s. 517.2015 1996 SUPPLEMENT TO FLORIDA STATUTES 1995 s. 519.101

pteted or ceases to be active. The information compiled by the department in such an investigation or examina­tion shall remain confidential and exempt from s. 119.07(1) after the department's investigation or exami­nation is completed or ceases to be active if the depart­ment submits the information to any law enforcement or administrative agency or regulatory organization for fur­ther investigation. Such information shall remain confi­dential and exempt from s. 119.07( 1) until that agency's or organization's investigation is completed or ceases to be active. For purposes of this section, an investigation or examination shall be considered "active" so long as the department or any law enforcement or administra­tive agency or regulatory organization is proceeding with reasonable dispatch and has a reasonable good faith belief that the investigation or examination may lead to the filing of an administrative, civil, or criminal proceeding or to the denial or conditional grant of a license, registration, or permit. This section shall not be construed to prohibit disclosure of information which is required by law to be filed with the department and which, but for the investigation or examination, would be subject to s. 119.07(1 ).

(b) Except as necessary for the department to enforce the provisions of this chapter, a consumer com­plaint and other information relative to an investigation or examination shall remain confidential and exempt from s. 119.07(1) after the investigation or examination is completed or ceases to be active to the extent disclosure would:

1. Jeopardize the integrity of another active investi-gation or examination.

2. Reveal the name, address, telephone number, social security number, or any other identifying number or information of any complainant, customer, or account holder.

3. Disclose the identity of a confidential source. 4. Disclose investigative techniques or procedures. 5. Reveal a trade secret as defined in s. 688.002. (c) In the event that department personnel are or

have been involved in an investigation or examination of such nature as to endanger their lives or physical safety or that of their fami lies, then the home addresses, tele­phone numbers , places of employment, and photo­graphs of such personnel, together with the home addresses, telephone numbers, photographs , and places of employment of spouses and children of such personnel and the names and locations of schools and day care facilities attended by the children of such per­sonnel are confidential and exempt from s. 119.07(1 ).

(d) Nothing in this section shall be construed to pro­hibit the department from providing information to any law enforcement or administrative agency or regulatory organization. Any law enforcement or administrative agency or regulatory organization receiving confidential information in connection with its official duties shall maintain the confidentiality of the information so long as it would otherwise be confidential.

(e) All information obtained by the department from any person which is only made available to the depart­ment on a confidential or similarly restricted basis shall be confidential and exempt from s. 119.07(1). This exemption shall not be construed to prohibit disclosure

of information which is required by law to be filed with the department or which is otherwise subject to s. 119.07(1 ).

(2) If information subject to subsection (1) is offered in evidence in any administrative, civil, or criminal pro­ceeding, the presiding officer may, in his discretion, pre­vent the disclosure of information which would be confi­dential pursuant to paragraph (1 )(b).

(3) A privilege against civil liability is granted to a person who furnishes information or evidence to the department, unless such person acts in bad faith or with malice in providing such information or evidence.

HistoTy.- s. 4. ch. 92- 9: s. 337. ch. 96-406.

517.221 Cease and desist orders.-(1) The department may issue and serve upon a per­

son a cease and desist order whenever the department has reason to believe that such person is violating, has violated, or is about to violate any provision of this chap­ter, any rule or order promulgated by the department, or any written agreement entered into with the depart­ment.

(2) Whenever the department finds that conduct described in subsection (1) presents an immediate dan­ger to the public requiring an immediate final order, it may issue an emergency cease and desist order reciting with particularity the facts underlying such findings. The emergency cease and desist order is effective immedi­ately upon service of a copy of the order on the respon· dent named therein and remains effective for 90 days. If the department begins nonemergency cease and desist proceedings under subsection (1 ), the emer­gency cease and desist order remains effective until conclusion of the proceedings under ss. 120.569 and 120.57.

(3) The department may impose and collect an administrative fine against any person found to have vio­lated any provision of this chapter, any rule or order pro­mulgated by the department , or any written agreement entered into with the department in an amount not to exceed $5,000 for each such violation. All fines collected hereunder shall be deposited as received in the Anti­F raud Trust Fund.

Hiatory.-s. 5, ch. 78-435: s. 5, ch. 00-·254: ss. 2, 3, ch. Bl - 318; s . 11, ch. BS-85: ss. 14, 15, ch. 90- 362: s. 4, ch. 91- 429; s. 244, ch. 96-410.

CHAPTER 519

EQUITY EXCHANGES

519.101 Florida equity exchange feasibi lity study; structure, operation, and regulation.

519.101 Florida equity exchange feasibility study; structure, operation, and regulation.-

(1) There may be created one or more Florida equity exchanges, with one or more offices each, upon a deter­mination by the Comptroller that each such exchange has a reasonable promise of successful operation, will promote economic development, will produce net eco­nomic benefits in the state, and will not expose the pub­lic to undue risk of financial loss. This determination shall

1845

s. 519.101 1996 SUPPLEMENT TO FLORIDA STATUTES 1995 5. 519.101

be based on the results of a feasibility study concerning the possible structure, operation, and regulation of each such exchange, to be carried out under the supervision of the Comptroller. The Secretary of 1commerce shall provide the Comptroller any needed advice on eco­nomic development aspects of the feasibility study. Said feasibility study shall evaluate to what extent securities laws may limit the transferability of investments in which any exchange would deal; to what extent companies financed through securities in which the exchange would deal would prefer a stable group of investors; to what extent the particular investment objectives of potential participants in any exchange might be incon­sistent with an exchange operation; and the possibility that the frequency of investment opportunities of the type in which an exchange would deal would be too low to economically operate any exchange. The determina­tion of the Comptroller shall constitute a final order as defined in s. 120.52 and shall be subject to the provi­sions of chapter 120. Nothing in this section, however, shall be construed to require the expenditure of state funds for the purpose of conducting any such feasibility study. For the purposes of this section, the term "exchange" shall apply to any such Florida equity exchange proposed or created under this section.

(2) The purpose of the exchange shall be to provide a marketplace for the negotiation, arrangement, exchange, sale, purchase, brokerage, syndication, and underwriting, and all activities incidental thereto, of investment opportunities, in an institutionalized and, to the maximum extent possible, self-regulated fashion.

(3) Within 30 days following such determination, a committee shall be appointed to write the constitution and bylaws of the exchange. The Comptroller may pro­vide technical assistance to the committee on the devel­opment of the constitution and bylaws of the exchange. The committee shall consist of 15 members, 11 mem­bers to be appointed by the Governor, 2 members to be appointed by the Speaker of the House of Representa­tives, and 2 members to be appointed by the President of the Senate. The chairman shall be elected by a major­ity of the committee. The committee shall transmit such proposed constitution, bylaws, and other recommenda­tions for the approval of the Comptroller no later than 90 days following the first meeting of the committee. In reviewing the constitution and the bylaws of the exchange, as well as any other recommendations made to the Comptroller by the committee, the Comptroller shall consider whether such constitution, bylaws, and recommendations are reasonably consistent with the public interest and the efficient functioning of the exchange. The Comptroller shall approve the constitu­tion and bylaws of the exchange if he finds that they specifically describe the types of business that the exchange will conduct, that such business activities are not inconsistent with state or federal law, that the form of business organization of the exchange complies with statutory requirements, and that the interest of owners or members of the exchange would be adequately pro­tected. The submission of the proposed constitution and bylaws to the Comptroller shall be deemed an appli­cation for a license and shall be subject to the provisions of s. 120.80(9).

(4) The exchange shall have full authority to function 60 days after its constitution and bylaws are approved by the Comptroller. The initial Board of Governors of the exchange shall consist of the members of the committee who shall serve until the first election pursuant to the constitution and bylaws. If the constitution and bylaws are disapproved by the Comptroller, the committee, in consultation with the Comptroller, shall have 60 days from the date of such disapproval within which to submit an acceptable constitution and bylaws.

(5) The constitution and bylaws of the exchange shall include provision that:

(a) There shall be no less than 9 nor more than 15 governors of the exchange, at least one-third of whom shall not be members of the exchange.

(b) The principal offices of each exchange and the principal offices of its members shall be located within this state for the purpose of conducting the type of busi­ness described in subsection (2). Any exchange may have such other offices around the state as it deems necessary from time to time, subject to a determination by the Comptroller that such additional offices will be necessary for the efficient operation of the exchange and will be in the public interest.

(c) All members and applicants for membership on the exchange shall submit all financial information rea­sonably required by the Comptroller.

(d) The ex.change shall establish or participate in a security fund which shall be capitalized or underwritten in such form and amount as will reasonably protect per­sons transacting business through the exchange from any harm or loss occasioned by the insolvency of any member of the exchange. The formation of such security fund and the adequacy of the financial security provided thereby shall be subject to the approval of the Depart­ment of Banking and Finance based Upon the types and amounts of transactions effected through the facilities of the exchange.

(e) Rules shall be adopted prescribing eligibility for membership and the voting power, duties, and rights to participate in the conduct and management of the affairs of the exchange by the members thereof, such rights and duties to include, without limitation, the man­ner and form of conducting business, financial stability requirements, dues, membership fees, resolution of dis­pute mechanisms, and all other matters necessary or appropriate to conduct any business permitted herein; however, such rules shall not impose any limit on the number of members of any such exchange. Any amend­ments to the constitution and bylaws shall be subject to the approval of the Comptroller.

(f) Elections to the Board of Governors of the exchange shall be held once every 2 years, with those persons receiving the greatest number of votes cast being elected thereto.

(6) If the exchange contemplated by this section is established, the Comptroller shall furnish the chairmen of the finance and taxation committees of the Legisla­ture with copies of its constitution and bylaws. Upon receipt of the constitution and bylaws, the Legislature shall consider what tax policy and tax exemptions are needed to facilitate successful operation of the exchange.

1846

s. 519.101 1996 SUPPLEMENT TO FLORIDA STATUTES 1995 s. 520.9965

(7) If the exchange contemplated by this section is finally established, the Comptroller shall forthwith adopt rules providing for the reimbursement by the exchange or any member thereof of the actual costs incurred by the Comptroller in connection with the regulation and supervision of the exchange. As used in this section, "actual costs' means all direct and indirect costs and expenses incurred by the Comptroller in connection with the exchange including, without limitation, general administrative costs, travel expenses, salaries, and other benefits given to persons involved in the regula­tion and supervision of the exchange. The Comptroller shall have the power to make any allocations that are deemed reasonable and necessary and may require the exchange or any members to pay interim assessments related to estimated final assessments.

(8) The Florida securities laws and rules shall apply to the exchange and to its members.

(9) The Comptroller may establish limitations on investments in members of the exchange by any person or company, consistent with the public interest and the efficient functioning of the exchange.

Hietory.-s. 2, ch. 86-152; s . 2, ch. 86-180; s . 2, ch. 66-216; s . 36, ch. 91-220; s. 245, ch. 96-410.

1Note. - Section 20.17, which created the Department of Commerce, was repealed effective December 31. 1996, by s. 3, ch. 96-320.

CHAPTER 520

RETAIL INSTALLMENT SALES

PARTY

DEPARTMENT REGULATION OF SALES AND FINANCE

520.994 Powers of department. 520.9965 Confidentiality of information relating to

investigations and examinations.

520.994 Powers of department.-( 1) The department may issue and serve subpoenas

to compel the attendance of witnesses and the produc­tion of documents, papers, books, records, and other evidence before it in any matter pertaining to this chap­ter. The department may administer oaths and affirma­tions to any person whose testimony is required . If any person refuses to testify, produce books, records, and documents, or otherwise refuses to obey a subpoena issued under this section, the department may present its petition to a court of competent jurisdiction in or for the county in which such person resides or has its princi­pal place of business, whereupon the court shall issue its rule nisi requiring such person to obey forthwith the subpoena issued by the department or show cause for failing to obey such subpoena. Unless the person shows sufficient cause for failing to obey the subpoena. the court shall for.thwith direct such person to obey the sub­poena, subject to such punishment as the court may direct, including, but not limited to, the restraint, by injunction or by appointment of a receiver, of any trans­fer, pledge, assignment, or other disposition of such per­son's assets or any concealment, alteration, destruc-

lion, or other disposition of subpoenaed books, records, or documents as the court deems appropriate, until such person has fully complied with such subpoena and the department has completed its investigation or exam­ination. The department is entitled to the summary pro­cedure provided in s. 51.011, and the court shall advance the cause on its calendar. Costs incurred by the department to obtain an order granting, in whole or in part, its petition shall be taxed against the subpoe­naed person, and failure to comply with such order is a contempt of court. Witnesses are entitled to the same fees and mileage as they are entitled to by law for attending as witnesses in the circuit court, unless such examination or investigation is held at the place of busi­ness or residence of the witness.

(2) In addition to any other powers conferred upon it to enforce or administer this chapter, the department may bring an action in any court of competent jurisdic­tion to enforce or administer any provision of this chap­ter, any rule or order adopted pursuant to this chapter, or any written agreement entered into with the depart­ment. In such action, the department may seek tempo­rary or permanent injunction, appointment of a receiver or administrator, or an order of restitution. If in any such action the department alleges that five or more persons have been defrauded by acts constituting violations of this chapter, it shall state the circumstances constitut­ing such fraud with particularity and may seek any appropriate remedy at law or in equity, provided the remedy does not impair any rights granted by law to any holder in due course as defined in 1s. 673.302.

(3) In addition to any other powers conferred upon it to enforce or administer this chapter, the department may issue and serve upon a person a cease and desist order whenever the department finds that such person is violating, has violated, or is about to violate any provi­sion of this chapter, any rule or order adopted pursuant to this chapter, or any written agreement entered into with the department. Any such order shall contain a notice of the rights provided by ss. 120.569 and 120.57.

(4) In addition to any other powers conferred upon it to enforce or administer this chapter, the department may impose and collect an administrative fine against any person found to have violated any provision of this chapter, any rule or order adopted pursuant to this chap­ter, or any written agreement entered into with the department, in an amount not to exceed $1,000 for each violation.

(5) The department may adopt rules and perform such other acts as are necessary or convenient for the proper administration, enforcement, and interpretation of this chapter.

History.-ss. 34, 36. ch. 90-103; s. 4, ch. 91-429; s . 246, ch. 96-410. 1Hote.- Repealed bys. 1, ch. 92- 62

520.9965 Confidentiality of information relating to investigations and examinations.-

(1 )(a) Except as otherwise provided by this section, information relative to an investigation or examination by the department pursuant to this chapter, including any consumer complaint, is confidential and exempt from s. 119.07(1) until the investigation or examination is com­pleted or ceases to be active. The information compiled

1847