determines that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this [Act] or a rule adopted or order issued under this [Act] or that a person has materially aided, is materially aiding, or is about to materially aid an act, practice, or course of business constituting a violation of this [Act] or a rule adopted or order issued under this [Act], the administrator may:        

RCW 21.20.390.  Injunction, cease and desist order, restraining order, mandamus -- Appointment of receiver or conservator for insolvent -- Restitution or damages -- Costs -- Accounting.

Whenever it appears to the director that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, the director may in his or her discretion:

§ 48.  ADMINISTRATIVE ENFORCEMENT. 

   (1) Issuance of an order or notice.  If the director determines that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter or that a person has materially aided, is materially aiding, or is about to materially aid an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter, the director may:

USA

(1) issue an order directing the person to cease and desist from engaging in the act, practice, or course of business or to take other action necessary or appropriate to comply with this [Act];

(1) Issue an order directing the person to cease and desist from continuing the act or practice and to take appropriate affirmative action within a reasonable period of time, as prescribed by the director, to correct conditions resulting from the act or practice including, without limitation, a requirement to provide restitution. . . .

§ 48(1)(a).  Issue an order directing the person to cease and desist from engaging in the act, practice, or course of business or to take other appropriate action within a reasonable time, as prescribed by the director, to correct conditions resulting from the act, practice, or course of business including, without limitation, a requirement to provide restitution;

USA with additional language to preserve current regulatory powers in RCW 21.20.390(1)

(2) issue an order denying, suspending, revoking, or conditioning the exemptions for a broker-dealer under Section 401(b)(1)(D) or (F) or an investment adviser under Section 403(b)(1)(C); or

§ 48(1)(b).  Issue an order denying, suspending, revoking, or conditioning the exemptions for a broker-dealer under section 21(2)(a) (iv) or (vi) of this act or an investment adviser under section 23(2)(a)(iii) of this act;

USA

        (3) issue an order under Section 204.

§ 48(1)(c).  Issue an order under section 11 of this act; or

USA

(6) In any action under subsection (1) of this section, the director may enter an order requiring an accounting, restitution, and disgorgement, including interest at the legal rate under RCW 4.56.110(3). The director may by rule or order provide for payments to investors, interest rates, periods of accrual, and other matters the director deems appropriate to implement this subsection.

§ 48(1)(d).  Issue an order requiring an accounting, restitution, and disgorgement, including interest at the legal rate under RCW 4.56.110(4).  The director may by rule or order provide for payments to investors, interest rates, periods of accrual, and other matters the director deems appropriate to implement this subsection.

RCW 21.20.390(6) retained at the end of  § 48(1)(b).

(b)  [Summary process.] An order under subsection (a) is effective on the date of issuance. Upon issuance of the order, the administrator shall promptly serve each person subject to the order with a copy of the order and a notice that the order has been entered.  The order must include a statement of any civil penalty or costs of investigation the administrator will seek, a statement of the reasons for the order, and notice that, within 15 days after receipt of a request in a record from the person, the matter will be scheduled for a hearing.  If a person subject to the order does not request a hearing and none is ordered by the administrator within 30 days after the date of service of the order, the order, including the imposition of a civil penalty or requirement for payment of the costs of investigation sought in a statement in the order, becomes final as to that person by operation of law.  If a hearing is requested or ordered, the administrator, after notice of and opportunity for hearing to each person subject to the order, may modify or vacate the order or extend it until final determination.

RCW 21.20.390(1).

. . . . Reasonable notice of and opportunity for a hearing shall be given. The director may issue a summary order pending the hearing which shall remain in effect until ten days after the hearing is held and which shall become final if the person to whom notice is addressed does not request a hearing within twenty days after the receipt of notice; or

§ 48(2).  Summary process.

    (a) An order under subsection (1) of this section is effective on the date of issuance.  Upon issuance of the order, the director shall give such notice of the order and of the opportunity for a hearing pursuant to chapter 34.05 RCW as is practicable to persons who are required to comply with the order.  The order must comply with the adjudicative proceedings provisions of chapter 34.05 RCW.

    (b) If a person subject to the order does not request a hearing and none is ordered by the director within twenty days after the date of service of the order, the order, including the imposition of a civil penalty or requirement for payment of the costs of investigation sought in a statement in the order, becomes final as to that person by operation of law.  If a hearing is requested or ordered, the director, after notice of and opportunity for hearing to each person subject to the order, may modify or vacate the order or extend it until final determination.

USA with amendments following the Washington APA.

(c) [Procedure for final order.]  If a hearing is requested or ordered pursuant to subsection (b), a hearing must be held [pursuant to the state administrative procedure act].  A final order may not be issued unless the administrator makes findings of fact and conclusions of law in a record  [in accordance with the state administrative procedure act].  The final order may make final, vacate, or modify the order issued under subsection (a).

§ 48(3).  Procedure for final order.  If a hearing is requested or ordered pursuant to subsection (2) of this section, a hearing must be held pursuant to the adjudicative proceedings provisions of chapter 34.05 RCW.  A final order may not be issued unless the director makes findings of fact and conclusions of law in a record in accordance with the adjudicative proceedings provisions of chapter 34.05 RCW.  The final order may make final, vacate, or modify the order issued under subsection (1) of this section.

USA, with references to APA

(d) [Civil penalty.] In a final order under subsection (c), the administrator may impose a civil penalty up to $[    ] for a single violation or up to $[   ] for more than one violation.

RCW 21.20.395  Administrative action -- Hearing -- Judicial review -- Judgment.

(1) A person who, in an administrative action by the director, is found to have knowingly or recklessly violated any provision of this chapter, or any rule or order under this chapter, may be fined, after notice and opportunity for hearing, in an amount not to exceed ten thousand dollars for each violation.

(2) A person who, in an administrative action by the director, is found to have knowingly or recklessly violated an administrative order issued under RCW 21.20.110 or 21.20.390 shall pay an administrative fine in an amount not to exceed twenty-five thousand dollars for each violation.

(3) The fines paid under subsections (1) and (2) of this section shall be deposited into the securities prosecution fund.

§ 48(4).  Civil penalty.  In a final order under subsection (3) of this section, the director may impose a civil penalty up to ten thousand dollars for each violation.  A person who, in an administrative action by the director, is found to have knowingly or recklessly violated an administrative order issued under subsection (3) of this section or section 32 of this act shall pay an administrative fine in an amount not to exceed twenty-five thousand dollars for each violation.

USA with additional language following current fining structure of RCW 21.20.395.

(e) [Costs.] In a final order, the administrator may charge the actual cost of an investigation or proceeding for a violation of this [Act] or a rule adopted or order issued under this [Act].

RCW 21.20.390

(5) In any action under this section, the director may charge the costs, fees, and other expenses incurred by the director in the conduct of any administrative investigation, hearing, or court proceeding against any person found to be in violation of any provision of this section or any rule or order adopted under this section.

§ 48(5).  Costs.  In any action under this section, the director may charge the costs, fees, and other expenses incurred by the director in the conduct of any administrative investigation, hearing, or court proceeding against any person found to be in violation of any provision of this section or any rule or order adopted under this section.

RCW 21.20.390(5) retained.

(f) [Filing of certified final order with court; effect of filing.] If a petition for judicial review of a final order is not filed in accordance with Section 609, the administrator may file a certified copy of the final order with the clerk of a court of competent jurisdiction.  The order so filed has the same effect as a judgment of the court and may be recorded, enforced, or satisfied in the same manner as a judgment of the court.

RCW 21.20.395

(4) If a petition for judicial review has not been timely filed under RCW 34.05.542(2), a certified copy of the director's order requiring payment of the fine may be filed in the office of the clerk of the superior court in any county of this state. The clerk shall treat the order of the director in the same manner as a judgment of the superior court. The director's order so filed has the same effect as a judgment of the superior court and may be recorded, enforced, or satisfied in like manner.

§ 48(6).  Filing of certified final order with court; effect of filing.  If a petition for judicial review of a final order is not filed in accordance with section 53 of this act, the director may file a certified copy of the final order with the clerk of a court of competent jurisdiction.  The order so filed has the same effect as a judgment of the court and may be recorded, enforced, or satisfied in the same manner as a judgment of the court.

USA

(g) [Enforcement by court; further civil penalty.] If a person does not comply with an order under this section, the administrator may petition a court of competent jurisdiction to enforce the order.  The court may not require the administrator to post a bond in an action or proceeding under this section.  If the court finds, after service and opportunity for hearing, that the person was not in compliance with the order, the court may adjudge the person in civil contempt of the order.  The court may impose a further civil penalty against the person for contempt in an amount not less than $[   ] but not greater than $[   ] for each violation and may grant any other relief the court determines is just and proper in the circumstances.

See RCW 21.20.390(2) (addressing inter alia civil actions for compliance w/orders)

§ 48(7).  Enforcement by court; further civil penalty.  If a person does not comply with an order under this section, the director may petition a court of competent jurisdiction to enforce the order.  The court may not require the director to post a bond in an action or proceeding under this section.  If the court finds, after service and opportunity for hearing, that the person was not in compliance with the order, the court may adjudge the person in civil contempt of the order.  The court may impose a further civil penalty against the person for contempt in an amount determined by the court for each violation and may grant any other relief the court determines is just and proper in the circumstances.

USA, with language allowing the court to determine an appropriate civil penalty, consistent with current practice.

§605.  RULES, FORMS, ORDERS, INTERPRETIVE OPINIONS, AND HEARINGS.  (a) [Issuance and adoption of forms, orders, and rules.]  The administrator may:

(1) issue forms and orders and, after notice and comment, may adopt and amend rules necessary or appropriate to carry out this [Act] and may repeal rules, including rules and forms governing registration statements, applications, notice filings, reports, and other records;

(2) by rule, define terms, whether or not used in this [Act], but those definitions may not be inconsistent with this [Act]; and

            (3) by rule, classify securities, persons, and transactions and adopt different requirements for different classes.

RCW 21.20.450  Administration of chapter -- Rules and forms, publication -- Cooperation with other state and federal authorities.

(1) The administration of the provisions of this chapter shall be under the department of financial institutions. The director may from time to time make, amend, and repeal such rules, forms, and orders as are necessary to carry out the provisions of this chapter, including rules defining any term, whether or not such term is used in the Washington securities law. The director may classify securities, persons, and matters within the director's jurisdiction, and prescribe different requirements for different classes. . . .

§ 49(1).  RULES, FORMS, ORDERS, INTERPRETIVE OPINIONS, AND HEARINGS.  (1) Issuance and adoption of forms, orders, and rules.  The director may:

    (a) Issue forms and orders and, in accordance with chapter 34.05 RCW, adopt or amend rules necessary or appropriate to carry out this chapter and repeal rules, including rules and forms governing registration statements, applications, notice filings, reports, and other records;

    (b) By rule, define terms, whether or not used in this chapter, but those definitions may not be inconsistent with this chapter; and

    (c) By rule, classify securities, persons, and transactions and adopt different requirements for different classes.

USA with reference to Washington administrative procedure.

(b) [Findings and cooperation.] Under this [Act], a rule or form may not be adopted or amended, or an order issued or amended, unless the administrator finds that the rule, form, order, or amendment is necessary or appropriate in the public interest or for the protection of investors and is consistent with the purposes intended by this [Act].  In adopting, amending, and repealing rules and forms, Section 608 applies in order to achieve uniformity among the States and coordination with federal laws in the form and content of registration statements, applications, reports, and other records, including the adoption of uniform rules, forms, and procedures.

RCW 21.20.450(1) . . . .  No rule, form, or order may be made unless the director 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 this chapter. In prescribing rules and forms the director may cooperate with the securities administrators of the other states and the securities and exchange commission with a view to effectuating the policy of this statute to achieve maximum uniformity in the form and content of registration statements, applications, and reports wherever practicable. All rules and forms of the director shall be published.

§ 49(2).  Findings and cooperation.  Under this chapter, a rule or form may not be adopted or amended, or an order issued or amended, unless the director finds that the rule, form, order, or amendment is necessary or appropriate in the public interest or for the protection of investors and is consistent with the purposes intended by this chapter.  In adopting, amending, and repealing rules and forms, section 52 of this act applies in order to achieve uniformity among the states and coordination with federal laws in the form and content of registration statements, applications, reports, and other records, including the adoption of uniform rules, forms, and procedures.

USA

(c) [Financial statements.] Subject to Section 15(h) of the Securities Exchange Act and Section 222 of the Investment Advisers Act of 1940, the administrator may require that a financial statement filed under this [Act] be prepared in accordance with generally accepted accounting principles in the United States and comply with other requirements specified by rule adopted or order issued under this [Act].  A rule adopted or order issued under this [Act] may establish:

(1) subject to Section 15(h) of the Securities Exchange Act and Section 222 of the Investment Advisors Act of 1940, the form and content of financial statements required under this [Act];

(2) whether unconsolidated financial statements must be filed; and

(3) whether required financial statements must be audited by an independent certified public accountant.

§ 49(3).  Financial statements.  Subject to Section 15(h) of the Securities Exchange Act and Section 222 of the Investment Advisers Act of 1940, the director may require that a financial statement filed under this chapter be prepared in accordance with generally accepted accounting principles in the United States, or other recognized method of accounting, and comply with other requirements specified by rule adopted or order issued under this chapter.  A rule adopted or order issued under this chapter may establish:

    (a) Subject to Section 15(h) of the Securities Exchange Act and Section 222 of the Investment Advisers Act of 1940, the form and content of financial statements required under this chapter;

    (b) Whether unconsolidated financial statements must be filed; and

    (c) Whether required financial statements must be audited by an independent certified public accountant.

USA with additional language to allow statutory accounting.

(d) [Interpretative opinions.]  The administrator may provide interpretative opinions or issue determinations that the administrator will not institute a proceeding or an action under this [Act] against a specified person for engaging in a specified act, practice, or course of business if the determination is consistent with this [Act].  A rule adopted or order issued under this [Act] may establish a reasonable charge for interpretative opinions or determinations that the administrator will not institute an action or a proceeding under this [Act].

RCW 21.20.530  Interpretative opinions by director.

The director in his or her discretion may honor requests from interested persons for interpretative opinions.

RCW 21.20.340  Fees

(12) For rendering interpretative opinions, the fee shall be thirty-five dollars.

§ 49(4).  Interpretive opinions.  The director, in his or her discretion, may provide interpretive opinions or issue determinations that the director will not institute a proceeding or an action under this chapter against a specified person for engaging in a specified act, practice, or course of business if the determination is consistent with this chapter.  The fee for requesting an interpretive opinion or determination under this section shall be thirty-five dollars.  A rule adopted or order issued under this chapter may establish procedures for requesting interpretive opinions or determinations that the director will not institute an action or a proceeding under this chapter.

USA with additional language to clarify that such opinions are discretionary, to establish a fee consistent with current RW 21.20.340(12), and to allow Director to establish procedures for requesting interpretative opinions (as in current WAC 460-16A-020).

(e) [Effect of compliance.]  A penalty under this [Act] may not be imposed for, and liability does not arise from conduct that is engaged in or omitted in good faith believing it conforms to a rule, form, or order of the administrator under this [Act].

RCW 21.20.490  No liability under chapter for act in good faith.

No provision of this chapter imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form, or order of the director, notwithstanding that the rule or form may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason.

§ 49(5).  Effect of compliance.  A penalty under this chapter may not be imposed for, and liability does not arise from, conduct that is engaged in or omitted in good faith in conformity with a rule, form, or order of the director under this chapter.

USA

(f) [Presumption for public hearings.] A hearing in an administrative proceeding under this [Act] must be conducted in public unless the administrator for good cause consistent with this [Act] determines that the hearing will not be so conducted.

RCW 21.20.500  Administrative hearings public -- Exception.

Every hearing in an administrative proceeding shall be public unless the director in his or her discretion grants a request joined in by all the respondents that the hearing be conducted privately.

§ 49(6).  Presumption for public hearings.  A hearing in an administrative proceeding under this chapter must be conducted in public unless the director for good cause consistent with this chapter determines that the hearing will not be so conducted.

USA

§606.  ADMINISTRATIVE FILES AND OPINIONS.

            (a) [Public register of filings.] The administrator shall maintain, or designate a person to maintain, a register of applications for registration of securities; registration statements; notice filings; applications for registration of broker-dealers, agents, investment advisers, and investment adviser representatives; notice filings by federal covered investment advisers that are or have been effective under this [Act] or the predecessor act; notices of claims of exemption from registration or notice filing requirements contained in a record; orders issued under this [Act]  or the predecessor act; and interpretative opinions or no action determinations issued under this [Act].

RCW 21.20.510  Document filed when received -- Register -- Inspection of register, information, etc.

A document is filed with the director when it is received by the director or by a person as the director designates by rule or order. The director or the director's designee shall keep a register of all applications for registration and registration statements which are or have ever been effective under this chapter and all denial, suspension, or revocation orders which have ever been entered under this chapter. The register shall be open for public inspection. The information contained in or filed with any registration statement, application, or report may be made available to the public under such rules as the director prescribes.

§ 50.  ADMINISTRATIVE FILES AND OPINIONS.

    (1) Public register of filings.  The director shall maintain, or designate a person to maintain, a register of applications for registration of securities; registration statements; notice filings; applications for registration of broker-dealers, sales agents, investment advisers, and investment adviser representatives; notice filings by federal covered investment advisers that are or have been effective under this chapter or chapter 21.20 RCW; notices of claims of exemption from registration or notice filing requirements contained in a record; orders issued under this chapter or chapter 21.20 RCW; and interpretive opinions or no action determinations issued under this chapter.

USA

(b) [Public availability.] The administrator shall make all rules, forms, interpretative opinions, and orders available to the public.

RCW 21.20.450(1) . . . .  All rules and forms of the director shall be published.

§ 50(2).  Public availability.  The director shall make all rules, forms, interpretive opinions, and orders available to the public.

USA

(c) [Copies of public records.] The administrator shall furnish a copy of a record that is a public record or a certification that the public record does not exist to a person that so requests.  A rule adopted under this [Act] may establish a reasonable charge for furnishing the record or certification.  A copy of the record certified or a certificate by the administrator of a record’s nonexistence is prima facie evidence of a record or its nonexistence.

RCW 21.20.520  Copies of entries, documents to be furnished -- Copies as prima facie evidence.

Upon request and at such reasonable charges as the director prescribes, the director shall furnish to any person photostatic or other copies (certified under his seal of office if requested) of any entry in the register or any document which is a matter of public record. In any proceeding or prosecution under this chapter, any copy so certified is prima facie evidence of the contents of the entry or document certified.

§ 50(3).  Copies of public records.  (a) The director, in response to a request from a person, shall:

        (i) Furnish a copy of a record that is a public record;

        (ii) Certify the records furnished under (a)(i) of this subsection;

        (iii) Certify that records have been searched and that a requested record was not located; or

        (iv) Certify whether, according to records maintained by the director, a person is or was registered under this chapter and the dates of such registration.

    (b) A rule adopted under this chapter may establish a reasonable charge for furnishing the record or certification.

    (c) A copy of the record certified by the director under (a)(ii) of this subsection is prima facie evidence of a record.  A certificate by the director under (a)(iii) of this subsection is prima facie evidence that the requested record was not located within the director's records as of the date of the certification.  A certificate by the director under (a)(iv) of this subsection is prima facie evidence of the person's registration status as of the dates stated on the certificate.

USA language modified to conform to current practices regarding public records.

§607.  PUBLIC RECORDS; CONFIDENTIALITY.  (a) [Presumption of public records.]  Except as otherwise provided in subsection (b), records obtained by the administrator or filed under this [Act], including a record contained in or filed with a registration statement, application, notice filing, or report, are public records and are available for public examination.

APA/PRA

§ 51(1).  PUBLIC RECORDS; CONFIDENTIALITY.  (1) Public records.  Except as otherwise provided in subsection (2) of this section, records obtained by the director or filed under this chapter, including a record contained in or filed with a registration statement, application, notice filing, or report, are public records subject to chapter 42.56 RCW and are available for public inspection and copying.

USA with language conforming to current Washington public records law.

(b) [Nonpublic records.tc \l2 "Nonpublic records.]  The following records are not public records and are not available for public examination under subsection (a):

(1) a record obtained by the administrator in connection with an audit or inspection under Section 411(d) or an investigation under Section 602;

(2) a part of a record filed in connection with a registration statement under Sections 301 and 303 through 305 or a record under Section 411(d) that contains trade secrets or confidential information if the person filing the registration statement or report has asserted a claim of confidentiality or privilege that is authorized by law;

(3) a record that is not required to be provided to the administrator or filed under this [Act] and is provided to the administrator only on the condition that the record will not be subject to public examination or disclosure;

(4) a nonpublic record received from a person specified in Section 608(a); [and]

(5) any social security number, residential address unless used as a business address, and residential telephone number unless used as a business telephone number, contained in a record that is filed [; and

(6) a record obtained by the administrator through a designee of the administrator that a rule or order under this [Act] determines has been:

(A) expunged from the administrator’s records by the designee; or

(B) determined to be nonpublic or nondisclosable by that designee if the administrator finds the determination to be in the public interest and for the protection of investors].

APA/PRA

§ 51(2).  Exempt records.  The following records and information are exempt from public inspection and copying under chapter 42.56 RCW:

            (a) Reports, working papers, documents, materials, or information produced by, obtained by, or disclosed to the director in connection with an audit or inspection under section 31(4) of this act or an examination under section 46(7) of this act;

            (b) Documents, materials, or information, which is either confidential, privileged, or both, which has been provided to the director by a person specified in section 52(1) of this act, if the documents, materials, or information is protected from disclosure by the applicable laws of the jurisdiction that is the source of the document, material, or information; and

(c) Any social security number, residential address unless used as a business address, residential telephone number unless used as a business telephone number, or other sensitive personal and financial identifying numbers contained in a record that is filed.

USA conformed to current Washington law:

USA examination and regulatory/law enforcement exemptions clarified by language following recent OIC exemptions.

USA confidential registration information, whistleblower, and expungement exemptions not included. 

USA privacy exemption conformed to consistent the Executive Order 00-02.

    (c) [Administrator discretion to disclose.] If disclosure is for the purpose of a civil, administrative, or criminal investigation, action, or proceeding or to a person specified in Section 608(a), the administrator may disclose a record obtained in connection with an audit or inspection under Section 411(d) or a record obtained in connection with an investigation under Section 602.

§ 51(3).  Director discretion to disclose.  The director may disclose a record otherwise exempt under this section if disclosure is necessary or appropriate in the public interest or for the protection of investors.

USA with language to address other exemptions and current Washington law.

§608.  UNIFORMITY AND COOPERATION WITH OTHER AGENCIES.

(a) [Objective of uniformity.] The administrator shall, in its discretion, cooperate, coordinate, consult, and, subject to Section 607, share records and information with the securities regulator of another State, Canada, a Canadian province or territory, a foreign jurisdiction, the Securities and Exchange Commission, the United States Department of Justice, the Commodity Futures Trading Commission, the Federal Trade Commission, the Securities Investor Protection Corporation, a self-regulatory organization, a national or international organization of securities regulators, a federal or state banking and insurance regulator, and a governmental law enforcement agency to effectuate greater uniformity in securities matters among the federal government, self-regulatory organizations, States, and foreign governments.

RCW 21.20.450  Administration of chapter -- Rules and forms, publication -- Cooperation with other state and federal authorities.

 (2) To encourage uniform interpretation and administration of this chapter and effective securities regulation and enforcement, the director may cooperate with the securities agencies or administrators of one or more states, Canadian provinces or territories, or another country, 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

§ 52(1).  UNIFORMITY AND COOPERATION WITH OTHER AGENCIES.  (1) Objective of uniformity.  The director shall, in his or her discretion, cooperate, coordinate, consult, and, subject to section 51 of this act, share records and information with the securities regulator of another state, Canada, a Canadian province or territory, a foreign jurisdiction, the Securities and Exchange Commission, the United States Department of Justice, the Commodity Futures Trading Commission, the Federal Trade Commission, the Securities Investor Protection Corporation, a self-regulatory organization, a national or international organization of securities regulators, a federal or state banking and insurance regulator, and a governmental law enforcement agency to effectuate greater uniformity in securities matters among the federal government, self-regulatory organizations, states, and foreign governments.

USA

(b) [Policies to consider.] In cooperating, coordinating, consulting, and sharing records and information under this section and in acting by rule, order, or waiver under this [Act], the administrator shall, in its discretion, take into consideration in carrying out the public interest the following general policies:

(1) maximizing effectiveness of regulation for the protection of investors;

(2) maximizing uniformity in federal and state regulatory standards; and

(3) minimizing burdens on the business of capital formation, without adversely affecting essentials of investor protection.

RCW 21.20.900  Construction to secure uniformity.

This chapter shall be so construed as to effectuate its general purpose to make uniform the law of those states which enact it and to coordinate the interpretation and administration of this chapter with the related federal regulation.

§ 52(2).  Policies to consider.  In cooperating, coordinating, consulting, and sharing records and information under this section and in acting by rule, order, or waiver under this chapter, the director may, in his or her discretion in carrying out the public interest, take into consideration the following general policies:

    (a) Maximizing effectiveness of regulation for the protection of investors;

    (b) Maximizing uniformity in federal and state regulatory standards, without materially adversely affecting investor protection; and

    (c) Minimizing burdens on the business of capital formation, without materially adversely affecting investor protection.

USA with modifications to clarify that the provision is discretionary and the general policies to consider.

(c) [Subjects for cooperation.] The cooperation, coordination, consultation, and sharing of records and information authorized by this section includes:

(1) establishing or employing one or more designees as a central depository for registration and notice filings under this [Act] and for records required or allowed to be maintained under this [Act];

(2) developing and maintaining uniform forms;

(3) conducting a joint examination or investigation;

(4) holding a joint administrative hearing;

(5) instituting and prosecuting a joint civil or administrative proceeding;

(6) sharing and exchanging personnel;

(7) coordinating registrations under Sections 301 and 401 through 404 and exemptions under Section 203;

(8) sharing and exchanging records, subject to Section 607;

(9) formulating rules, statements of policy, guidelines, forms, and interpretative opinions and releases;

(10) formulating common systems and procedures;

(11) notifying the public of proposed rules, forms, statements of policy, and guidelines;

(12) attending conferences and other meetings among securities regulators, which may include representatives of governmental and private sector organizations involved in capital formation, deemed necessary or appropriate to promote or achieve uniformity; and

(13) developing and maintaining a uniform exemption from registration for small issuers, and taking other steps to reduce the burden of raising investment capital by small businesses.

(3) The cooperation authorized by subsection (2) of this section includes:

(a) Establishing a central depository for licensing or registration under this chapter and for documents or records required or allowed to be maintained under this chapter;

(b) Making a joint license or registration examination or investigation;

(c) Holding a joint administrative hearing;

(d) Filing and prosecuting a joint civil or administrative hearing;

(e) Sharing and exchanging personnel;

(f) Sharing and exchanging information and documents; and

(g) Formulating under chapter 34.05 RCW, rules or proposed rules on matters such as statements of policy, guidelines, and interpretative opinions

§ 52(3).  Subjects for cooperation.  The cooperation, coordination, consultation, and sharing of records and information authorized by this section includes:

   (a) Establishing or employing one or more designees as a central depository for registration and notice filings under this chapter and for records required or allowed to be maintained under this chapter;

   (b) Developing and maintaining uniform forms;

   (c) Conducting a joint examination or investigation;

   (d) Holding a joint administrative hearing;

   (e) Instituting and prosecuting a joint civil or administrative proceeding;

   (f) Sharing and exchanging personnel;

   (g) Coordinating registrations under sections 13 and 21 through 24 of this act and exemptions under section 10 of this act;

   (h) Sharing and exchanging records, subject to section 51 of this act;

   (i) Formulating rules, statements of policy, guidelines, forms, and interpretive opinions and releases;

   (j) Formulating common systems and procedures;

   (k) Notifying the public of proposed rules, forms, statements of policy, and guidelines;

   (l) Attending conferences and other meetings among securities regulators, which may include representatives of governmental and private sector organizations involved in capital formation, deemed necessary or appropriate to promote or achieve uniformity; and

   (m) Developing and maintaining a uniform exemption from registration for small issuers, and taking other steps to reduce the burden of raising investment capital by small businesses.

USA

RCW 21.20.925 Judicial review of prior administrative orders.

Judicial review of all administrative orders as to which review proceedings have not been instituted by the *effective date of this chapter are governed by RCW 21.20.440 except that no review proceeding may be instituted unless the petition is filed within any period of limitation which applied to a review proceeding when the order was entered and in any event within sixty days after the *effective date of this chapter

USA (eliminating RCW 21.20.925).  See also USA § 703.

§609.  JUDICIAL REVIEW.  (a) [Judicial review of orders.] A final order issued by the administrator under this [Act] is subject to judicial review in accordance with [the state administrative procedure act].

[(b) [Judicial review of rules.] A rule adopted under this [Act] is subject to judicial review in accordance with [the state administrative procedure act].]

RCW 21.20.440  Judicial review of order -- Modification of order by director on additional evidence.

Any person aggrieved by a final order of the director may obtain a review of the order in the county in which that person resides or in any other court of competent jurisdiction by filing in court, within sixty days after the entry of the order, a written petition praying that the order be modified or set aside in whole or in part. A copy of the petition shall be forthwith served upon the director, and thereupon the director shall certify and file in court a copy of the filing, testimony, and other evidence upon which the order was entered. When these have been filed, the court has exclusive jurisdiction to affirm, modify, enforce, or set aside the order, in whole or in part. No objection to the order may be considered by the court unless it was urged before the director or there were reasonable grounds for failure to do so. The findings of the director as to the facts, if supported by substantial evidence, are conclusive. If either party applies to the court for leave to adduce additional evidence, and shows to the satisfaction of the court that the additional evidence is material and that there were reasonable grounds for failure to adduce the evidence in the hearing before the director, the court may order the additional evidence to be taken before the director and to be adduced upon the hearing in such manner and upon such conditions as the court may consider proper. The director may modify his or her findings by reason of the additional evidence so taken; and the director shall file any modified or new findings, which if supported by substantial evidence shall be conclusive, and any recommendation for the modification or setting aside of the original order. The commencement of proceedings under this section does not, unless specifically ordered by the court, operate as a stay of the director's order.

§ 53.  JUDICIAL REVIEW OF ORDERS.  A final order issued by the director under this chapter is subject to judicial review in accordance with chapter 34.05 RCW.

USA less § 609(b).

§610.  JURISDICTION.  (a) [Sales and offers to sell.] Sections 301, 302, 401(a), 402(a), 403(a), 404(a), 501, 506, 509, and 510 do not apply to a person that sells or offers to sell a security unless the offer to sell or the sale is made in this State or the offer to purchase or the purchase is made and accepted in this State.

            (b) [Purchases and offers to purchase.]  Sections 401(a), 402(a), 403(a), 404(a), 501, 506, 509, and 510 do not apply to a person that purchases or offers to purchase a security unless the offer to purchase or the purchase is made in this State or the offer to sell or the sale is made and accepted in this State.

Division draft does not adopt § 610. 

(c) [Offers in this State.]  For the purpose of this section, an offer to sell or to purchase a security is made in this State, whether or not either party is then present in this State, if the offer:

(1) originates from within this State; or

(2) is directed by the offeror to a place in this State and received at the place to which it is directed.

Division draft does not adopt § 610. 

(d) [Acceptances in this State.]  For the purpose of this section, an offer to purchase or to sell is accepted in this State, whether or not either party is then present in this State, if the acceptance:

(1) is communicated to the offeror in this State and the offeree reasonably believes the offeror to be present in this State and the acceptance is received at the place in this State to which it is directed; and

(2) has not previously been communicated to the offeror, orally or in a record, outside this State.

Division draft does not adopt § 610. 

(e) [Publications, radio, television, or electronic communications.]  An offer to sell or to purchase is not made in this State when a publisher circulates or there is circulated on the publisher’s behalf in this State a bona fide newspaper or other publication of general, regular, and paid circulation that is not published in this State, or that is published in this State but has had more than two thirds of its circulation outside this State during the previous 12 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.

Division draft does not adopt § 610. 

(f) [Investment advice and misrepresentations.]   Sections 403(a), 404(a), 405(a), 502, 505, and 506 apply to a person if the person engages in an act, practice, or course of business instrumental in effecting prohibited or actionable conduct in this State, whether or not either party is then present in this State.

Division draft does not adopt § 610. 

§ 611.  SERVICE OF PROCESS.  (a) [Signed consent to service of process.]  A consent to service of process complying with  this Section required by this [Act] must be signed and filed in the form required by a rule or order under this [Act].   A consent appointing the administrator the person’s agent for service of process in a noncriminal action or proceeding against the person, or the person’s successor or personal representative under this [Act] or a rule adopted or order issued under this [Act] after the consent is filed, has the same force and validity as if the service were made personally on the person filing the consent.  A person that has filed a consent complying with this subsection in connection with a previous application for registration or notice filing need not file an additional consent.

RCW 21.20.330  Consent to service of process -- Service, how made.

Every applicant for registration as a broker-dealer, investment adviser, investment adviser representative, or salesperson under this chapter, every issuer that files an application to register or files a claim of exemption from registration to offer a security in this state through any person acting on an agency basis in the common law sense, and every person filing pursuant to RCW 21.20.050 or 21.20.327 shall file with the director or with such person as the director may by rule or order designate, in such form as the director by rule prescribes, an irrevocable consent appointing the director or the director's successor in office to be the attorney of the applicant to receive service of any lawful process in any noncriminal suit, action, or proceeding against the applicant or the applicant's successor, executor or administrator which arises under this chapter or any rule or order hereunder 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, or notice filing pursuant to RCW 21.20.050 or 21.20.327, need not file another.

§ 54(1).  SERVICE OF PROCESS.  (1) Signed consent to service of process.  A consent to service of process required by this chapter must comply with this section and be signed and filed in a form required by the director.  The consent may be included in a form promulgated by the Securities and Exchange Commission or other federal or state agency or self-regulatory organization.  The consent shall appoint the director as the person's agent for service of process in a noncriminal action or proceeding under this chapter brought against the person, or the person's successor or personal representative, after the consent is filed.  Service on the director pursuant to the consent has the same force and validity as if the service were made personally on the person filing the consent.  Service on the director pursuant to the consent is not the exclusive means of service on the person filing the consent.  A person that has filed a consent complying with this subsection in connection with a previous application for registration or notice filing need not file an additional consent.

USA with additional language clarifying the form of the consent and the effect of service.

(b) [Conduct constituting appointment of agent for service.] If a person, including a nonresident of this State, engages in an act, practice, or course of business prohibited or made actionable by this [Act] or a rule adopted or order issued under this [Act] and the person has not filed a consent to service of process under subsection (a), the act, practice, or course of business constitutes the appointment of the administrator as the person’s agent for service of process in a noncriminal action or proceeding against the person or the person’s successor or personal representative.

§ 54(2).  Conduct constituting appointment of agent for service.  If a person, including a nonresident of this state, engages in an act, practice, or course of business prohibited or made actionable by this chapter or a rule adopted or order issued under this chapter and the person has not filed a consent to service of process under subsection (1) of this section, the act, practice, or course of business constitutes the appointment of the director as the person's agent for service of process in a noncriminal action or proceeding against the person or the person's successor or personal representative.

USA

(c) [Procedure for service of process.]  Service under subsection (a) or (b) may be made by providing a copy of the process to the office of the administrator, but it is not effective unless:

(1) the plaintiff, which may be the administrator, promptly sends notice of the service and a copy of the process, return receipt requested, to the defendant or respondent at the address set forth in the consent to service of process or, if a consent to service of process has not been filed, at the last known address, or takes other reasonable steps to give notice; and

(2) the plaintiff files an affidavit of compliance with this subsection in the action or proceeding on or before the return day of the process, if any, or within the time that the court, or the administrator in a proceeding before the administrator, allows.

RCW 21.20.330  Consent to service of process – Service, how made.

Service may be made by leaving a copy of the process in the office of the director, but it is not effective unless

(1) the plaintiff, who may be the director in a suit, action, or proceeding instituted by him or her, forthwith sends notice of the service and a copy of the process by registered mail to the defendant or respondent at the last address of the respondent or defendant on file with the director, and

(2) the plaintiff's affidavit of compliance with this section 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.

§ 54(3).  Procedure for service of process.  Service under subsection (1) or (2) of this section may be made by providing a copy of the process to the office of the director, but it is not effective unless:

    (a) The plaintiff, which may be the director, promptly sends notice of the service and a copy of the process, return receipt requested, to the defendant or respondent at the address set forth in the consent to service of process or, if a consent to service of process has not been filed, at the last known address, or takes other reasonable steps to give notice; and

(b) The plaintiff files an affidavit of compliance with this subsection in the action or proceeding on or before the return day of the process, if any, or within the time that the court, or the director in a proceeding before the director, allows.

USA

(d) [Service in administrative proceedings or civil actions by administrator.]   Service pursuant to subsection (c) may be used in a proceeding before the administrator or by the administrator in a civil action in which the administrator is the moving party.

§ 54(4).  Service in administrative proceedings or civil actions by director.  Service pursuant to subsection (3) of this section may be used in a proceeding before the director or by the director in a civil action in which the director is the moving party.

USA

(e) [Opportunity to defend.]  If process is served under subsection (c), the court, or the administrator in a proceeding before the administrator, shall order continuances as are necessary or appropriate to afford the defendant or respondent reasonable opportunity to defend.

§ 54(5).  Opportunity to defend.  If process is served under subsection (3) of this section, the court, or the director in a proceeding before the director, shall order continuances as are necessary or appropriate to afford the defendant or respondent reasonable opportunity to defend.

USA

§612.  SEVERABILITY CLAUSE.  If any provision of this [Act] or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this [Act] that can be given effect without the invalid provision or application, and to this end the provisions of this [Act] are severable.

RCW 21.20.905 Severability -- 1959 c 282.

If any provision of this chapter or the application thereof to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of the chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.

§ 112.  If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

USA approach in style of Washington codification.

RCW 21.20.340  Fees -- Disposition.

The following fees shall be paid in advance under the provisions of this chapter… All fees collected under this chapter shall be turned in to the state treasury and are not refundable, except as herein provided.

RCW 21.20.275  Pending registration -- Notice of termination -- Application for continuation.

The director may in his or her discretion send notice to the registrant in any pending registration in which no action has been taken for nine months immediately prior to the sending of such notice, advising such registrant that the pending registration will be terminated thirty days from the date of sending unless on or before the termination date the registrant makes application in writing to the director showing good cause why it should be continued as a pending registration. If such application is not made or good cause shown, the director shall terminate the pending registration.

§ 55.  FEES SHALL BE PAID IN ADVANCE--REFUNDABILITY--TERMINATION OF PENDING REGISTRATIONS.  (1) The fees required by this chapter shall be paid in advance and are not refundable except as may be expressly provided by other sections of this chapter.

(2) The director may in his or her discretion send notice to the applicant in any pending registration in which no action has been taken for six months immediately prior to the sending of such notice, advising such registrant that the pending registration will be terminated thirty days from the date of sending unless on or before the termination date the applicant makes application in writing to the director showing good cause why it should be continued as a pending registration.  If such application is not made or good cause is not shown, the director shall terminate the pending registration.

RCW 21.20.340 and .275 are retained, addressing paying fees in advance, fee refundability, and termination of applications with no current action.

§ 56.  Sections 45 through 56 are codified with the subchapter heading of “Administration and Judicial Review.”

Code reviser instructions.