No. 37042 (Amendment): Section R164-31-1. Guidelines for the Assessment of Administrative Fines

(Amendment)

DAR File No.: 37042
Filed: 11/14/2012 01:54:44 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule amendment clarifies the guidelines used by the Utah Securities Commission when imposing fines in administrative actions by adding to existing guidelines several specific factors to be considered.

Summary of the rule or change:

The amendment adds the following specific factors for consideration by the Utah Securities Commission when imposing fines against respondents in administrative actions: the amount of investor losses; financial benefits, enrichment, commissions, fees or other consideration received by the respondent in connection with violations of the Utah Uniform Securities Act; remedial actions taken by the respondent such as disgorgement of ill-gotten gains; and the costs of the Division incurred in investigating and prosecuting the action.

State statutory or constitutional authorization for this rule:

• Section 61-1-24
• Section 61-1-6
• Section 61-1-12
• Section 61-1-20
• Section 61-1-14

Anticipated cost or savings to:

the state budget:

No additional costs or savings to the state budget are anticipated, because the proposal simply adds specific criteria to be considered by the Commission in imposing administrative fines.

local governments:

No additional costs or savings to local government are anticipated, because the proposal simply adds specific criteria to be considered by the Commission in imposing administrative fines.

small businesses:

No additional costs or savings to small businesses are anticipated, because the proposal simply adds specific criteria to be considered by the Commission in imposing administrative fines.

persons other than small businesses, businesses, or local governmental entities:

No additional costs or savings to such persons are anticipated, because the proposal simply adds specific criteria to be considered by the Commission in imposing administrative fines.

Compliance costs for affected persons:

There will be no compliance costs for affected persons because the proposal simply identifies specific criteria to be considered by the Commission in imposing administrative fines.

Comments by the department head on the fiscal impact the rule may have on businesses:

This proposal should have no fiscal impact to businesses because it does not add any new requirements or compliance costs, but rather more specifically describes factors to be considered by the Utah Securities Commission when imposing fines in administrative actions.

Francine A. Giani, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Commerce
Securities
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Charles Lyons at the above address, by phone at 801-530-6940, by FAX at 801-530-6980, or by Internet E-mail at [e-mail]
• Keith Woodwell at the above address, by phone at 801-530-6606, by FAX at 801-530-6980, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/31/2012

This rule may become effective on:

01/07/2013

Authorized by:

Keith Woodwell, Director

RULE TEXT

R164. Commerce, Securities.

R164-31. Administrative Fines.

R164-31-1. Guidelines for the Assessment of Administrative Fines.

(A) Authority and purpose.

(1) The Division enacts this rule under authority granted by Sections 61-1-6, 61-1-12, 61-1-14, 61-1-20 and 61-1-24.

(2) This rule identifies guidelines for the assessment of administrative fines. The guidelines should not be considered all-inclusive but rather are intended to provide factors to be considered when imposing a fine.

(B) Guidelines.

(1) For the purpose of determining the amount of an administrative fine assessed against a person under the Utah Uniform Securities Act, the Commission[Division Director] shall consider the following factors:

(a) the seriousness, nature, circumstances, extent, and persistence of the conduct constituting the violation;

(b) the harm to other persons, including the amount of investor losses, resulting either directly or indirectly from the violation;

(c) any financial benefit, enrichment, commission, fee or other consideration received directly or indirectly by the person in connection with the violation;

(d) cooperation by the person in any inquiry conducted by the Division concerning the violation, efforts to prevent future occurrences of the violation, and efforts to mitigate the harm caused by the violation, including any restitution paid or disgorgement of ill-gotten gains[made] to [other ]persons injured by the acts of the person;

( e[d]) the history of previous violations by the person;

( f[e]) the need to deter the person or other persons from committing such violations in the future;[ and]

(g) the costs of the Division incurred in investigating and prosecuting the action; and

( h[f]) such other matters as justice may require.

 

KEY: administrative fines, securities regulation, securities

Date of Enactment or Last Substantive Amendment: [August 26, 2008]2013

Authorizing, and Implemented or Interpreted Law: 61-1-6; 61-1-12; 61-1-14; 61-1-20; 61-1-24

 

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