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RULE §116.6Registration of Persons with Criminal Backgrounds

(a) The application for registration may be denied, suspended, or revoked 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:

  (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; and

  (4) the relationship of the crime to the ability, capacity, or fitness required to perform the duties and discharge the responsibilities of a registered investment adviser or investment adviser representative.

(b) The Securities Commissioner shall consider the following evidence in determining the present fitness of an applicant who has been convicted of a crime:

  (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) Other evidence of the applicant's present fitness, including letters of recommendation 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.

  (7) It shall be the responsibility of the applicant to the extent possible to secure and provide to the Securities Commissioner the recommendation of the prosecution, law enforcement, and correctional authorities as required under this section. The applicant shall also furnish proof to the Securities Commissioner that he or she has maintained a record of steady employment and has supported his or her dependents and has otherwise maintained a record of good conduct and has paid all outstanding court costs, supervision fees, fines, and restitution as may have been ordered in all criminal cases in which he or she has been convicted.

(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.

Source Note: The provisions of this §116.6 adopted to be effective August 12, 2001, 26 TexReg 5799; amended to be effective March 28, 2010, 35 TexReg 2549

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