Quick Answer
When it appears a violation has occurred or is about to occur, the Administrator may issue a cease and desist order directly, ask a court to enjoin the conduct, or both. Upon a proper showing, a court must grant an injunction, restraining order, or writ of mandamus, and may also appoint a receiver or order rescission, restitution, or disgorgement.
With civil liabilities (private lawsuits) and criminal penalties (state prosecution) covered, let's turn to the judicial remedies the Administrator can request from the courts under the Uniform Securities Act (USA). These are the enforcement tools that bridge administrative power and court authority.
What Two Remedies Can the Administrator Pursue?
When it appears that any person has engaged or is about to engage in a violation, the Administrator may pursue either or both:
- Cease and desist order: issued by the Administrator directly, with or without a prior hearing
- Court action: bring an action in the appropriate court to enjoin the acts or practices
The key distinction: cease and desist orders are administrative (the Administrator issues them alone), while injunctions and other court remedies are judicial (only a court can grant them).
Think of it this way: The Administrator can tell someone "stop what you're doing" on their own authority (cease and desist). But to freeze someone's assets, appoint a receiver, or force them to return money, the Administrator must ask a judge.
What Can a Court Order Once the Administrator Asks?
Upon a proper showing, the court must grant:
Injunctive Relief:
- Permanent or temporary injunction: ordering a person to stop (or not start) violating conduct
- Restraining order: emergency short-term relief
- Writ of mandamus: ordering a person to perform a required act
Upon a proper showing, the court may also grant:
Monetary and Equitable Relief:
- Receiver or conservator: court appoints someone to manage the defendant's assets
- Rescission: unwinding the transaction
- Restitution: returning money to harmed investors
- Disgorgement: surrendering ill-gotten profits
Exam Tip: Gotchas
- The Administrator is not required to post a bond when seeking injunctive relief. Unlike private parties, the Administrator can go to court without putting up money as a guarantee.
- Upon a proper showing, an injunction, restraining order, or writ of mandamus shall be granted, but a receiver and any rescission/restitution/disgorgement order are discretionary with the court.
Which Remedies Are Administrative and Which Are Judicial?
| Remedy | Who Issues It | Requires a Court Proceeding? |
|---|---|---|
| Cease and desist order | Administrator | No (can be issued without prior hearing) |
| Injunction | Court (on Administrator's request) | Yes |
| Receiver/conservator | Court | Yes |
| Rescission/restitution/disgorgement | Court | Yes |
Exam Tip: Gotchas
- The Administrator does not grant injunctions or appoint receivers. Only a court can do that. The Administrator requests these remedies but cannot issue them alone.
- If it involves money or managing assets, it requires a court. Rescission, restitution, disgorgement, and receiver appointments are all judicial (not administrative).
- Cease and desist orders do not require a prior hearing. The Administrator can issue one unilaterally, with or without a hearing beforehand.
What Should You Check on Exam Day?
- Can you name the two remedies the Administrator can pursue directly versus request from a court?
- Do you know which court remedies the court shall grant (injunction, restraining order, writ of mandamus) versus which are discretionary (receiver, rescission, restitution, disgorgement)?
- Do you know the Administrator is not required to post a bond when seeking injunctive relief?
- Can you identify that a cease and desist order needs no prior hearing, while every judicial remedy requires a court proceeding?