Administration and Judicial Review

V.S.A. tit. 9, ch. 150, subch. 6

in effect

9 V.S.A. § 5601 Administration

5601. Administration (a) The Commissioner shall administer this chapter. (b) It is unlawful for the Commissioner or an officer, employee, or designee of the Commissioner to use for personal benefit or the benefit of others records or other information obtained by or filed with the Commissioner that are not public under subsection 5607(b) of this title. This chapter does not authorize the Commissioner or an officer, employee, or designee of the Commissioner to disclose the record or information, except in accordance with section 5602, subsection 5607(c), or section 5608 of this title. (c) This chapter does not create or diminish a privilege or exemption that exists at common law, by statute or rule, or otherwise. (d) The Commissioner may develop and implement financial services education initiatives to inform the public about financial services, with particular emphasis on the prevention and detection of securities, banking, and insurance fraud. In developing and implementing these initiatives, the Commissioner may collaborate with public and nonprofit organizations with an interest in financial services education. The Commissioner may accept a grant or donation from a person or from a nonprofit organization, regardless of whether the person or organization is affiliated with the financial services industry, to develop and implement financial services education initiatives. This subsection does not authorize the Commissioner to require participation or monetary contributions of a registrant in financial services education program. (e) [Repealed.] Added 2005, No. 11, § 1, eff. July 1, 2006; amended 2011, No. 21, § 12; 2019, No. 57, § 17.

9 V.S.A. § 5602 Investigations and subpoenas

5602. Investigations and subpoenas (a) The Commissioner may: (1) conduct public or private investigations within or outside this State that the Commissioner considers necessary or appropriate to determine whether a person has violated, is violating, or is about to violate this chapter or a rule adopted or an order issued under this chapter, or to aid in the enforcement of this chapter or in the adoption of rules and forms under this chapter; (2) require or permit a person to testify, file a statement, or produce a record, under oath or otherwise as the Commissioner determines, as to all the facts and circumstances concerning a matter to be investigated or about which an action or proceeding is to be instituted; and (3) publish a record concerning an action, a proceeding, or an investigation under, or a violation of, this chapter or a rule adopted or an order issued under this chapter if the Commissioner determines it is necessary or appropriate in the public interest and for the protection of investors. (b) For the purpose of an investigation under this chapter, the Commissioner or his or her designated officer may administer oaths and affirmations, subpoena witnesses, seek compulsion of attendance, take evidence, require the filing of statements, and require the production of any records that the Commissioner considers relevant or material to the investigation. Each witness who appears before the Commissioner under subpoena shall receive a fee and mileage as provided for witnesses in civil cases in Superior Courts; provided, however, any person subject to regulation under this title shall not be eligible to receive fees or mileage under this section. (c) If a person does not appear or refuses to testify, file a statement, produce records, or otherwise does not obey a subpoena as required by the Commissioner under this chapter, the Commissioner may, at the Commissioner’s discretion, assess a penalty pursuant to the provisions of 8 V.S.A. § 13(b), or may apply to the Superior Court of Washington County or a court of another state to enforce compliance. The court may: (1) hold the person in contempt; (2) order the person to appear before the Commissioner; (3) order the person to testify about the matter under investigation or in question; (4) order the production of records; (5) grant injunctive relief, including restricting or prohibiting the offer or sale of securities or the providing of investment advice; (6) impose a civil penalty of not less than $5,000.00 and not greater than $25,000.00 for each violation; and (7) grant any other necessary or appropriate relief. (d) This section does not preclude a person from applying to the Superior Court of Washington County or a court of another state for relief from a request to appear, testify, file a statement, produce records, or obey a subpoena. (e) An individual is not excused from attending, testifying, filing a statement, producing a record or other evidence, or obeying a subpoena of the Commissioner under this chapter or in an action or proceeding instituted by the Commissioner under this chapter on the ground that the required testimony, statement, record, or other evidence, directly or indirectly, may tend to incriminate the individual or subject the individual to a criminal fine, penalty, or forfeiture. If the individual refuses to testify, file a statement, or produce a record or other evidence on the basis of the individual’s privilege against self-incrimination, the Commissioner, subject to subsection (f) of this section, may apply to the Washington County Superior Court to compel the testimony, the filing of the statement, the production of the record, or the giving of other evidence. The testimony, record, or other evidence compelled under such an order may not be used, directly or indirectly, against the individual in a criminal case, except in a prosecution for perjury or contempt or otherwise failing to comply with the order. (f) Unless presented by an emergency or exigent circumstances, the Commissioner shall give notice to the Attorney General and U.S. Attorney not less than five business days before applying to the Superior Court of Washington County to compel the testimony, the filing of the statement, the production of the record, or the giving of other evidence under subsection (e) of this section. In the case of an emergency or exigent circumstances, the Commissioner shall notify the Attorney General and U.S. Attorney as soon as possible before applying to the Superior Court of Washington County. (g) At the request of the securities regulator of another state or a foreign jurisdiction, the Commissioner may provide assistance if the requesting regulator states that it is conducting an investigation to determine whether a person has violated, is violating, or is about to violate a law or rule of the other state or foreign jurisdiction relating to securities matters that the requesting regulator administers or enforces. The Commissioner may provide the assistance by using the authority to investigate and the powers conferred by this section as the Commissioner determines is necessary or appropriate. The assistance may be provided without regard to whether the conduct described in the request would also constitute a violation of this chapter or other law of this State if occurring in this State. In deciding whether to provide the assistance, the Commissioner may consider whether the requesting regulator is permitted and has agreed to provide assistance reciprocally within its state or foreign jurisdiction to the Commissioner when requested, whether compliance with the request would violate or prejudice the public policy of this State, and the availability of resources and employees of the Commissioner to carry out the request for assistance. Added 2005, No. 11, § 1, eff. July 1, 2006; amended 2013, No. 29, § 20, eff. May 13, 2013; 2017, No. 11, § 11; 2025, No. 142 (Adj. Sess.), § 51, eff. July 1, 2026.

9 V.S.A. § 5603 Civil enforcement

5603. Civil enforcement (a) If the Commissioner believes that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter or that a person has, is, or is about to engage in an act, practice, or course of business that materially aids a violation of this chapter or a rule adopted or order issued under this chapter, the Commissioner may maintain an action in the Superior Court of Washington County to enjoin the act, practice, or course of business and to enforce compliance with this chapter or a rule adopted or order issued under this chapter. (b) In an action under this section and on a proper showing, the court may: (1) issue a permanent or temporary injunction, restraining order, or declaratory judgment; (2) order other appropriate or ancillary relief, which may include: (A) an asset freeze, accounting, writ of attachment, writ of general or specific execution, and appointment of a receiver or conservator, that may be the Commissioner, for the defendant or the defendant’s assets; (B) ordering the Commissioner to take charge and control of a defendant’s property, including investment accounts and accounts in a depository institution, rents, and profits; to collect debts; and to acquire and dispose of property; (C) imposing a civil penalty up to $15,000.00 for each violation; an order of rescission, restitution, or disgorgement directed to a person that has engaged in an act, practice, or course of business constituting a violation of this chapter or the predecessor act or a rule adopted or an order issued under this chapter or the predecessor act. The court may increase a civil penalty amount by not more than $5,000.00 per violation for violations involving a person who is a vulnerable adult as defined in 33 V.S.A. § 6902(34). The limitations on civil penalties contained in this subdivision shall not apply to settlement agreements; and (D) ordering the payment of prejudgment and postjudgment interest; or (3) order such other relief as the court considers appropriate. (c) The Commissioner may not be required to post a bond in an action or proceeding under this chapter. Added 2005, No. 11, § 1, eff. July 1, 2006; amended 2017, No. 80, § 4; 2025, No. 142 (Adj. Sess.), § 52, eff. July 1, 2026.

9 V.S.A. § 5604 Administrative enforcement

5604. Administrative enforcement (a) If the Commissioner determines that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter or that a person has materially aided, is materially aiding, or is about to materially aid an act, practice, or course of business constituting a violation of this chapter or a rule adopted or order issued under this chapter, the Commissioner may: (1) issue an order directing the person to cease and desist from engaging in the act, practice, or course of business or to take other action necessary or appropriate to comply with this chapter; (2) issue an order denying, suspending, revoking, or conditioning the exemptions for a broker-dealer under subdivision 5401(b)(1)(D) or (F) of this title or an investment adviser under subdivision 5403(b)(1)(C) of this title; or (3) issue an order under section 5204 of this title. (b) An order under subsection (a) of this section is effective on the date of issuance. Upon issuance of the order, the Commissioner shall promptly serve each person subject to the order with a copy of the order and a notice that the order has been entered. The order must include a statement of any civil penalty or costs of investigation the Commissioner will seek, a statement of the reasons for the order, and notice that, within 15 days after receipt of a request in a record from the person, the matter will be scheduled for a hearing. If a person subject to the order does not request a hearing and none is ordered by the Commissioner within 30 days after the date of service of the order, the order, including the imposition of a civil penalty or requirement for payment of the costs of investigation sought in a statement in the order, becomes final as to that person by operation of law. If a hearing is requested or ordered, the Commissioner, after notice of and opportunity for hearing to each person subject to the order, may modify or vacate the order or extend it until final determination. (c) If a hearing is requested or ordered pursuant to subsection (b) of this section, a hearing must be held in accordance with the provisions of 3 V.S.A. chapter 25 (Administrative Procedure Act). A final order may not be issued unless the Commissioner makes findings of fact and conclusions of law in a record in accordance with the requirements of 3 V.S.A. § 812. The final order may make final, vacate, or modify the order issued under subsection (a) of this section. (d) In a final order under subsection (b) or (c) of this section, the Commissioner may impose a civil penalty of not more than $15,000.00 for each violation. The Commissioner may also require a person to make restitution or provide disgorgement of any sums shown to have been obtained in violation of this chapter, plus interest at the legal rate. The limitations on civil penalties contained in this subsection shall not apply to settlement agreements. In accordance with 8 V.S.A. § 24(e), the Commissioner may increase a civil penalty amount by not more than $5,000.00 per violation for violations involving a person who is a vulnerable adult as defined in 33 V.S.A. § 6902(34). (e) For purposes of determining any sanction to be imposed under subsections (a)–(d) of this section, the Commissioner shall consider among other factors: (1) the extent that the violation harmed or might have harmed investors, access to capital markets, or public confidence in the securities industry and the integrity of capital markets; (2) whether the respondent knew or had reason to know that the violation existed and whether the violation was intentional; (3) the economic benefit, if any, that could have been anticipated from an intentional or knowing violation; (4) the length of time the violation existed; (5) the deterrent effect of the penalty; (6) the economic resources of the respondent; (7) the respondent’s record of compliance; and (8) any other aggravating or mitigating circumstances. (f) In a final order, the Commissioner may charge the actual cost of an investigation or proceeding for a violation of this chapter or a rule adopted or order issued under this chapter. (g) If a petition for judicial review of a final order is not filed in accordance with section 5609 of this title, the Commissioner may file a certified copy of the final order with the clerk of a court of competent jurisdiction. The order so filed has the same effect as a judgment of the court and may be recorded, enforced, or satisfied in the same manner as a judgment of the court. (h) If a person does not comply with an order under this section, the Commissioner may petition a court of competent jurisdiction to enforce the order. The court may not require the Commissioner to post a bond in an action or proceeding under this section. If the court finds, after service and opportunity for hearing, that the person was not in compliance with the order, the court may adjudge the person in civil contempt of the order. The court may impose a further civil penalty against the person for contempt in an amount not less than $5,000.00 but not greater than $25,000.00 for each violation and may grant any other relief the court determines is just and proper in the circumstances. Added 2005, No. 11, § 1, eff. July 1, 2006; amended 2011, No. 78 (Adj. Sess.), § 34; 2017, No. 80, § 5; 2023, No. 110 (Adj. Sess.), § 19, eff. July 1, 2024; 2025, No. 142 (Adj. Sess.), § 53, eff. July 1, 2026.

9 V.S.A. § 5605 Rules, forms, orders, interpretative opinions, and hearings

5605. Rules, forms, orders, interpretative opinions, and hearings (a) The Commissioner may: (1) issue forms and orders and, after notice and comment and in accordance with the provisions of 3 V.S.A. chapter 25 (Administrative Procedure Act), may adopt and amend rules necessary or appropriate to carry out this chapter and may repeal rules, including rules and forms governing registration statements, applications, notice filings, reports, and other records; (2) by rule, define terms, whether or not used in this chapter, but those definitions may not be inconsistent with this chapter; and (3) by rule, classify securities, persons, and transactions and adopt different requirements for different classes. (b) Under this chapter, a rule or form may not be adopted or amended, or an order issued or amended, unless the Commissioner finds that the rule, form, order, or amendment is necessary or appropriate in the public interest or for the protection of investors and is consistent with the purposes intended by this chapter. In adopting, amending, and repealing rules and forms, section 5608 of this chapter applies in order to achieve uniformity among the states and coordination with federal laws in the form and content of registration statements, applications, reports, and other records, including the adoption of uniform rules, forms, and procedures. (c) Subject to 15 U.S.C. § 80b-15(h) and 15 U.S.C. § 80b-222, the Commissioner may require that a financial statement filed under this chapter be prepared in accordance with generally accepted accounting principles in the United States and comply with other requirements specified by rule adopted or order issued under this chapter. A rule adopted or order issued under this chapter may establish: (1) subject to 15 U.S.C. § 80b-15(h), the form and content of financial statements required under this chapter; (2) whether unconsolidated financial statements must be filed; and (3) whether required financial statements must be audited by an independent certified public accountant. (d) The Commissioner may in the Commissioner’s sole discretion provide interpretative opinions or issue determinations that the Commissioner will not institute a proceeding or an action under this chapter against a specified person for engaging in a specified act, practice, or course of business if the determination is consistent with this chapter. A rule adopted or order issued under this chapter may establish a reasonable charge for interpretative opinions or determinations that the Commissioner will not institute an action or a proceeding under this chapter. (e) A penalty under this chapter may not be imposed for and liability does not arise from conduct that is engaged in or omitted in good faith believing it conforms to a rule, form, or order of the Commissioner under this chapter. (f) A hearing in an administrative proceeding under this chapter must be conducted in public unless the Commissioner for good cause consistent with this chapter determines that the hearing will not be so conducted. Added 2005, No. 11, § 1, eff. July 1, 2006.

9 V.S.A. § 5606 Administrative files and opinions

5606. Administrative files and opinions (a) The Commissioner shall maintain, or designate a person to maintain, a register of applications for registration of securities; registration statements; notice filings; applications for registration of broker-dealers, agents, investment advisers, and investment adviser representatives; notice filings by federal covered investment advisers that are or have been effective under this chapter or the predecessor act; notices of claims of exemption from registration or notice filing requirements contained in a record; orders issued under this chapter or the predecessor act; and interpretative opinions or no action determinations issued under this chapter. (b) The Commissioner shall make all rules, forms, interpretative opinions, and orders available to the public. (c) The Commissioner shall furnish a copy of a record that is a public record or a certification that the public record does not exist to a person that so requests. A rule adopted under this chapter may establish a reasonable charge for furnishing the record or certification. A copy of the record certified or a certificate by the Commissioner of a record’s nonexistence is prima facie evidence of a record or its nonexistence. Added 2005, No. 11, § 1, eff. July 1, 2006.

9 V.S.A. § 5607 Public records; confidentiality

5607. Public records; confidentiality (a) Except as otherwise provided in subsection (b) of this section, records obtained by the Commissioner or filed under this chapter, including a record contained in or filed with a registration statement, application, notice filing, or report, are public records and are available for public examination. (b) The following records are not public records and are not available for public examination and copying under the Public Records Act or under subsection (a) of this section: (1) a record obtained by the Commissioner in connection with an audit or inspection under subsection 5411(d) of this title or an investigation under section 5602 of this title; (2) a part of a record filed in connection with a registration statement under sections 5301 and 5303 through 5305 of this title or a record under subsection 5411(d) of this title that contains trade secrets or confidential information if the person filing the registration statement or report has asserted a claim of confidentiality or privilege that is authorized by law; (3) a record that is not required to be provided to the Commissioner or filed under this chapter and is provided to the Commissioner only on the condition that the record will not be subject to public examination or disclosure; (4) a nonpublic record received from a person specified in subsection 5608(a) of this title; (5) any Social Security number, residential address unless used as a business address, and residential telephone number unless used as a business telephone number, contained in a record that is filed; (6) a record obtained by the Commissioner through a designee of the Commissioner that a rule or order under this chapter determines has been: (A) expunged from the Commissioner’s records by the designee; or (B) determined to be nonpublic or nondisclosable by that designee if the Commissioner finds the determination to be in the public interest and for the protection of investors; (7) records relating to the notice requirement in subsection 5602(f) of this title; and (8) records otherwise exempt from public disclosure pursuant to 1 V.S.A. § 317(c). (c) If disclosure is for the purpose of a civil, administrative, or criminal investigation, action, or proceeding or to a person specified in subsection 5608(a) of this title, the Commissioner may disclose a record obtained in connection with an audit or inspection under subsection 5411(d) of this title or a record obtained in connection with an investigation under section 5602 of this title. Added 2005, No. 11, § 1, eff. July 1, 2006; amended 2013, No. 29, § 21, eff. May 13, 2013.

9 V.S.A. § 5608 Uniformity and cooperation with other agencies

5608. Uniformity and cooperation with other agencies (a) The Commissioner shall, in his or her discretion, cooperate, coordinate, consult, and, subject to section 5607 of this chapter, share records and information with the securities regulator of another state, Canada, a Canadian province or territory, a foreign jurisdiction, the Securities and Exchange Commission, the U.S. Department of Justice, the Commodity Futures Trading Commission, the Federal Trade Commission, the Securities Investor Protection Corporation, a self-regulatory organization, a national or international organization of securities regulators, a federal or state banking and insurance regulator, and a governmental law enforcement agency to effectuate greater uniformity in securities matters among the federal government, self-regulatory organizations, states, and foreign governments. (b) In cooperating, coordinating, consulting, and sharing records and information under this section and in acting by rule, order, or waiver under this chapter, the Commissioner shall, in his or her discretion, take into consideration in carrying out the public interest the following general policies: (1) maximizing effectiveness of regulation for the protection of investors; (2) maximizing uniformity in federal and state regulatory standards; and (3) minimizing burdens on the business of capital formation, without adversely affecting essentials of investor protection. (c) The cooperation, coordination, consultation, and sharing of records and information authorized by this section includes: (1) establishing or employing one or more designees as a central depository for registration and notice filings under this chapter and for records required or allowed to be maintained under this chapter; (2) developing and maintaining uniform forms; (3) conducting a joint examination or investigation; (4) holding a joint administrative hearing; (5) instituting and prosecuting a joint civil or administrative proceeding; (6) sharing and exchanging personnel; (7) coordinating registrations under sections 5301 and 5401 through 5404 of this chapter and exemptions under section 5203 of this chapter; (8) sharing and exchanging records, subject to section 5607 of this chapter; (9) formulating rules, statements of policy, guidelines, forms, and interpretative opinions and releases; (10) formulating common systems and procedures; (11) notifying the public of proposed rules, forms, statements of policy, and guidelines; (12) attending conferences and other meetings among securities regulators, which may include representatives of governmental and private sector organizations involved in capital formation, deemed necessary or appropriate to promote or achieve uniformity; and (13) developing and maintaining a uniform exemption from registration for small issuers, and taking other steps to reduce the burden of raising investment capital by small businesses. Added 2005, No. 11, § 1, eff. July 1, 2006.

9 V.S.A. § 5609 Judicial review

5609. Judicial review Any person aggrieved and directly affected by a final order issued by the Commissioner under this chapter may appeal to the Superior Court of Washington County. The appeal shall be heard by the court de novo. The filing of an appeal shall not stay enforcement of the order, but the court may order a stay on such terms as it deems proper. Added 2005, No. 11, § 1, eff. July 1, 2006.

9 V.S.A. § 5610 Jurisdiction

5610. Jurisdiction (a) Sections 5301 and 5302, subsections 5401(a), 5402(a), 5403(a), and 5404(a) and sections 5501, 5506, 5509, and 5510 of this chapter do not apply to a person that sells or offers to sell a security unless the offer to sell or the sale is made in this State or the offer to purchases or the purchase is made and accepted in this State. (b) Subsections 5401(a), 5402(a), 5403(a), 5404(a), and sections 5501, 5506, 5509, and 5510 of this chapter do not apply to a person that purchases or offers to purchase a security unless the offer to purchase or the purchase is made in this State or the offer to sell or the sale is made and accepted in this State. (c) For the purpose of this section, an offer to sell or to purchase a security is made in this State, whether or not either party is then present in this State, if the offer: (1) originates from within this State; or (2) is directed by the offeror to a place in this State and received at the place to which it is directed. (d) For the purpose of this section, an offer to purchase or to sell is accepted in this State, whether or not either party is then present in this State, if the acceptance: (1) is communicated to the offeror in this State and the offeree reasonably believes the offeror to be present in this State and the acceptance is received at the place in this State to which it is directed; and (2) has not previously been communicated to the offeror, orally or in a record, outside this State. (e) An offer to sell or to purchase is not made in this State when a publisher circulates or there is circulated on the publisher’s behalf in this State a bona fide newspaper or other publication of general, regular, and paid circulation that is not published in this State, or that is published in this State but has had more than two-thirds of its circulation outside this State during the previous 12 months or when a radio or television program or other electronic communication originating outside this State is received in this State. A radio or television program or other electronic communication is considered as having originated in this State if either the broadcast studio or the originating source of transmission is located in this State, unless: (1) the program or communication is syndicated and distributed from outside this State for redistribution to the general public in this State; (2) the program or communication is supplied by a radio, television, or other electronic network with the electronic signal originating from outside this State for redistribution to the general public in this State; (3) the program or communication is an electronic communication that originates outside this State and is captured for redistribution to the general public in this State by a community antenna or cable, radio, cable television, or other electronic system; or (4) the program or communication consists of an electronic communication that originates in this State, but which is not intended for distribution to the general public in this State. (f) Subsections 5403(a), 5404(a), and 5405(a) and sections 5502, 5505, and 5506 of this chapter apply to a person if the person engages in an act, practice, or course of business instrumental in effecting prohibited or actionable conduct in this State, whether or not either party is then present in this State. (g) This section does not limit the scope of personal jurisdiction to the extent such jurisdiction may be established pursuant to 12 V.S.A. § 913 (the Vermont “long arm” statute). Added 2005, No. 11, § 1, eff. July 1, 2006.

9 V.S.A. § 5611 Service of process

5611. Service of process (a) A consent to service of process complying with this section required by this chapter must be signed and filed in the form required by a rule or order under this chapter. A consent appointing the Commissioner the person’s agent for service of process in a noncriminal action or proceeding against the person, or the person’s successor or personal representative under this chapter, or a rule adopted or order issued under this chapter after the consent is filed, has the same force and validity as if the service were made personally on the person filing the consent. A person that has filed a consent complying with this subsection in connection with a previous application for registration or notice filing need not file an additional consent. (b) If a person, including a nonresident of this State, engages in an act, practice, or course of business prohibited or made actionable by this chapter or a rule adopted or order issued under this chapter and the person has not filed a consent to service of process under subsection (a) of this section, the act, practice, or course of business constitutes the appointment of the Commissioner as the person’s agent for service of process in a noncriminal action or proceeding against the person or the person’s successor or personal representative. (c) Service under subsection (a) or (b) of this section may be made by providing a copy of the process to the office of the Commissioner, but it is not effective unless: (1) the plaintiff, which may be the Commissioner, promptly sends notice of the service and a copy of the process, return receipt requested, to the defendant or respondent at the address set forth in the consent to service of process or, if a consent to service of process has not been filed, at the last known address or takes other reasonable steps to give notice; and (2) the plaintiff files an affidavit of compliance with this subsection in the action or proceeding on or before the return day of the process, if any, or within the time that the court or the Commissioner in a proceeding before the Commissioner allows. (d) Service pursuant to subsection (c) of this section may be used in a proceeding before the Commissioner or by the Commissioner in a civil action in which the Commissioner is the moving party. (e) If process is served under subsection (c) of this section, the court or the Commissioner in a proceeding before the Commissioner shall order continuances as are necessary or appropriate to afford the defendant or respondent reasonable opportunity to defend. Added 2005, No. 11, § 1, eff. July 1, 2006.

9 V.S.A. § 5612 Severability clause

5612. Severability clause If any provision of this chapter or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application, and to this end, the provisions of this chapter are severable. Added 2005, No. 11, § 1, eff. July 1, 2006.

9 V.S.A. § 5613 Collection and disposition of fees

5613. Collection and disposition of fees (a) The fees provided for in this chapter shall be collected by the Commissioner and covered into the State Treasury except as provided in subsections (b) and (e) of this section. (b) There is hereby created a fund to be known as the Securities Regulation and Supervision Fund. The Fund shall be used for the purpose of providing the Commissioner the means to administer the provisions of this chapter. All agent and investment adviser representative fees received pursuant to subsections 5410(b) and (d) of this title, and all examination fees and investigation expenses received pursuant to section 5614 of this title shall be transmitted to the State Treasurer and credited to this Fund. All payments from the Securities Regulatory and Supervision Fund for the maintenance of staff and associated expenses, including contractual services as necessary, shall be disbursed from the State Treasury only upon warrants issued by the Commissioner of Finance and Management, after receipt of proper documentation regarding services rendered and expenses incurred. The Fund shall be administered pursuant to 32 V.S.A. chapter 7, subchapter 5. (c) At the end of each fiscal year, the balance in the Securities Regulatory and Supervision Fund shall be transferred to the General Fund. (d) The Commissioner of Finance and Management may anticipate receipts to the Securities Regulatory and Supervision Fund and issue warrants based thereon. (e) In any fiscal year in which revenues deposited in the Financial Institution Supervision Fund established by 8 V.S.A. § 19(f) are insufficient to support the annual appropriation to the Banking Division, the Commissioner may transfer no more than a sum necessary to meet the shortfall from the Fund established by this section to the Financial Institution Supervision Fund. Added 2007, No. 49, § 23; 2007, No. 65, § 398; amended 2007, No. 65 § 87, eff. June 4, 2007; 2007, No. 192 (Adj. Sess.), § 6.001; 2013, No. 1, § 80.

9 V.S.A. § 5614 Recovery of expenses

5614. Recovery of expenses (a) Whenever it is necessary for the Commissioner to incur any expense in connection with any application, notification, registration, license, investigation, or administrative proceeding, the Commissioner may require that any person who is the subject of such application, notification, registration, license, investigation, or administrative proceeding pay the reasonable costs incurred by the Department. (b) The Commissioner may impose a reasonable fee for the expense of conducting an examination, audit, or inspection under this chapter, including reimbursement to the Commissioner for actual traveling and lodging expenses of the Commissioner or employee in connection with such examination, audit, or inspection. (c) The provisions of this section are in addition to, and not in limitation of, any other provision of this chapter regarding fees and recovery of expenses. Added 2007, No. 49, § 24; 2007, No. 76, § 25, eff. June 7, 2007.

9 V.S.A. § 5616 Vermont Financial Services Education And Victim Restitution Special Fund

5616. Vermont Financial Services Education And Victim Restitution Special Fund (a) Purpose. The purpose of this section is to provide: (1) funds for the purposes specified in subsection 5601(d) of this title; (2) restitution assistance to victims of securities violations who: (A) were awarded restitution in a final order issued by the Commissioner or were awarded restitution in the final order in a legal action initiated by the Commissioner; (B) have not received the full amount of restitution ordered before the application for restitution assistance is due; and (C) demonstrate to the Commissioner’s satisfaction that there is no reasonable likelihood that they will receive the full amount of restitution in the future; and (3) funds for the purposes specified in section 5617 of this title. (b) Definitions. As used in this section: (1) “Claimant” means a person who files an application for restitution assistance under this section. (2) “Dependent child” means a person who falls within the definition of “qualifying child” as defined in 26 U.S.C. § 152, as may be amended, with respect to the victim or the victim’s surviving spouse as of the date the final order is issued. (3) “Final order” means an order issued by the Commissioner that disposes of a securities violation claim or claims or an order in a legal action initiated by the Commissioner in the Superior Court of Washington County that disposes of a securities violation claim or claims. (4) “Fund” means the Vermont Financial Services Education and Victim Restitution Special Fund created by this section. (5) “Securities violation” means a violation of this chapter and any related administrative rules. (6) “Victim” means a person who was awarded restitution in a final order. (7) “Vulnerable adult” means: (A) a person who meets the definition of vulnerable adult under 33 V.S.A. § 6902(34); or (B) a person who is at least 60 years of age. (c) Eligibility. (1) The claimant shall be limited to the victim or, in the case of a deceased victim, the deceased victim’s surviving spouse or dependent child. (2) The Commissioner shall not award securities restitution assistance under this section: (A) unless the victim is a natural person who was a resident of Vermont at the time of the securities violation addressed in the final order; (B) to more than one claimant per victim; (C) unless the person ordered to pay restitution has not paid the full amount of restitution owed to the victim before the application for restitution assistance from the fund is due; (D) if there was no award of restitution in the final order; or (E) if the victim: (i) sustained the monetary injury as a result of: (I) participating or assisting in the securities violation; or (II) attempting to commit or committing the securities violation; or (ii) profited or would have profited from the securities violation. (d) Application for restitution assistance and maximum amount of restitution assistance award. (1) The Commissioner may adopt procedures and forms for application for restitution assistance under this section. (2) An application must be received by the Commissioner within two years after the deadline for payment of restitution established in the final order. (3) Except as provided in subdivision (4) of this subsection, the maximum award from the Fund for each claimant shall be the lesser of $25,000.00 or 25 percent of the amount of unpaid restitution awarded in a final order. (4) If the victim was a vulnerable adult at the time of the securities violation addressed in the final order, the maximum award from the Fund shall be the lesser of $50,000.00 or 50 percent of the amount of unpaid restitution awarded in the final order. (5) The following information provided in or with an application for restitution assistance is confidential: (A) the claimant’s and victim’s name, date of birth, physical address, mailing address, email address, and phone number; (B) each of the items listed in subdivisions 2430(10)(A)(i)–(vii) of this title pertaining to the claimant or victim; and (C) any other information provided in or with an application for restitution assistance that alone, or in combination with the other information provided in or with the application, would allow a person to identify the claimant or victim with reasonable certainty. (e) Vermont Financial Services Education and Victim Restitution Special Fund. The Vermont Financial Services Education and Victim Restitution Special Fund, pursuant to 32 V.S.A. chapter 7, subchapter 5, is created to provide funds for the purposes specified in this section, in subsection 5601(d) of this title, and in section 5617 of this title. All monies received by the State for use in financial services education initiatives pursuant to subsection 5601(d) of this title, in providing uncompensated victims restitution pursuant to this section, or in providing whistleblower awards pursuant to section 5617 of this title shall be deposited into the Fund. The Commissioner may direct a party to deposit a sum not to exceed 15 percent of the total settlement amount into the Fund in conjunction with settling an enforcement matter within the Department’s jurisdiction, as described in 8 V.S.A. § 11(a). Interest earned on the Fund shall be retained in the Fund. (f) Award not subject to execution, attachment, or garnishment. An award made by the Commissioner under this section is not subject to execution, attachment, garnishment, or other process. (g) State’s liability for award. The Commissioner shall have the discretion to suspend applications and determine award amounts based on the solvency of the Fund and the designation of monies in the Fund to the other purposes established for the Fund. The State shall not be liable for any determination made under this section. (h) Subrogation of rights of State. (1) The State is subrogated to the rights of the person awarded restitution under this chapter to the extent of the award. (2) The subrogation rights are against the person ordered to pay restitution to the victim for the securities violation addressed in the final order. (i) Forfeiture of restitution award. (1) A person shall not engage in dishonesty, forgery, fraud, or deceit in connection with an application for restitution assistance. (2) A person found by the Commissioner or a court to have engaged in dishonesty, forgery, fraud, or deceit in connection with an application for restitution assistance shall forfeit to the Department any amount paid in a restitution assistance award and may be subject to penalties and other remedies available pursuant to section 5508, 5603, or 5604 of this title or other law. (j) Rulemaking authority. The Commissioner may adopt rules to implement this section. (Added2019, No. 57, § 17a; amended 2021, No. 139 (Adj. Sess.), § 21, eff. May 27, 2022; 2023, No. 110 (Adj. Sess.), § 20, eff. July 1, 2024; 2025, No. 142 (Adj. Sess.), § 54, eff. July 1, 2026.)

9 V.S.A. § 5617 Vermont Whistleblower Award and Protection Act

5617. Vermont Whistleblower Award and Protection Act (a) Purpose. The purpose of this section is to provide: (1) protection from retaliation for whistleblowers and internal reporters who comply with the requirements in this section; and (2) monetary awards to whistleblowers who voluntarily provide original information that leads to the successful enforcement of an administrative or judicial action under chapter 150 of this title. (b) Definitions. As used in this section, (1) “Monetary sanction” means any monies, including penalties, disgorgement, and interest ordered to be paid as a result of an administrative or judicial action. (2) “Original information” means information that is: (A) derived from the independent knowledge or analysis of a whistleblower; (B) not already known to the Commissioner from any other source, unless the whistleblower is the original source of the information; (C) not exclusively derived from an allegation made in an administrative or judicial hearing; in a governmental report, hearing, audit, or investigation; or from the news media, unless the whistleblower is the source of the information; and (D) provided to the Commissioner for the first time after the date of the enactment of this section. (3) “Whistleblower” means an individual who, alone or jointly with others, provides the State or other law enforcement agency with information pursuant to the provisions set forth in this section, and the information relates to a possible violation of state or federal securities laws, including any rules or regulations adopted or promulgated under such laws, that has occurred, is ongoing, or is about to occur. (c) Authority to make a whistleblower award. Subject to the provisions of this section, the Commissioner may award an amount to one or more whistleblowers who voluntarily provide, in writing, in the form and manner required by the Commissioner, original information that leads to the successful enforcement of an administrative or judicial action under chapter 150 of this title. (d) Anonymous whistleblower complaints. Any individual who anonymously makes a claim for a whistleblower award shall be represented by counsel if the individual anonymously submits the information upon which the claim is based. Prior to the payment of an award, a previously anonymous whistleblower shall disclose the whistleblower’s identity and provide such other information as the Commissioner may require, directly or through counsel for the whistleblower. Failure to provide such information shall be a basis to deny compensation under this section. (e) Amount of a whistleblower award. If the Commissioner determines to make one or more awards under this section, the aggregate amount of awards that may be awarded in connection with an administrative or judicial action may not be less than 10 percent nor more than 30 percent of the monetary sanctions imposed and collected in the related administrative or judicial action. (f) Discretion to determine the amount of a whistleblower award. The determination of the amount of an award made under this section shall be in the discretion of the Commissioner consistent with subsections (e) and (h) of this section. (g) Source of payment of whistleblower award. Any whistleblower awards paid under this section shall be paid from the fund established in section 5616 of this title. (h) Factors used to determine the amount of a whistleblower award. In determining the amount of an award under this section, the Commissioner shall consider: (1) the significance of the original information provided by the whistleblower to the success of the administrative or judicial action; (2) the degree of assistance provided by the whistleblower in connection with the administrative or judicial action; (3) the programmatic interest of the Commissioner in deterring violations of the securities laws by making awards to whistleblowers who provide original information that leads to the successful enforcement of such laws; and (4) any other factors the Commissioner considers relevant. (i) Disqualification from award. The Commissioner shall not provide an award to a whistleblower under this section if the whistleblower: (1) is convicted of a crime in connection with the administrative or judicial action for which the whistleblower otherwise could receive an award; (2) acquires the original information through the performance of an audit of financial statements required under the securities laws and for whom providing the original information violates 15 U.S.C. § 78j-1; (3) fails to timely submit information to the Commissioner in such form as the Commissioner may prescribe; (4) knowingly or recklessly makes a false, fictitious, or fraudulent statement or representation as part of, or in connection with, the original information provided or the administrative or judicial proceeding for which the original information was provided; (5) in the whistleblower’s submission, its other dealings with the Commissioner, or in its dealings with another authority in connection with a possible violation or related action, knowingly or recklessly makes any false, fictitious, or fraudulent statement or representation or uses or provides any false writing or document knowing that or having a reckless disregard as to whether it contains any false, fictitious, or fraudulent statement or entry; (6) has a legal duty to report the original information to the Commissioner; (7) is, or was at the time the whistleblower acquired the original information submitted to the Commissioner, a member, officer, or employee of the Department of Financial Regulation, the Securities and Exchange Commission, any other state securities regulatory authority, a self-regulatory organization, the Public Company Accounting Oversight Board, or any law enforcement organization; (8) is, or was at the time the whistleblower acquired the original information submitted to the Commissioner, a member, officer, or employee of a foreign government, any political subdivision, department, agency, or instrumentality of a foreign government, or any other foreign financial regulatory authority as that term is defined in 15 U.S.C. § 78c(a)(52); (9) is the spouse, parent, child, or sibling of, or resides in the same household as, the Commissioner or an employee of the Department of Financial Regulation; or (10) directly or indirectly acquires the original information provided to the Commissioner from a person: (A) who is subject to subdivision (i)(2) of this section, unless the information is not excluded from that person’s use, or provides the Commissioner with information about possible violations involving that person; (B) who is a person described in subdivision (i)(7), (8), or (9) of this section; or (C) with the intent to evade any provision of this section. (j) Protection of whistleblowers and internal reporters. (1) No employer may terminate, discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner retaliate against, an individual because of any lawful act done by the individual: (A) in providing information to the State or other law enforcement agency concerning a possible violation of state or federal securities laws, including any rules or regulations adopted or promulgated under such laws, that has occurred, is ongoing, or is about to occur; (B) in initiating, testifying in, or assisting in any investigation or administrative or judicial action of the Commissioner or other law enforcement agency based upon or related to such information; (C) in making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002 (15 U.S.C. § 7201 et seq.), the Securities Act of 1933 (15 U.S.C. § 77a et seq.), the Securities Exchange Act of 1934 (15 U.S.C. § 78a et seq.), 18 U.S.C. § 1513(e), any other law, rule, or regulation subject to the jurisdiction of the Securities and Exchange Commission, or chapter 150 of this title or a rule adopted under chapter 150 of this title; or (D) in making disclosures to a person with supervisory authority over the employee or to such other person working for the employer who has the authority to investigate, discover, or terminate misconduct regarding matters subject to the jurisdiction of the Commissioner or the Securities and Exchange Commission. (2) Notwithstanding subdivision (j)(1) of this section, an individual is not protected under this section if: (A) the individual knowingly or recklessly makes a false, fictitious, or fraudulent statement or representation as part of, or in connection with, the original information provided or the administrative or judicial proceeding for which the original information was provided; or (B) the individual, in its dealings with its supervisor, the State, law enforcement, or any other authority in connection with a possible violation or related action, knowingly or recklessly makes any false, fictitious, or fraudulent statement or representation or uses or provides any false writing or document knowing that or having a reckless disregard as to whether it contains any false, fictitious, or fraudulent statement or entry. (3) An individual who alleges any act of retaliation in violation of subdivision (j)(1) of this section may bring an action for the relief provided in subdivision (j)(6) of this section in the court of original jurisdiction for the county or state where the alleged violation occurs, the individual resides, or the person against whom the action is filed resides or has a principal place of business. (4) A subpoena requiring the attendance of a witness at a trial or hearing conducted under subdivision (j)(3) of this section may be served at any place in the United States. (5) An action under subdivision (j)(3) of this section may not be brought more than the latest of: (A) six years after the date on which the violation of subdivision (j)(1) of this section occurred; (B) three years after the date when facts material to the right of action are known or reasonably should have been known by the employee alleging a violation of subdivision (j)(1) of this section; (C) but in no event more than 10 years after the date on which the violation occurs. (6) A court may award as relief for an individual prevailing in an action brought under this subsection: (A) reinstatement with the same compensation, fringe benefits, and seniority status that the individual would have had, but for the retaliation; (B) two times the amount of back pay otherwise owed to the individual, with interest; (C) compensation for litigation costs, expert witness fees, and reasonable attorneys’ fees; (D) actual damages; (E) an injunction to restrain a violation; or (F) any combination of these remedies. (7) Information that could reasonably be expected to reveal the identity of a whistleblower is exempt from public disclosure under 1 V.S.A. § 316. This subsection does not limit the ability of any person to present evidence to a grand jury or to share evidence with potential witnesses or defendants in the course of an ongoing criminal investigation. (8) No person may take any action to impede an individual from communicating directly with the Commissioner or the Commissioner’s staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement with respect to such communications, except with respect to: (A) agreements concerning communications covered by the attorney-client privilege, unless disclosure of that information would otherwise be permitted by an attorney under applicable state attorney conduct rules or otherwise; and (B) information obtained in connection with legal representation of a client on whose behalf an individual or the individual’s employer or firm are providing services, and the individual is seeking to use the information to make a whistleblower submission for the individual’s own benefit, unless disclosure would otherwise be permitted by an attorney pursuant to applicable state attorney conduct rules or otherwise. (9) The rights and remedies provided for in this section may not be waived by any agreement, policy form, or condition of employment, including by a predispute arbitration agreement. (10) Nothing in this section shall be deemed to diminish the rights, privileges, or remedies of any individual under any federal or state law, or under any collective bargaining agreement. (k) The Commissioner may adopt such rules as may be necessary or appropriate to implement the provisions of this section consistent with its purpose. Added 2021, No. 139 (Adj. Sess.), § 22, eff. May 27, 2022.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/09/150Fetched: 10/21/2026