State v. Hager, 790 N.W.2d 745

Hager pled guilty in 2007 to four counts of selling unregistered securities and four counts of acting as an unregistered agent; he was sentenced to one year with six months suspended and electronic home monitoring, plus ten years of supervised probation.
While on monitoring, Hager worked for and rented space to RAHFCO Management Group, LLC, which issues Rule 506 securities; Hager owns 1% of RAHFCO.
In November 2008, a probation-revocation petition was filed (amended March 2009) alleging 25 violations including firearms possession, unlawfully acting as an unregistered agent, and securities fraud.
At a November 16, 2009 revocation hearing, Hager admitted possession of firearms; the securities-fraud allegation was dismissed; other violations were denied; the court found firearms possession and unlawful acting as an unregistered agent.
The district court revoked probation and resentenced Hager to 30 months in prison for eight concurrent violations; the court indicated it would have imposed a harsher sentence but for considerations at resentencing.
The Court of Appeals applies a two-step standard: (1) clearly erroneous review of factual findings and (2) an abuse-of-discretion review of the decision to revoke probation; NSMIA preemption issues and issuer/agent definitions are legal questions under de novo review.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Hager violated probation by unlawfully acting as an unregistered agent	Hager argues NSMIA preempts state registration for issuers and may exempt him	State contends Hager was an agent who needed registration and was not exempt	Yes, Hager unlawfully acted as an unregistered agent; probation revocation affirmed
Whether NSMIA preempts state registration of individuals involved in securities transactions	Hager relies on NSMIA to exempt individuals who are issuers	ND law requires registration of individuals acting as agents; NSMIA does not preempt registration of persons	NSMIA does not preempt state registration of individuals; Hager must register or be treated as unregistered agent
Whether a single probation violation suffices to sustain revocation	Single violation (firearms) suffices to revoke probation	Court should consider all violations; not necessary to resolve others	Single violation can sustain revocation; court properly relied on the unregistered-agent finding as part of its decision

State v. Jacobsen, 2008 ND 52 (ND Supreme Court 2008) (two-step standard for probation revocation: clearly erroneous facts and abuse of discretion in revocation decision)
State v. Ennis, 464 N.W.2d 378 (ND Supreme Court 1990) (trial court discretion in sentencing after revocation)
State ex rel. Stenehjem v. Simple.net, Inc., 2009 ND 80 (ND Supreme Court 2009) (preemption analysis under Supremacy Clause; field preemption; conflict preemption)
State ex rel. Stenehjem v. FreeEats.com, Inc., 2006 ND 84 (ND Supreme Court 2006) (preemption interpretation in ND securities context)
Brown v. Earthboard Sports USA, Inc., 481 F.3d 901 (6th Cir. 2007) (Rule 506 exemption and NSMIA preemption affecting securities registration)
Risdall v. Brown-Wilbert, Inc., 753 N.W.2d 723 (Minn. 2008) (NSMIA and state registration considerations in securities offerings)
United States v. Rachal, 473 F.2d 1338 (5th Cir. 1973) (issuers and control persons liability in unregistered securities sales)
Securities & Exchange Comm'n v. National Bankers Life Ins. Co., 324 F.Supp. 189 (N.D. Tex. 1971) (issuer-related liability and registration concepts in securities law)