1. (a) The application for registration may be denied, suspended, or revoked if the Securities Commissioner finds that the person has been convicted of a felony or misdemeanor offense which directly relates to its duties and responsibilities. In determining whether a prior criminal conviction directly relates to such duties and responsibilities, the Securities Commissioner shall consider:

   1. (1) the nature and seriousness of the crime;
   2. (2) the relationship of the crime to the purposes for requiring registration of dealers, agents, and salesmen;
   3. (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. (4) the relationship of the crime to the ability, capacity, or fitness required to perform the duties and discharge the responsibilities of a registered dealer, agent, or salesman.

2. (b) In addition to the factors stated in subsection (a) of this section, the Securities Commissioner shall consider the following evidence in determining the present fitness of an applicant who has been convicted of a crime:

   1. (1) The extent and nature of the person's past criminal activity.
   2. (2) The age of the applicant at the time of the commission of the crime.
   3. (3) The amount of time that has elapsed since the applicant's last criminal activity.
   4. (4) The conduct and work activity of the applicant prior to and following the criminal activity.
   5. (5) Evidence of the applicant's rehabilitation or rehabilitative effort while incarcerated or following release.
   6. (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. (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.

3. (c) The State Securities Board considers that the following crimes directly relate to the duties and responsibilities of securities dealers, agents, and salesmen:

   1. (1) any felony or misdemeanor of which fraud is an essential element or which involves wrongful taking of property;
   2. (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; and
   3. (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.
4. (d) Upon a registered dealer's, agent's, or salesman's felony conviction, felony probation revocation, revocation of parole, or revocation of mandatory supervision, such person's license may be revoked in accordance with the Securities Act (Texas Civil Statutes, Article 581-1 et seq.).

5. (e) The following procedures shall apply in the event of a denial, suspension, or revocation of registration under this section.

   1. (1) Upon the Securities Commissioner's denial of registration to an applicant, the applicant may exercise his or her right to a hearing in accordance with the Texas Securities Act, §24 (Texas Civil Statutes, Article 581-24).
   2. (2) Upon the Securities Commissioner's suspension or revocation of a registration on the grounds specified in subsection (d) of this section, the person whose registration has been suspended or revoked may exercise his or her right to a hearing in accordance with the Texas Securities Act, §24 (Texas Civil Statutes, Article 581-24).
   3. (3) Nothing in this section shall be construed as affecting the statutory bases or procedures for denial, suspension, or revocation of registrations for dealers, agents, or salesmen, as set out in the Texas Securities Act (Texas Civil Statutes, Article 581-1 et seq.), as this section relates only to such actions based upon the matters stated in this section.

   4. (4) If the Securities Commissioner denies, suspends, or revokes a registration under this section, the Securities Commissioner shall notify the person affected in writing:

      1. (A) of the reasons for the denial, suspension, or revocation;
      2. (B) that a person whose registration has been denied, suspended, or revoked, after exhausting administrative appeals, may file an action in Travis County, Texas, for review of the evidence presented to the Securities Commissioner and his or her decision, in accordance with the Texas Securities Act, §27 (Texas Civil Statutes, Article 581-27); and
      3. (C) that the person seeking judicial review must file a petition with the court within 30 days after the Securities Commissioner's decision is final and appealable.

Source Note:The provisions of this §115.6 adopted to be effective February 1, 1982, 7 TexReg 247; amended to be effective October 30, 1985, 10 TexReg 4083; amended to be effective April 9, 1997, 22 TexReg 3221.