Effective 28 Aug 2017

362.1100. Order of removal — notice of charges, when, procedure. — 1. The secretary or the secretary's designee may issue and serve upon a family trust company and a family trust company affiliated party a notice of charges if the secretary or the secretary's designee has reason to believe that the family trust company affiliated party is engaging or has engaged in conduct that:

(1) Demonstrates that the family trust company does not satisfy the requirements of a family trust company or of a foreign family trust company under sections 362.1010 to 362.1117;

(2) Is a prohibited act or practice under section 362.1065;

(3) Violates section 362.1035, 362.1040, 362.1050, 362.1055, 362.1060, or 362.1080;

(4) Violates any other law involving fraud or moral turpitude that constitutes a felony;

(5) Violates a state or federal law related to anti-money laundering, customer identification, or any related rule or regulation;

(6) Is a willful violation of a rule of the secretary;

(7) Is a willful violation of an order of the secretary;

(8) Is a willful breach of a written agreement with the secretary; or

(9) Is an act of commission or omission or a practice that the secretary or the secretary's designee has reason to believe is a breach of trust or fiduciary duty.

2. The notice of charges shall contain a statement of facts and notice of opportunity for a hearing.

3. If no hearing is requested within thirty days after the date of service of the notice of charges or if a hearing is held and the secretary or secretary's designee finds that any of the charges in the notice of charges are true, the secretary or secretary's designee may enter an order that removes the family trust company affiliated party from the family trust company or that restricts or prohibits the family trust company affiliated party from participating in the affairs of the family trust company.

4. A contested or default order of removal is effective when reduced to writing and served upon the family trust company and the family trust company affiliated party. An uncontested order of removal is effective as agreed.

5. (1) The chief executive officer of a family trust company or the person holding the equivalent office shall promptly notify the secretary if such person has actual knowledge that a family trust company affiliated party is charged with a felony in a state or federal court.

(2) If a family trust company affiliated party is charged with a felony in a state or federal court or, in a court of a foreign country with which the United States maintains diplomatic relations, is charged with an offense that involves a violation of law relating to fraud, currency transaction reporting, money laundering, theft, or moral turpitude and such offense is equivalent to a felony charge under state or federal law, then the secretary or the secretary's designee may enter an emergency order that suspends the family trust company affiliated party or that restricts or prohibits participation by such party in the affairs of the family trust company effective upon service of the order on the company and such family trust company affiliated party.

(3) The order shall contain notice of opportunity for a hearing, at which the family trust company affiliated party may request a postsuspension hearing to show that continued service to or participation in the affairs of the family trust company does not pose a threat to the interests of the family trust company. In accordance with applicable rules, the secretary or secretary's designee shall notify the family trust company affiliated party whether the order suspending or prohibiting the family trust company affiliated party from participating in the affairs of the family trust company will be rescinded or otherwise modified. The emergency order shall remain in effect, unless otherwise modified by the secretary or secretary's designee, until the criminal charge is disposed. The emergency order shall dissolve upon the final, unappealed dismissal of all charges against or the acquittal of the family trust company affiliated party. Such occurrences shall not prohibit the secretary or the secretary's designee from instituting proceedings under subsection 1 of this section. If the family trust company affiliated party charged is convicted or pleads guilty or nolo contendere, regardless of adjudication, the emergency order shall become final.

6. No family trust company affiliated party removed from office under this section shall be eligible for reinstatement to such office or to any other official position in a family trust company or financial institution in this state except with the written consent of the secretary. A family trust company affiliated party who is removed, restricted, or prohibited from participation in the affairs of a family trust company under this section may petition the secretary for modification or termination of such removal, restriction, or prohibition.

7. The resignation, termination of employment or participation, or separation from a family trust company of the family trust company affiliated party shall not affect the jurisdiction and authority of the secretary or the secretary's designee to issue a notice and proceed under this section against the family trust company affiliated party if such notice is served within six years of the date such person ceased to be a family trust company affiliated party.

­­--------

(L. 2017 H.B. 292)