Quick Answer
Injunctions are judicial, not administrative: the Administrator must petition a court, which then may appoint a receiver and grant rescission, restitution, or disgorgement. The Administrator cannot order any of these alone, and the court cannot require the Administrator to post a bond to seek them.
While cease and desist orders are administrative actions the Administrator issues directly, injunctions require the Administrator to go to court. This section covers the judicial remedies available when administrative orders are not enough.
What Happens When the Administrator Goes to Court?
The Administrator may bring an action in court to enjoin acts or practices that violate the Act, or any rule or order under it. Unlike cease and desist orders, injunctions are judicial remedies; the Administrator must petition a court to grant them. The Administrator may also pursue a cease and desist order at the same time; the two remedies are not mutually exclusive.
Upon a proper showing, the court shall grant:
- Permanent or temporary injunctions
- Restraining orders
- Writs of mandamus (a court order compelling a required act)
What Other Remedies Can the Court Order?
In the same court action, the court may also:
- Appoint a receiver or conservator for the defendant or the defendant's assets
- Enter orders of rescission (undoing a transaction)
- Order restitution (making victims whole by returning their money)
- Order disgorgement (forcing the violator to surrender ill-gotten profits)
| Remedy | What It Does | Who Orders It |
|---|---|---|
| Injunction | Stops the prohibited activity | Court |
| Rescission | Undoes the transaction | Court |
| Restitution | Returns money to victims | Court |
| Disgorgement | Strips violator of profits | Court |
| Receiver/Conservator | Takes control of assets | Court |
Exam Tip: Gotchas
- Rescission, restitution, and disgorgement are court-ordered remedies, not administrative orders. The Administrator requests them; the court grants them.
- The Administrator alone cannot order a person to return money to investors; that requires a court order. If the exam asks "who can order restitution," the answer is always the court.
Does the Administrator Have to Post a Bond?
The court may not require the Administrator to post a bond when seeking injunctive relief. This removes a potential financial barrier to the Administrator pursuing enforcement actions.
Exam Tip: Gotchas
- The no bond requirement benefits the Administrator, not the defendant. The Administrator can seek an injunction without putting up any money.
What Should You Check on Exam Day?
- Injunctions, rescission, restitution, and disgorgement are all court remedies the Administrator can only request, never order alone.
- Upon a proper showing, the court shall grant the injunction, restraining order, or writ of mandamus; this is mandatory language, not discretionary.
- The Administrator never has to post a bond to seek an injunction.