Current through Reg. 49, No. 38; September 20, 2024
(a) An application for registration may be
denied, or a registration may be revoked or suspended, if the Securities
Commissioner finds that the person has been convicted of any felony, or of a
misdemeanor offense that directly relates to its duties and responsibilities.
In determining whether a misdemeanor conviction directly relates to such duties
and responsibilities, the Securities Commissioner shall consider each of the
following factors:
(1) the nature and
seriousness of the crime;
(2) the
relationship of the crime to the purposes for requiring registration of
investment advisers and investment adviser representatives;
(3) the extent to which the registration
applied for might offer an opportunity to engage in further criminal activity
of the same type as that in which the applicant previously had been
involved;
(4) the relationship of
the crime to the ability or capacity required to perform the duties and
discharge the responsibilities of a registered investment adviser or investment
adviser representative; and
(5) any
correlation between the elements of the crime and its duties and
responsibilities.
(b)
After the Securities Commissioner has determined the criminal conviction
directly relates to the duties and responsibilities of the license, the
Securities Commissioner shall consider the following evidence in determining
whether the person is eligible for a license issued by the Agency:
(1) The extent and nature of the person's
past criminal activity.
(2) The age
of the applicant at the time of the commission of the crime.
(3) The amount of time that has elapsed since
the applicant's last criminal activity.
(4) The conduct and work activity of the
applicant prior to and following the criminal activity.
(5) Evidence of the applicant's
rehabilitation or rehabilitative effort while incarcerated or following
release.
(6) Evidence of the
person's compliance with any conditions of community supervision, parole, or
mandatory supervision.
(7) Other
evidence of the applicant's present fitness, including letters of
recommendation, may be provided and considered, including letters from
prosecution, law enforcement, and correctional officers who prosecuted,
arrested, or had custodial responsibility for the applicant; the sheriff and
chief of police in the community where the applicant resides; and any other
persons in contact with the applicant.
(8) It shall be the responsibility of the
applicant to the extent possible to secure and provide to the Securities
Commissioner the letters of recommendation described by paragraph (7) of this
subsection.
(c) The
State Securities Board considers that the following crimes directly relate to
the duties and responsibilities of investment advisers and investment adviser
representatives:
(1) any criminal violation of
which fraud is an essential element or that involves wrongful taking or
possession of property or services;
(2) any criminal violation of the securities
laws or regulations of this state, or of any other state in the United States,
or of the United States, or any foreign jurisdiction;
(3) any criminal violation of statutes
designed to protect consumers against unlawful practices involving insurance,
securities, commodities or commodity futures, real estate, franchises, business
opportunities, consumer goods, or other goods and services; and
(4) any criminal violation involving an
assault on a person.
(d)
Prior to filing an application, a person may request a preliminary evaluation
of license eligibility from the State Securities Board by following the
procedure set out in §104.7 of this title (relating to Preliminary
Evaluation of License Eligibility) and paying the requisite fee.
(e) Prior to taking any action under
subsection (a) of this section to deny any application for registration, the
State Securities Board shall comply with the notification requirements of Texas
Occupations Code, §53.0231 Notice of Pending Denial of License, and
§53.051.
(f) Prior to taking
any action under subsection (a) of this section to revoke or suspend any
application for registration, the State Securities Board shall comply with the
notification requirements of Texas Occupations Code, §53.051.
(g) State Auditor Applicant Best Practices
Guide.
(1) The State Securities Board shall
post a link on its website to the Applicant Best Practices Guide, to be
developed and published by the state auditor as required by Texas Occupations
Code, §53.026. This guide, which shall be posted once it becomes
available, shall set forth best practices for an applicant with a prior
conviction to use when applying for a license.
(2) In each notice to deny, revoke, or
suspend a registration or to deny a person the opportunity be examined for a
registration, the State Securities Board shall include a link to the guide as
described in paragraph (1) of this subsection.
