W. Va. Code R. § 111-1-10

Current through Register Vol. XLI, No. 45, November 8, 2024

Section 111-1-10 - Rules of practice and procedure

The rules included in this section (Sections 10 through 10.8 of these rules) are procedural rules and are adopted pursuant to the provisions of section four hundred twelve, article four, chapter thirty-two of the West Virginia Code, as amended, and they shall govern the practice before the Securities Commissioner, in accordance with the provisions of chapter twenty-nine-a and section four hundred twelve, article four, chapter thirty-two of the West Virginia Code, as amended. These rules do not apply to investigations, except where made specifically applicable.

10.1. Business hours. -- The general office of the Commissioner shall be open from nine a.m. to five p.m. each day, except Saturdays, Sundays and legal holidays.

10.2. Communications. -- All communications, including correspondence, motions and pleadings shall be addressed to and be filed with the State Auditor's Office, Securities Division, West-118, State Capitol Building, Charleston, West Virginia 25305.

10.3. Date of receipt. -- All communications, including correspondence, motions and pleadings shall be deemed to be filed or received on the date on which they are actually received by the Division, party or other person.

10.4. Computation of time. -- Computation of any period of time referred to in the rules shall begin with the first day following that on which the act which initiates such period of time occurs. When the last day of the period so computed is a day on which the office of the Commissioner is closed, the period shall run until the end of the following business day. When such period of time with the intervening Saturdays, Sundays and legal holidays counted is five (5) days or less, the said Saturdays, Sundays and legal holidays shall be excluded from the computation; otherwise such days shall be included in the computation.

10.5. Filing papers. -- Communications addressed to the Commissioner, and petitions, applications, answers and other pleadings, all exhibits, depositions, transcripts, orders and other papers or documents shall be filed in the general offices of the Commissioner, and shall be stamped showing the date of the receipt thereof.

10.6. Notice of proceedings; hearings.

(1) Notice of proceedings; order of proceedings. -- Whenever an order for proceeding is issued by the Commissioner appropriate notice thereof shall be given by the Deputy Commissioner or other duly designated employee of the Commissioner to each party to the proceeding, and any other person entitled to notice, or to the person designated by any such party or person as being authorized to receive on his behalf notice issued by the Commissioner. The parties or persons entitled to notice shall be timely informed of the time, date, place and nature of any hearing and the legal authority and jurisdiction under which the hearing is to be held, and shall be furnished a short and simple statement of the matters of fact and law to be considered and determined. In proceedings in which an answer is directed, the order for the proceeding shall be set for the action proposed and the factual and legal basis alleged therefor, in such detail as will permit a specific response thereto.

(2) Notice of hearing; service of notice. -- The time and place for any hearing in a proceeding shall be fixed with due regard for the public interests and the convenience and necessity of the parties or their representatives. Each party or person entitled to notice shall be given notice of hearing at least twenty-one (21) days prior to the hearing, and such notice may be given by registered mail, or certified mail, addressed to his last known business or residence address or to the address of his agent for service.

(3) Effect of failure to appear. -- If any person who is named in an order for proceeding or any stop-order, revocation order, suspension or termination order, or the like as a person against whom finding may be made or sanctions imposed in the proceeding does not file a notice of appearance in the proceeding within fifteen (15) days after service upon him of the order for proceeding (unless a different time period is specified in the order), or if he fails to appear at a hearing of which he has been duly notified, such person shall be deemed in default and the proceeding or order may be determined against him upon consideration of the order for proceeding, the allegations of which may be deemed to be true. For purpose of this subsection, an answer shall constitute a notice of appearance.

10.7. Answers.

(1) When required. -- In any order issued by the Commissioner, the Commissioner may direct that any party respondent shall file an answer to the allegations contained therein, and any part respondent may file an answer.

(2) Time to file. -- Except where a different period is provided by rule or order, a party respondent directed to file an answer as provided in Section 10.7(1) of these rules shall do so within fifteen (15) days after proper service upon him of the order for proceeding. Any other person admitted to such a proceeding may be required to file an answer within such time as is directed by the presiding hearing officer or the Commissioner. Where amendments to the matters of fact and/or law to be considered in such proceeding are authorized subsequent to the institution of the proceeding, the parties may be required to answer within the matters of fact and/or law to be considered and as amended within seven (7) days after any such amendment has been authorized.

(3) Requirements; effect of failure to deny. -- Unless otherwise directed by the Commissioner, an answer required by Section 10.7 of these rules shall specifically admit, deny or state that the party does not have and is unable to obtain sufficient information to admit or deny each allegation in the order. A statement of a lack of information to admit or deny each allegation in the order. A statement of a lack of information shall have the effect of a denial. Any allegation not denied shall be deemed to be admitted. When a party intends in good faith to deny only a part or a qualification of an allegation, he shall specify so much of it as is true and shall deny only the remainder.

10.8. Replies. -- There shall be no reply other than an answer as provided in Section 10.7 of these rules.

10.9. Amendments. -- Leave to file amendments to any pleading will be allowed or denied as a matter of discretion. Leave to amend shall be freely given as justice requires, and cannot be unreasonably withheld.

10.10. Settlements, agreements and conferences.

(1) Offer of settlement.

(a) Parties may propose in writing offers of settlement which shall be submitted to and considered by the Commissioner where time, the nature of the proceeding and the public interest permit. Such offers may be made at any time during the course of the proceeding;

(b) Upon the agreement and the request of the interested parties, the presiding hearing officer or the Commissioner or his designated employee may express his views regarding the appropriateness of any offer of settlement with the understanding that the request by the parties constitutes a waiver of any right to claim prejudgment by the presiding hearing officer or the Commissioner or his designated employee based on the views the presiding hearing officer or the Commissioner or his designated employee expresses, and said person in any event in his/their discretion may decline to express any view on the offer. Where the Commissioner rejects an offer of settlement, the party making the offer shall be notified of the Commissioner's action and the offer of settlement shall be deemed withdrawn and such offer and any documents relating thereto shall not constitute a part of the record. Where the Commissioner deems it appropriate, he may also give the party making the offer an opportunity to make an oral presentation to the Commissioner.

(2) Conferences. -- At the opening of a hearing or at any other time during the course of any proceeding, to the extent practicable, where time, the nature of the proceeding and the public interest permit, the presiding hearing officer or the Commissioner or his designated employee shall, at the request of any party or upon his own motion, hold or order conferences for the purpose of clarifying and simplifying issues and otherwise facilitating or expediting the proceeding. At the conference or otherwise, the presiding hearing officer, or the Commissioner, or his designated employee, at the request of any party or upon his own motion, where he believes such action would tend to expedite the proceedings or promote fairness, may in his discretion and with due regard for the convenience and necessity of the parties or their attorneys, order a party to furnish where practicable any or all of the following: An outline of his case or defense; the legal theories upon which he will rely; the identity of the witnesses who will testify on his behalf; and copies of or a list of documents which he intends to introduce at the hearing.

10.11. Parties.

(1) Who may become parties. -- Any interested representative, agency, authority or instrumentality of the United States or any interested state, state commission, municipality or other political subdivision of a state shall become a party to any proceeding upon the filing of a written notice of appearance therein.

(2) When intervention granted. -- Except as provided in Subsection (1), Section 10.11, of these rules, no person shall be admitted to a proceeding by intervention unless the Commissioner is satisfied on the basis of the written application of such person (and any evidence taken in connection therewith) that his participation as a party will be in the public interest.

10.12. Consolidation. -- By order of the Commissioner proceedings involving a common question of law or fact may be joined for hearing of any or all of the matters at issue in the proceedings and such proceedings may be consolidated; and the Commissioner may make such orders concerning the conduct of such proceedings as may tend to be necessary to avoid unnecessary costs or delay.

10.13. Service.

(1) By the Commissioner. -- Service of complaints, orders, decisions, pleadings, motions and processes of the agency shall normally be by registered or certified mail.

(2) On the Commissioner. -- For the purposes of proceedings under these rules only, service upon the Commissioner may be made by filing the paper or papers in the general offices of the Commissioner.

(3) Parties and other persons. -- All papers, including, but not limited to, applications, notices, pleadings, petitions, motions, briefs, memoranda and other documents, filed by any party or other person with the Commissioner or a presiding hearing officer shall be served by registered or certified mail upon all parties to the proceedings. Proof of service shall accompany all papers when filed or shall be filed within seven (7) days thereafter.

10.14. Stipulations. -- In the discretion of the Commissioner or his designated employee or the presiding hearing officer, the parties may by stipulation in writing filed with the Commissioner or his designated employee or the presiding hearing officer at any stage of the hearing, agree upon any pertinent facts in the proceeding. In making his findings, the Commissioner or his designated employee or the presiding hearing officer need not be bound by any such stipulation.

10.15. Presiding officer. -- The hearing shall be conducted by a presiding officer who may be a duly appointed hearing officer, the Deputy Commissioner or a member of the Commissioner's staff appointed by the Commissioner to conduct the hearing. The hearing officer shall have all those powers conferred by section one, article five, chapter twenty-nine-a of the West Virginia Code, as amended. A report shall be filed with the Commissioner by the hearing officer after the termination of the hearing.

10.16. Extension of time and adjournments.

(1) Commissioner may extend, postpone or adjourn. -- Except as otherwise provided by law, the Commissioner at any time, or at any time prior to the filing of the initial decision or, if no initial decision is to be filed, at any time prior to the closing of the record, for good cause shown, may extend any time limits prescribed by these rules for filing any papers and may postpone or adjourn any hearing.

(2) Limitations on postponements and adjournments. -- A hearing before the presiding officer, as set out in Section 10.15 of these rules, shall begin at the time and place ordered by the Commissioner: Provided, That within the limits provided by the statute, said presiding officer may for good cause postpone the commencement of the hearing for a reasonable period of time or change the place of hearing. Any convened hearing may be adjourned to such time and place as may be ordered by the Commissioner. The Commissioner's policy is that such postponements or adjournments should normally not exceed thirty (30) days. If the Commissioner or the presiding officer orders a postponement or an adjournment for a period exceeding thirty (30) days, the reasons for so doing shall be stated in his order.

10.17. Evidence.

(1) Presentation and admission. -- All witnesses at a hearing for the purpose of taking evidence shall testify under oath or affirmation, which shall be presented by the presiding hearing officer, as described in Section 10.15 of these rules. Every party shall have the right to present such oral or documentary evidence and to conduct such cross-examination as may be required for a full disclosure of the facts. The said presiding officer shall regulate the course of the hearing as provided in sections one and two, article five, chapter twenty-nine-a of the West Virginia Code, as amended.

(2) Subpoenas. -- The presiding officer, or the Commissioner or his designated employee as described in Section 10.15 of these rules, may issue subpoenas and/or subpoenas duces tecum, according to the provisions of subsection (b), section one, article five, chapter twenty-nine-a, and section four hundred seven, article four, chapter thirty-two, of the West Virginia Code, as amended.

(3) Official notice. -- In any proceeding official notice may be taken by the presiding officer or judicially cognizable facts. All parties shall be notified either before or during the hearing, or by reference in preliminary reports or otherwise, of the material so noticed and they shall be given an opportunity to contest the facts so noticed.

10.18. Oral argument. -- A party shall have the right before the close of the hearing to argue orally, but the presiding officer, as provided by Section 10.15 of these rules, may impose reasonable limitations upon the length of such argument. The Commissioner may in his discretion permit additional oral argument at any time after the close of a hearing: Provided, That all parties are given reasonable opportunity to be heard.

10.19. Briefs. -- Briefs may be filed by a party or any interested person either before or during the course of a hearing or within such time thereafter as the presiding officer, as provided in Section 10.15 of these rules, shall designate. Failure to file a brief shall in no way prejudice the rights of any party.

10.20. Revocation of registration-written findings. -- The presiding officer shall issue written findings of fact and conclusions of law after the termination of a hearing held relative to the revocation of a registration as follows:

(a) The revocation of the registration of a broker-dealer or agent, pursuant to section two hundred four, article two, chapter thirty-two of the West Virginia Code, as amended; or

(b) The revocation of any registration statement pursuant to section three hundred six, article three, chapter thirty-two of the West Virginia Code, as amended.

W. Va. Code R. § 111-1-10