Initiation of Formal Adjudicatory Proceedings

(a) Commencement of Adjudicatory Proceeding. The Division may commence an Adjudicatory Proceeding by filing in writing a Notice of Adjudicatory Proceeding signed by the Director or other duly designated person acting in that capacity and an Administrative Complaint. (b) Form and Content. The Administrative Complaint shall state clearly and concisely the facts which are grounds for the proceeding, the relief sought, and any additional information required by applicable statutes and regulations. The Noticeshall inform the party or parties named of their right to request an administrative hearing in the time prescribed by this regulation. (c) Temporary order to cease and desist. Simultaneous with the commencement of an adjudicatory proceeding or at any time thereafter until conclusion of the proceeding, the Division may request a temporary order to cease and desist from the Presiding Officer. The request may be made ex parte. The request for a temporary order to cease and desist shall contain a statement setting forth the basis for such request, including, the likely irreparable harm to the public interest which would result if such an order were not issued. The statement may be made in an affirmation filed by the Division and supported by facts contained in the Administrative Complaint and supporting papers. Unless otherwise provided, the order must be served within 24 hours of the time of its signing. The order must notify the Party subject to the order of his right to request an administrative hearing and that such hearing must be set down within 20 days after receipt by the Division of the request for hearing to determine if the order shall become permanent and final. (d) Summary Suspension or Postponement of Registration of Broker-Dealer or Agent; Summary Suspension or Postponement of Effectiveness of Registration Statement; Summary Denial or Revocation of Exemption from Registration. Simultaneous with the commencement of an adjudicatory proceedingor at anytime thereafter until conclusion of the proceeding, the Presiding Officer may, upon motion of the Division or upon his or her own motion, summarily suspend or postpone the registration of a broker/dealer or agent, summarily suspend or postpone the effectiveness of a registation statement orsummarilydenyorrevokeanexemption from registration. A motion may be made ex parte. The order of suspension, postponement, denial or revocation shallset forththe basis for the Order, including specific findings on the need for ex parte order, if required by law. If a registration of broker/dealer is at issue, the order shall provide for notice to the applicant or registrant; if the applicant or registrant is an agent, notice to the agent and the employer, or prospective employer of the agent; if a registration statement or exemption from registration is at issue, notice to interested parties of the right to request a hearing and that such hearingwillbe set down within fifteen days of receiptof written request for hearing. The Presiding Officer may also order a hearing upon Motion of the Division or upon his or her own motion. (e) Answer. Within 21 days of service of the Notice of Adjudicatory Hearing and Administrative Complaint, the Respondent shall file an answer to it. Failure to answer timely will be considered a default and may result in the entry of a default judgment or such other action as the Presiding Officer may deem appropriate. (f) FormofAnswer. The Answer shall contain full, direct and specific answers to each claim set forth in the Administrative Complaint admitting, denying, or explaining material facts. If there is insufficient knowledge to answer with specificity, it shallso be stated and, thus, shall be treated as a denialofthe claim. The Answer shall contain all affirmative defenses which are relied upon and shall cite the statute(s) and/or regulation(s) which form the basis of each defense. Failure to answer in the manner set forth above may result in the allegations set forth in the Administrative Complaint being deemed as admitted or such other actions as the Presiding Officer may deem appropriate. (g) Amendments and Withdrawal of Pleadings. The Presiding Officer upon his own initiative or upon the motion of any Party may, in his discretion, order any Party to file a pleading, or to reply to any pleading and further permit either Party to amend its pleadings upon conditions just to all Parties.