Administrative Order

To halt an ongoing fraudulent offering and freeze the wrongdoer's assets, the Administrator's proper course is to:

1. A.Issue its own injunction and seize the assets directlyWrong. Administrators lack injunctive and seizure powers of their own.
2. B.Arrest the promoter pending trialWrong. Arrest powers belong to criminal authorities.
3. C.Garnish the promoter's bank accounts by administrative letterWrong-but-tempting. Asset restraints require court orders, not letters.
4. D.Apply to a court for an injunction and the appointment of a receiver over the assetsCorrect. Judicial process supplies the injunction and asset control.

Why: The Administrator may bring an action in the appropriate court for an injunction, appointment of a receiver or conservator over the defendant's assets, and other equitable relief; these judicial remedies complement the Administrator's own administrative orders. Citation: Uniform Securities Act Sec. 408. Takeaway: administrative orders in-house; injunctions and receivers through the courts.

The Administrator, believing a registered broker-dealer is dissipating customer assets, wants to (1) immediately freeze the firm's bank accounts and (2) permanently enjoin the conduct. Under the Uniform Securities Act, the Administrator:

1. A.May freeze the accounts summarily but needs a court for the injunctionHalf right — but the asset freeze is equally a judicial remedy; summary administrative action reaches registrations, not bank accounts.
2. B.Must apply to the appropriate court for the injunction and asset freezeCorrect. Injunctions and freezes are judicial remedies granted on the Administrator's application — never entered administratively.
3. C.May order both remedies directly after notice and hearingEven with full process, administrative power stops short of injunctions and control of bank accounts.
4. D.Must refer the matter to the SEC, which alone may seek injunctionsState administrators seek injunctions in state court under the state act; no SEC referral is required.

Why: The Administrator may issue administrative orders (including cease-and-desist), but injunctions, asset freezes, and appointment of receivers require application to a court of competent jurisdiction. The Administrator enforces through the court; it does not wield those judicial remedies directly. Review: Administrator remedies vs. judicial remedies.