AN ACT Relating to securities enforcement; and amending RCW 21.20.390 and 21.20.410.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. Section 39, chapter 282, Laws of 1959 as last amended by section 8, chapter 272, Laws of 1981 and RCW 21.20.390 are each amended to read as follows:

Whenever it appears to the director that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, the director may in his or her discretion:

(1) Issue an order directing the person to cease and desist from continuing the act or practice: PROVIDED, That reasonable notice of and opportunity for a hearing shall be given: PROVIDED, FURTHER, That the director may issue a temporary order pending the hearing which shall remain in effect until ten days after the hearing is held and which shall become final if the person to whom notice is addressed does not request a hearing within fifteen days after the receipt of notice; or

(2) The director may, without issuing a cease and desist order, bring an action in any court of competent jurisdiction to enjoin any such acts or practices and to enforce compliance with this chapter or any rule or order hereunder. Upon a proper showing a permanent or temporary injunction, restraining order, or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets, or such other ancillary relief may be granted as appropriate.

A receiver or conservator appointed by the superior court pursuant to this section may, with the approval of the court, exercise all of the powers of the defendant's officers, directors, partners, trustees, or persons who exercise similar powers and perform similar duties, including the filing of a petition for bankruptcy. No action at law or in equity may be maintained by any party against the director, a receiver, or conservator, by reason of exercising such powers or performing such duties pursuant to the order of, or with the approval of, the superior court.

If the director determines it is in the public interest, the director may include in any action authorized by this section a claim for ancillary relief, including but not limited to, a claim for restitution or disgorgement or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action, and the court shall have jurisdiction to award such additional relief.

The director may not be required to post a bond. If the director prevails, the director shall be entitled to a reasonable attorney's fee to be fixed by the court.

(3) The administrator may, after giving reasonable notice and an opportunity for a hearing under this section, impose a fine not to exceed five thousand dollars per violation upon a person found to have engaged in any act or practice constituting a violation of any provision of this chapter or of any rule or order issued under this chapter. The fine is in addition to all other penalties imposed by the laws of this state. The fine shall be deposited in the general fund. If any person fails to pay a fine referred to in this subsection, the amount of the fine is a lien upon all the assets and property of such person in this state and may be recovered by suit by the administrator. Failure of the person to pay a fine also constitutes a forfeiture of his or her right to transact business in this state under this chapter.

(4) Whenever it appears to the director that any person who has received a permit to issue, sell, or otherwise dispose of securities under this chapter, whether current or otherwise, has become insolvent, the director may petition a court of competent jurisdiction to appoint a receiver or conservator for the defendant or the defendant's assets. The director may not be required to post a bond.

((~~(4)~~)) (5) The director may bring an action for restitution or damages on behalf of the persons injured by a violation of this chapter, if the court finds that private civil action would be so burdensome or expensive as to be impractical.

Sec. 2. Section 41, chapter 282, Laws of 1959 as amended by section 29, chapter 68, Laws of 1979 ex. sess. and RCW 21.20.410 are each amended to read as follows:

The director may refer such evidence as may be available concerning violations of this chapter or of any rule or order hereunder to the attorney general or the proper prosecuting attorney, who may in his or her discretion, with or without such a reference, institute the appropriate criminal proceedings under this chapter. The director and his or her deputies, assistants, or employees may, upon request of the prosecuting attorney, assist the prosecuting attorney in presenting the law or facts at the trial.