S-4826               _______________________________________________

                                         SUBSTITUTE SENATE BILL NO. 6111

                        _______________________________________________

State of Washington                              50th Legislature                              1988 Regular Session

By Senate Committee on Financial Institutions & Insurance (originally sponsored by Senator Moore)

Read first time 2/5/88.

AN ACT Relating to securities; adding new sections to chapter 21.20 RCW; and prescribing penalties.

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

NEW SECTION. Sec. 1.  A new section is added to chapter 21.20 RCW to read as follows:

          (1) A broker-dealer or investment adviser, or any person acting with express or implied authority on behalf of a broker-dealer or investment adviser, who permits an employee of such broker-dealer or investment adviser to resign from employment in lieu of termination from employment because the employee has violated this chapter is guilty of a class C felony punishable by imprisonment for a term not to exceed five years, or a fine not to exceed ten thousand dollars, or both.

          (2) For purposes of subsection (1) of this section, "employee" means any broker-dealer salesperson or investment adviser salesperson who is employed by a broker-dealer or investment adviser.

NEW SECTION. Sec. 2.  A new section is added to chapter 21.20 RCW to read as follows:

          Any termination pursuant to section 1 of this act shall be promptly reported to the director by the broker-dealer or investment advisor, or any person acting with express or implied authority on behalf of a broker-dealer or investment advisor.  The director shall enter an order denying, suspending, or revoking the broker-dealer salesperson's or investment advisor salesperson's registration pursuant to RCW 21.20.110.

NEW SECTION. Sec. 3.  A new section is added to chapter 21.20 RCW to read as follows:

          (1) A broker-dealer or investment advisor, or any person acting with express or implied authority on behalf of a broker-dealer or investment advisor, shall not employ a person whose registration is denied, suspended, or revoked by order of the director pursuant to section 2 of this act unless after a hearing in which findings of fact and conclusions of law are entered entitling the person to retain or renew their registration, or the director suspends the order entered pursuant to section 2 of this act.

          (2) Any broker-dealer or investment advisor, or any person acting with express or implied authority on behalf of a broker-dealer or investment advisor, who violates subsection (1) of this section shall be guilty of a class C felony.