17-4-410, the registration of the agent or investment adviser

17-4-410, the registration of the agent or investment adviser representative is:

(i) Immediately effective as of the date of the completed filing, if the agent's central registration depository record or successor record or the investment adviser representative's investment adviser registration depository record or successor record does not contain a new or amended disciplinary disclosure within the previous twelve (12) months; or

(ii) Temporarily effective as of the date of the completed filing, if the agent's central registration depository record or successor record or the investment adviser representative's investment adviser registration depository record or successor record contains a new or amended disciplinary disclosure within the preceding twelve (12) months.

(c) The secretary of state may withdraw a temporary registration if there are or were grounds for discipline as specified in W.S. 17-4-412 and the secretary of state does so within thirty (30) days after the filing of the application. If the secretary of state does not withdraw the temporary registration within the thirty (30) day period, registration becomes automatically effective on the thirty-first day after filing.

(d) The secretary of state may prevent the effectiveness of a transfer of an agent or investment adviser representative under paragraph (b)(i) or (ii) of this section based on the public interest and the protection of investors.

(e) If the secretary of state determines that a registrant or applicant for registration is no longer in existence or has ceased to act as a broker-dealer, agent, investment adviser, or investment adviser representative, or is the subject of an adjudication of incapacity or is subject to the control of a committee, conservator, or guardian, or cannot reasonably be located, a rule adopted or order issued under this act may require the registration be cancelled or terminated or the application denied. The secretary of state may reinstate a cancelled or terminated registration, with or without hearing, and may make the registration retroactive.  17-4-409. Withdrawal of registration of broker-dealer, agent, investment adviser, and investment adviser representative.

Withdrawal of registration by a broker-dealer, agent, investment adviser, or investment adviser representative becomes effective sixty (60) days after the filing of the application to withdraw or within any shorter period as provided by rule adopted or order issued under this act unless a revocation or suspension proceeding is pending when the application is filed. If a proceeding is pending, withdrawal becomes effective when and upon such conditions as required by rule adopted or order issued under this act. The secretary of state may institute a revocation or suspension proceeding under W.S. 17-4-412 within one (1) year after the withdrawal became effective automatically and issue a revocation or suspension order as of the last date on which registration was effective if a proceeding is not pending.

17-4-410. Filing fees.

(a) A person shall pay a fee of two hundred fifty dollars ($250.00) when initially filing an application for registration as a broker-dealer and a fee of two hundred fifty dollars ($250.00) when filing a renewal of registration as a broker- dealer. If the filing results in a denial or withdrawal, the secretary of state shall retain the entire fee.

(b) The fee for an individual is forty-five dollars ($45.00) when filing an application for registration as an agent, a fee of forty-five dollars ($45.00) when filing a renewal of registration as an agent, and a fee of forty-five dollars ($45.00) when filing for a change of registration as an agent. If the filing results in a denial or withdrawal, the secretary of state shall retain the entire fee.

(c) A person shall pay a fee of two hundred fifty dollars ($250.00) when filing an application for registration as an investment adviser and a fee of two hundred fifty dollars ($250.00) when filing a renewal of registration as an investment adviser. If the filing results in a denial or withdrawal, the secretary of state shall retain the entire fee.

(d) The fee for an individual is forty-five dollars ($45.00) when filing an application for registration as an investment adviser representative, a fee of forty-five dollars ($45.00) when filing a renewal of registration as an investment adviser representative, and a fee of forty-five dollars ($45.00) when filing a change of registration as an investment adviser representative. If the filing results in a denial or withdrawal, the secretary of state shall retain the entire fee.

(e) A federal covered investment adviser required to file a notice under W.S. 17-4-405 shall pay an initial fee of two hundred fifty dollars ($250.00) and an annual notice fee of two hundred fifty dollars ($250.00).

(f) A person required to pay a filing or notice fee under this section may transmit the fee through or to a designee as a rule or order provides under this act.

(g) An investment adviser representative who is registered as an agent under W.S. 17-4-402 and who represents a person that is both registered as a broker-dealer under W.S. 17-4-401 and registered as an investment adviser under W.S. 17-4-403 or required as a federal covered investment adviser to make a notice filing under W.S. 17-4-405 is not required to pay an initial or annual registration fee for registration as an investment adviser representative.

17-4-411. Post registration requirements.

(a) Subject to section 15(h) of the Securities Exchange Act of 1934 (15 U.S.C. § 78o(h)) or section 222 of the Investment Advisers Act of 1940 (15 U.S.C. § 80b-22), a rule adopted or order issued under this act may establish minimum financial requirements for broker-dealers registered or required to be registered under this act and investment advisers registered or required to be registered under this act.

(b) Subject to section 15(h) of the Securities Exchange Act of 1934 (15 U.S.C. § 78o(h)) or section 222(b) of the Investment Advisers Act of 1940 (15 U.S.C. § 80b-22), a broker-dealer registered or required to be registered under this act and an investment adviser registered or required to be registered under this act shall file such financial reports as are required by a rule adopted or order issued under this act. If the information contained in a record filed under this subsection is or becomes inaccurate or incomplete in a material respect, the registrant shall promptly file a correcting amendment.  (c) Subject to section 15(h) of the Securities Exchange Act of 1934 (15 U.S.C. § 78o(h)) or section 222 of the Investment Advisers Act of 1940 (15 U.S.C. § 80b-22):

(i) A broker-dealer registered or required to be registered under this act and an investment adviser registered or required to be registered under this act shall make and maintain the accounts, correspondence, memoranda, papers, books, and other records required by rule adopted or order issued under this act;

(ii) Broker-dealer records required to be maintained under paragraph (i) of this subsection may be maintained in any form of data storage acceptable under section 17(a) of the Securities Exchange Act of 1934 (15 U.S.C. § 78q(a)) if they are readily accessible to the secretary of state; and

(iii) Investment adviser records required to be maintained under paragraph (i) of this subsection may be maintained in any form of data storage required by rule adopted or order issued under this act.

(d) The records of a broker-dealer registered or required to be registered under this act and of an investment adviser registered or required to be registered under this act are subject to such reasonable periodic, special, or other audits or inspections by a representative of the secretary of state, within or without this state, as the secretary of state considers necessary or appropriate in the public interest and for the protection of investors. An audit or inspection may be made at any time and without prior notice. The secretary of state may copy, and remove for audit or inspection copies of, all records the secretary of state reasonably considers necessary or appropriate to conduct the audit or inspection. The secretary of state may assess a reasonable charge for conducting an audit or inspection under this subsection.

(e) Subject to section 15(h) of the Securities Exchange Act of 1934 (15 U.S.C. § 78o(h)) or section 222 of the Investment Advisers Act of 1940 (15 U.S.C. § 80b-22), a rule adopted or order issued under this act may require a broker-dealer or investment adviser that has custody of or discretionary authority over funds or securities of a customer or client to obtain insurance or post a bond or other satisfactory form of security in an amount as set by rule. The secretary of state may determine the requirements of the insurance, bond, or other satisfactory form of security. Insurance or a bond or other satisfactory form of security may not be required of a broker-dealer registered under this act whose net capital exceeds, or of an investment adviser registered under this act whose minimum financial requirements exceed, the amounts required by rule or order under this act. The insurance, bond, or other satisfactory form of security must permit an action by a person to enforce any liability on the insurance, bond, or other satisfactory form of security if instituted within the time limitations in W.S. 17-4-509(k)(ii).

(f) Subject to section 15(h) of the Securities Exchange Act of 1934 (15 U.S.C. § 78o(h)) or section 222 of the Investment Advisers Act of 1940 (15 U.S.C. § 80b-22), an agent may not have custody of funds or securities of a customer except under the supervision of a broker-dealer and an investment adviser representative may not have custody of funds or securities of a client except under the supervision of an investment adviser or a federal covered investment adviser. A rule adopted or order issued under this act may prohibit, limit, or impose conditions on a broker-dealer regarding custody of funds or securities of a customer and on an investment adviser regarding custody of securities or funds of a client.

(g) With respect to an investment adviser registered or required to be registered under this act, a rule adopted or order issued under this act may require that information or other record be furnished or disseminated to clients or prospective clients in this state as necessary or appropriate in the public interest and for the protection of investors and advisory clients.

(h) A rule adopted or order issued under this act may require an individual registered under W.S. 17-4-402 or 17-4-404 to participate in a continuing education program approved by the securities and exchange commission and administered by a self-regulatory organization or, in the absence of such a program, a rule adopted or order issued under this act may require continuing education for an individual registered under W.S. 17-4-404.

17-4-412. Denial, revocation, suspension, withdrawal, restriction, condition, or limitation of registration.

(a) If the secretary of state finds that the order is in the public interest and subsection (d) of this section authorizes the action, an order issued under this act may deny an application, or may condition or limit registration of an applicant to be a broker-dealer, agent, investment adviser, or investment adviser representative, and, if the applicant is a broker-dealer or investment adviser, of a partner, officer, director, or person having a similar status or performing similar functions, or a person directly or indirectly in control, of the broker-dealer or investment adviser.

(b) If the secretary of state finds that the order is in the public interest and subsection (d) of this section authorizes the action, an order issued under this act may revoke, suspend, condition, or limit the registration of a registrant and, if the registrant is a broker-dealer or investment adviser, of a partner, officer, director, or person having a similar status or performing similar functions, or a person directly or indirectly in control, of the broker-dealer or investment adviser. However, the secretary of state may not:

(i) Institute a revocation or suspension proceeding under this subsection based on an order issued under a law of another state that is reported to the secretary of state or a designee of the secretary of state more than one (1) year after the date of the order on which it is based; or

(ii) Under subparagraph (d)(v)(A) or (B) of this section, issue an order on the basis of an order issued under the securities act of another state unless the other order was based on conduct for which subsection (d) would authorize the action had the conduct occurred in this state.

(c) If the secretary of state finds that the order is in the public interest and paragraph (d)(i) through (vi), (viii), (ix), (x), or (xii) and (xiii) of this section authorizes the action, an order under this act may censure, impose a bar or impose a civil penalty in an amount not to exceed a maximum of five thousand dollars ($5,000.00) for a single violation or fifty thousand dollars ($50,000.00) for more than one (1) violation, on a registrant, and, if the registrant is a broker-dealer or investment adviser, a partner, officer, director, or person having a similar status or performing similar functions, or a person directly or indirectly in control, of the broker-dealer or investment adviser.

(d) A person may be disciplined under subsections (a) through (c) of this section if the person:

(i) Has filed an application for registration in this state under this act or the predecessor act within the previous ten (10) years, which, as of the effective date of registration or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained a statement that, in light of the circumstances under which it was made, was false or misleading with respect to a material fact;

(ii) Willfully violated or willfully failed to comply with this act or the predecessor act or a rule adopted or order issued under this act or the predecessor act within the previous ten (10) years;

(iii) Has been convicted of a felony that relates to practice in securities and investing or to the ability to practice as a broker-dealer, agent, investment adviser, or investment adviser representative, as identified in rule by the secretary of state consistent with W.S. 33-1-304, or within the previous ten (10) years has been convicted of a misdemeanor involving a security, a commodity future or option contract, or an aspect of a business involving securities, commodities, investments, franchises, insurance, banking, or finance;

(iv) Is enjoined or restrained by a court of competent jurisdiction in an action instituted by the secretary of state under this act or the predecessor act, a state, the securities and exchange commission, or the United States from engaging in or continuing an act, practice, or course of business involving an aspect of a business involving securities, commodities, investments, franchises, insurance, banking, or finance;

(v) Is the subject of an order, issued after notice and opportunity for hearing by:

(A) The securities, depository institution, insurance, or other financial services regulator of a state or by the securities and exchange commission or other federal agency denying, revoking, barring, or suspending registration as a broker-dealer, agent, investment adviser, federal covered investment adviser, or investment adviser representative;

(B) The securities regulator of a state or the securities and exchange commission against a broker-dealer, agent, investment adviser, investment adviser representative, or federal covered investment adviser;  (C) The securities and exchange commission or a self-regulatory organization suspending or expelling the registrant from membership in the self-regulatory organization;

(D) A court adjudicating a United States postal service fraud order;

(E) The insurance regulator of a state denying, suspending, or revoking registration as an insurance agent; or

(F) A depository institution regulator suspending or barring the person from the depository institution business.

(vi) Is the subject of an adjudication or determination, after notice and opportunity for hearing, by the securities and exchange commission, the commodity futures trading commission; the federal trade commission; a federal depository institution regulator, or a depository institution, insurance, or other financial services regulator of a state that the person willfully violated the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, or the Commodity Exchange Act, the securities or commodities law of a state, or a federal or state law under which a business involving investments, franchises, insurance, banking, or finance is regulated;

(vii) Is insolvent, either because the person's liabilities exceed the person's assets or because the person cannot meet the person's obligations as they mature, but the secretary of state may not enter an order against an applicant or registrant under this paragraph without a finding of insolvency as to the applicant or registrant;

(viii) Refuses to allow or otherwise impedes the secretary of state from conducting an audit or inspection under W.S. 17-4-411(d) or refuses access to a registrant's office to conduct an audit or inspection under W.S. 17-4-411(d);

(ix) Has failed to reasonably supervise an agent, investment adviser representative, or other individual, if the agent, investment adviser representative, or other individual was subject to the person's supervision and committed a violation of this act or the predecessor act or a rule adopted or order issued under this act or the predecessor act within the previous ten (10) years;  (x) Has not paid the proper filing fee within thirty (30) days after having been notified by the secretary of state of a deficiency, but the secretary of state shall vacate an order under this paragraph when the deficiency is corrected;

(xi) After notice and opportunity for a hearing, has been found within the previous ten (10) years:

(A) By a court of competent jurisdiction to have willfully violated the laws of a foreign jurisdiction under which the business of securities, commodities, investment, franchises, insurance, banking, or finance is regulated;

(B) To have been the subject of an order of a securities regulator of a foreign jurisdiction denying, revoking, or suspending the right to engage in the business of securities as a broker-dealer, agent, investment adviser, investment adviser representative, or similar person; or

(C) To have been suspended or expelled from membership by or participation in a securities exchange or securities association operating under the securities laws of a foreign jurisdiction.

(xii) Is the subject of a cease and desist order issued by the securities and exchange commission or issued under the securities, commodities, investment, franchise, banking, finance, or insurance laws of a state;

(xiii) Has engaged in dishonest or unethical practices in the securities, commodities, investment, franchise, banking, finance, or insurance business within the previous ten (10) years; or

(xiv) Is not qualified on the basis of factors such as training, experience, and knowledge of the securities business. However, in the case of an application by an agent for a broker-dealer that is a member of a self-regulatory organization or by an individual for registration as an investment adviser representative, a denial order may not be based on this paragraph if the individual has successfully completed all examinations required by subsection (e) of this section. The secretary of state may require an applicant for registration under W.S. 17-4-402 or 17-4-404 who has not been registered in a state within the two (2) years preceding the filing of an application in this state to successfully complete an examination.

(e) A rule adopted or order issued under this act may require that an examination, including an examination developed or approved by an organization of securities regulators, be successfully completed by a class of individuals or all individuals. An order issued under this act may waive, in whole or in part, an examination as to an individual and a rule adopted under this act may waive, in whole or in part, an examination as to a class of individuals if the secretary of state determines that the examination is not necessary or appropriate in the public interest and for the protection of investors.

(f) The secretary of state may suspend or deny an application summarily; restrict, condition, limit, or suspend a registration; or censure, bar, or impose a civil penalty on a registrant before final determination of an administrative proceeding. Upon the issuance of an order, the secretary of state shall promptly notify each person subject to the order that the order has been issued, the reasons for the action, and that within fifteen (15) days after the receipt of a request in a record from the person the matter will be scheduled for a hearing. If a hearing is not requested and none is ordered by the secretary of state within thirty (30) days after the date of service of the order, the order becomes final by operation of law. If a hearing is requested or ordered, the secretary of state, after notice of and opportunity for hearing to each person subject to the order, may modify or vacate the order or extend the order until final determination.

(g) An order issued may not be issued under this section, except under subsection (f) of this section, without:

(i) Appropriate notice to the applicant or registrant;

(ii) Opportunity for hearing; and

(iii) Findings of fact and conclusions of law in a record in accordance with the Wyoming Administrative Procedure Act.

(h) A person that controls, directly or indirectly, a person not in compliance with this section may be disciplined by order of the secretary of state under subsections (a) through (c) of this section to the same extent as the noncomplying person, unless the controlling person did not know, and in the exercise of reasonable care could not have known, of the existence of conduct that is a ground for discipline under this section.

(j) The secretary of state may not institute a proceeding under subsection (a), (b), or (c) of this section based solely on material facts actually known by the secretary of state unless an investigation or the proceeding is instituted within one (1) year after the secretary of state actually acquires knowledge of the material facts.

ARTICLE 5 - FRAUD AND LIABILITIES

17-4-501. General fraud.

(a) It is unlawful for a person, in connection with the offer, sale, or purchase of a security, directly or indirectly:

(i) To employ a device, scheme, or artifice to defraud;

(ii) To make an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or

(iii) To engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.

17-4-502. Prohibited conduct in providing investment advice.

(a) It is unlawful for a person that advises others for compensation, either directly or indirectly or through publications or writings, as to the value of securities or the advisability of investing in, purchasing, or selling securities or that, for compensation and as part of a regular business, issues or promulgates analyses or reports relating to securities:

(i) To employ a device, scheme, or artifice to defraud another person; or  (ii) To engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.

(b) A rule adopted under this act may define an act, practice, or course of business of an investment adviser or an investment adviser representative, other than a supervised person of a federal covered investment adviser, as fraudulent, deceptive, or manipulative, and prescribe means reasonably designed to prevent investment advisers and investment adviser representatives, other than supervised persons of a federal covered investment adviser, from engaging in acts, practices, and courses of business defined as fraudulent, deceptive, or manipulative.

(c) A rule adopted under this act may specify the contents of an investment advisory contract entered into, extended, or renewed by an investment adviser.

17-4-503. Evidentiary burden.

(a) In a civil action or administrative proceeding under this act, a person claiming an exemption, exception, preemption, or exclusion has the burden to prove the applicability of the claim.

(b) In a criminal proceeding under this act, a person claiming an exemption, exception, preemption, or exclusion has the burden of going forward with evidence of the claim.

17-4-504. Filing of sales and advertising literature.

(a) Except as otherwise provided in subsection (b) of this section, a rule adopted or order issued under this act may require the filing of a prospectus, pamphlet, circular, form letter, advertisement, sales literature, or other advertising record relating to a security or investment advice, addressed or intended for distribution to prospective investors, including clients or prospective clients of a person registered or required to be registered as an investment adviser under this act.

(b) This section does not apply to sales and advertising literature specified in subsection (a) of this section which relates to a federal covered security, a federal covered investment adviser, or a security or transaction exempted by W.S. 17-4-201 through 17-4-204 except as required pursuant to W.S. 17-4-201(a)(vii).

17-4-505. Misleading filings.

It is unlawful for a person to make or cause to be made, in a record that is used in an action or proceeding or filed under this act, a statement that, at the time and in the light of the circumstances under which it is made, is false or misleading in a material respect, or, in connection with the statement, to omit to state a material fact necessary to make the statement made, in the light of the circumstances under which it was made, not false or misleading.

17-4-506. Misrepresentations concerning registration or exemption.

(a) The filing of an application for registration, a registration statement, a notice filing under this act, the registration of a person, the notice filing by a person, or the registration of a security under this act does not constitute a finding by the secretary of state that a record filed under this act is true, complete, and not misleading. The filing or registration or the availability of an exemption, exception, preemption, or exclusion for a security or a transaction does not mean that the secretary of state has passed upon the merits or qualifications of, or recommended or given approval to, a person, security, or transaction.

(b) It is unlawful to make, or cause to be made, to a purchaser, customer, client, or prospective customer or client a representation inconsistent with this section.

17-4-507. Qualified immunity.

A broker-dealer, agent, investment adviser, federal covered investment adviser, or investment adviser representative is not liable to another broker-dealer, agent, investment adviser, federal covered investment adviser, or investment adviser representative for defamation relating to a statement that is contained in a record required by the secretary of state, or designee of the secretary of state, the securities and exchange commission, or a self-regulatory organization, unless the person knew, or should have known at the time that the statement was made, that it was false in a material respect or the person acted in reckless disregard of the statement's truth or falsity.  17-4-508. Criminal penalties.

(a) A person that willfully violates this act, or a rule adopted or order issued under this act, except W.S. 17-4-504 or the notice filing requirements of W.S. 17-4-302 or 17-4-405, or that willfully violates W.S. 17-4-505 knowing the statement made to be false or misleading in a material respect, upon conviction, shall be fined not more than five thousand dollars ($5,000.00) or imprisoned not more than three (3) years, or both. An individual convicted of violating a rule or order under this act may be fined, but may not be imprisoned, if the individual did not have knowledge of the rule or order.

(b) The attorney general or district attorney with or without a reference from the secretary of state, may institute criminal proceedings under this act.

(c) This act does not limit the power of this state to punish a person for conduct that constitutes a crime under other laws of this state.

17-4-509. Civil Liability.

(a) Enforcement of civil liability under this section is subject to the Securities Litigation Uniform Standards Act of 1998.

(b) A person is liable to the purchaser if the person sells a security in violation of W.S. 17-4-301 or, by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statement made, in light of the circumstances under which it is made, not misleading, the purchaser not knowing the untruth or omission and the seller not sustaining the burden of proof that the seller did not know and, in the exercise of reasonable care, could not have known of the untruth or omission. An action under this subsection is governed by the following:

(i) The purchaser may maintain an action to recover the consideration paid for the security, less the amount of any income received on the security, and interest at six percent (6%) per year from the date of the purchase, costs, and reasonable attorneys' fees determined by the court, upon the tender of the security, or for actual damages as provided in paragraph (iii) of this subsection;  (ii) The tender referred to in paragraph (i) of this subsection may be made any time before entry of judgment. Tender requires only notice in a record of ownership of the security and willingness to exchange the security for the amount specified. A purchaser that no longer owns the security may recover actual damages as provided in paragraph (iii) of this subsection;

(iii) Actual damages in an action arising under this subsection are the amount that would be recoverable upon a tender less the value of the security when the purchaser disposed of it, and interest at six percent (6%) per year from the date of the purchase, costs and reasonable attorneys' fees determined by the court.

(c) A person is liable to the seller if the person buys a security by means of an untrue statement of a material fact or omission to state a material fact necessary in order to make the statement made, in light of the circumstances under which it is made, not misleading, the seller not knowing of the untruth or omission, and the purchaser not sustaining the burden of proof that the purchaser did not know, and in the exercise of reasonable care, could not have known of the untruth or omission. An action under this subsection is governed by the following:

(i) The seller may maintain an action to recover the security, and any income received on the security, costs, and reasonable attorneys' fees determined by the court, upon the tender of the purchase price, or for actual damages as provided in paragraph (iii) of this subsection;

(ii) The tender referred to in paragraph (i) of this subsection may be made any time before entry of judgment. Tender requires only notice in a record of the present ability to pay the amount tendered and willingness to take delivery of the security for the amount specified. If the purchaser no longer owns the security, the seller may recover actual damages as provided in paragraph (iii) of this subsection;

(iii) Actual damages in an action arising under this subsection are the difference between the price at which the security was sold and the value the security would have had at the time of the sale in the absence of the purchaser's conduct causing liability, and interest at six percent (6%) per year from the date of the sale of the security, costs, and reasonable attorneys' fees determined by the court.  (d) A person acting as a broker-dealer or agent that sells or buys a security in violation of W.S. 17-4-401(a),