Cal. Code Regs. tit. 10, § 280.604 – Report of Defalcation.

(a) A licensee shall immediately report to the Commissioner any defalcation, embezzlement or theft made, or reasonably believed by the company to have been made, by any of its officers, directors, partners, members, employees or persons controlling 10 percent or more of the ownership interests, trustees, investment advisers, or affiliates.
(b) Employee shall have the same meaning as in Rule 280.603(b).

Note: Authority cited: Section 28951, Corporations Code. Reference: Section 28502, Corporations Code.

1. New section filed 6-24-99; operative 7-1-99 pursuant to Government Code section 11343.4(d) (Register 99, No. 26).