H 4593 General Bill, By Wilkins, S.E. Gonzales, Harvin, B.H. Harwell, Haskins, 
K.G. Kempe, H.H. Keyserling, Kirsh, Meacham, Vaughn, Wilkes and R.M. Young
 A Bill to amend Section 35-1-60, Code of Laws of South Carolina, 1976,
 relating to the promulgation of rules, forms, and orders by the Securities
 Commissioner under the Uniform Securities Act, so as to authorize the
 Commissioner to issue cease and desist orders; to amend Section 35-1-540,
 relating to the time limitation on suspension or revocation proceedings
 instituted by the Commissioner, so as to revise this time limitation; to amend
 Section 35-1-1310, relating to petitions for review of final orders of the
 Commissioner in a court of competent jurisdiction, so as to revise the time
 within which a petition for such a review may be filed; to amend Section
 35-1-1460, relating to the Securities Commissioner applying to a court of
 competent jurisdiction to compel obedience of witnesses, so as to authorize
 the court to impose certain fines for failure to comply and to provide that
 the court may award to the Securities Commissioner fees and costs incurred in
 appearing before the court; to amend the 1976 Code by adding Section 35-1-1475
 so as to authorize the Securities Commissioner to impose and collect certain
 administrative fines; to amend Section 35-1-1580, relating to the institution
 of criminal proceedings by the Attorney General after reference to him of
 evidence by the Securities Commissioner, so as to also authorize a circuit
 solicitor to institute such proceedings; and to amend Section 35-1-1590,
 relating to criminal penalties for wilfull violations of the Uniform
 Securities Act, so as to increase the dollar amount of the authorized fine.

   03/24/92  House  Introduced and read first time HJ-13
   03/24/92  House  Referred to Committee on Judiciary HJ-14

A BILL

TO AMEND SECTION 35-1-60, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE PROMULGATION OF RULES, FORMS, AND ORDERS BY THE SECURITIES COMMISSIONER UNDER THE UNIFORM SECURITIES ACT, SO AS TO AUTHORIZE THE COMMISSIONER TO ISSUE CEASE AND DESIST ORDERS; TO AMEND SECTION 35-1-540, RELATING TO THE TIME LIMITATION ON SUSPENSION OR REVOCATION PROCEEDINGS INSTITUTED BY THE COMMISSIONER, SO AS TO REVISE THIS TIME LIMITATION; TO AMEND SECTION 35-1-1310, RELATING TO PETITIONS FOR REVIEW OF FINAL ORDERS OF THE COMMISSIONER IN A COURT OF COMPETENT JURISDICTION, SO AS TO REVISE THE TIME WITHIN WHICH A PETITION FOR SUCH A REVIEW MAY BE FILED; TO AMEND SECTION 35-1-1460, RELATING TO THE SECURITIES COMMISSIONER APPLYING TO A COURT OF COMPETENT JURISDICTION TO COMPEL OBEDIENCE OF WITNESSES, SO AS TO AUTHORIZE THE COURT TO IMPOSE CERTAIN FINES FOR FAILURE TO COMPLY AND TO PROVIDE THAT THE COURT MAY AWARD TO THE SECURITIES COMMISSIONER FEES AND COSTS INCURRED IN APPEARING BEFORE THE COURT; TO AMEND THE 1976 CODE BY ADDING SECTION 35-1-1475 SO AS TO AUTHORIZE THE SECURITIES COMMISSIONER TO IMPOSE AND COLLECT CERTAIN ADMINISTRATIVE FINES; TO AMEND SECTION 35-1-1580, RELATING TO THE INSTITUTION OF CRIMINAL PROCEEDINGS BY THE ATTORNEY GENERAL AFTER REFERENCE TO HIM OF EVIDENCE BY THE SECURITIES COMMISSIONER, SO AS TO ALSO AUTHORIZE A CIRCUIT SOLICITOR TO INSTITUTE SUCH PROCEEDINGS; AND TO AMEND SECTION 35-1-1590, RELATING TO CRIMINAL PENALTIES FOR WILFULL VIOLATIONS OF THE UNIFORM SECURITIES ACT, SO AS TO INCREASE THE DOLLAR AMOUNT OF THE AUTHORIZED FINE.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 35-1-60 of the 1976 Code is amended to read:

"Section 35-1-60. The Securities Commissioner may from time to time make, amend, and rescind such those rules, forms, and orders, including cease and desist orders, as are necessary to carry out the provisions of this chapter, including rules and forms governing registration statements, applications, and reports and defining any terms, whether or not used in this chapter, in so far as the definitions are not inconsistent with the provisions of this chapter. For the purpose of rules and forms, the Securities Commissioner may classify securities, persons, and matters within his jurisdiction and prescribe different requirements for different classes.

No rule, form, or order may be made, amended, or rescinded unless the Securities Commissioner 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 Securities Commissioner 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 chapter to achieve maximum uniformity in the form and content of registration statements, applications, and reports wherever practicable.

All rules and forms of the Securities Commissioner shall must be published."

SECTION 2. Section 35-1-540 of the 1976 Code is amended to read:

"Section 35-1-540. The Securities Commissioner may not institute a suspension or revocation proceeding on the basis of a fact or transaction actually known to him when registration became effective unless the proceeding is instituted within the next thirty one hundred sixty days; provided that this time limitation is suspended during the time period of any investigation commenced by the Securities Commissioner."

SECTION 3. Section 35-1-1310 of the 1976 Code is amended to read:

"Section 35-1-1310. Any person aggrieved by a final order of the Securities Commissioner may obtain a review of the order in the court of common pleas for Richland County or in the county wherein such the person resides by filing in court, within sixty thirty 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 must be forthwith served upon the Securities Commissioner, and thereupon the Securities Commissioner shall certify and file in court a copy of the filing and 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. The findings of the Securities Commissioner as to the facts, if supported by competent, material, and substantial evidence, are conclusive."

SECTION 4. Section 35-1-1460 of the 1976 Code is amended to read:

"Section 35-1-1460. In case of contumacy by, or refusal to obey a subpoena issued to, any person, the court of common pleas, upon application by the Securities Commissioner, may issue to the person an order requiring him to appear before the Securities Commissioner or the officer designated by him, there to produce documentary evidence if so ordered or to give evidence touching the matter under investigation or in question. The court may fine the person not exceeding three thousand dollars if it finds that the person's failure to respond fully to the subpoena was not in good faith or was for purposes of delay. In any case the court may award the Securities Commissioner fees and costs incurred in appearing before the court. Failure to obey the order of the court may be punished by the court as a contempt of court in addition to the other penalties authorized by this section."

SECTION 5. The 1976 Code is amended by adding:

"Section 35-1-1475. The Securities Commissioner may impose and collect an administrative fine against any person found to have violated any provision of this chapter, any rule or order promulgated by the commissioner, or any written agreement entered into with the commissioner in an amount not exceeding five thousand dollars for each violation."

SECTION 6. Section 35-1-1580 of the 1976 Code is amended to read:

"Section 35-1-1580. The Securities Commissioner may refer such that evidence as is available concerning violations of this chapter or of any rule or order hereunder under this chapter to the Attorney General or the appropriate Circuit Solicitor, who may, with or without such a reference, institute the appropriate criminal proceedings under this chapter."

SECTION 7. Section 35-1-1590 of the 1976 Code is amended to read:

"Section 35-1-1590. Any person who wilfully violates any provision of this chapter except Section 35-1-160, who wilfully violates any rule or order under this chapter or who wilfully violates Section 35-1-160, knowing the statement made to be false or misleading in any material respect, is guilty of a misdemeanor and shall, upon conviction, must be fined not more than five fifty thousand dollars or imprisoned not more than three years, or both. But However, no person may be imprisoned for the violation of any rule or order if he proves that he had no knowledge of the rule or order."

SECTION 8. This act takes effect upon approval by the Governor.