View Enforcement Actions here: 
http://www.azcc.gov/divisions/securities/enforcement/enforce-actions.asp

View Enforcement Orders here:
http://www.azcc.gov/divisions/securities/enforcement/enforce-orders.asp

What constitutes an enforcement case?
An enforcement case generally arises because of an investor complaint, but it may come to the attention of the Securities Division from any source such as a newspaper advertisement, for example.  The Division opens an enforcement case after it first conducts a confidential investigation that indicates a violation of the state's securities laws may have occurred.

Is an enforcement case public? 
By law, the Division’s investigative files are confidential.  Only under limited circumstances, however, may some records be released. If the Division begins an enforcement action, only essential information pertaining to the charges as well as any written legal statements (notices and orders) become public records. Personal information such as account numbers and social security numbers contained in the investigative file may be extracted to protect an individual’s privacy.

What is the difference between an enforcement action and an enforcement order?
An enforcement action is an umbrella term to describe the initial steps taken by the Securities Division when it believes it has evidence that a respondent (the person or company facing the charges) has violated the state's securities laws.  The Division normally initiates an action by filing and serving a Notice of Opportunity for Hearing, which is similar to a complaint in a civil lawsuit.  Respondents then have a limited time in which to request a hearing where they (or legal counsel) can present their respective cases to an Administrative Law Judge.  As part of its administrative action, the Division may also issue a Temporary Emergency Order if the alleged activity is widespread and ongoing (see explanation of term below). 

When an action is pending, the Commission's Administrative Law Judge has not yet heard any evidence about the Securities Division’s claims. If someone with whom you have invested or someone who is offering you an investment is the subject of an action, keep in mind that the Division still has to prove the allegations spelled out in the notice. Hearings on alleged violations of the Securities Act are public and you can attend, if you wish. To access the hearing calendar, visit the Commission’s web site, www.azcc.gov or call 602-542-2237.

NOTE:  Hearings are not criminal trials.  If the Division determines that the charges against the respondent warrant criminal prosecution, the case may be referred to the Arizona Attorney General or U.S. Attorney.  Only in that arena do respondents face the possibility of prison time for their violations.

At the conclusion of the hearing, the judge will draft a proposed decision that is then considered by the Commissioners, who decide whether or not to accept the findings and sanctions.  The Commission’s decision, formalized in the form of a written order, is made during a public open meeting.  To access the open meeting schedule, visit the Commission's web site, www.azcc.gov or call 602-542-2237.  

The Commission may enter various types of orders.  These legal documents contain certain requirements that may include any or all of the following: An order to cease the illegal activity, license/registration revocation, payment of fines and restitution, and the return of sales commissions, among others. 

Here are some of the main types of orders that the Commission may issue, depending upon the stage of the proceeding:

Consent Order—Sometimes prior to the hearing or even before the Division files its charges, the Commission can enter into a settlement where the respondent agrees to comply with certain terms and conditions.  The respondent may agree to the order without admitting or denying the facts outlined in the case.

Temporary Cease and Desist Order—The Division orders the respondent to immediately stop violating the securities laws by ceasing the activity in question.  With this type of order, the Division must eventually provide evidence to prove its allegations against the respondent at a hearing.  

Permanent Cease and Desist Order—The Commission finds that the Division has proven its case against the respondent, who must now comply with the terms of the order or be subject to additional sanctions, including contempt charges in civil court. 

Depending on the type of order and its terms, a respondent may still have the right to a full hearing before a Commission Administrative Law Judge or to appeal the decision to court.  Often in a settlement, the respondent waives any further right to appeal.  If the right to appeal is available, however, it must be exercised within a specific time period or the respondent may have no further recourse.  

The Commission has issued a temporary order to cease and desist.  If I'm an investor, what should I do?
Carefully review the information contained in the order.  We cannot advise you on specific actions that you should take.  The purpose for the temporary order is to signal to you that the regulators of the securities industry in Arizona believe that there could be problems with the nature of the investment or the manner in which the investment is being promoted.  You need to take this into account as you evaluate whether to stay in or to get out of the investment. 

Contact the Division and ask to speak with the investigator assigned to the case if either of the following applies:

• You have invested money with an individual or a company named in the temporary order.
• You know someone who has invested with an individual or company named in the order.
• You have specific information about the activities of a named individual or company that you believe might assist the Division in evaluating or pursuing the case.

Investigations are crucial since, like any system of justice, one must have grounds before putting a company or individual on notice of a violation.  Sometimes after the Securities Division conducts an investigation, it may determine that state securities laws were not violated.  In this situation, the Division’s investigative files continue to remain confidential.

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