Code of the District of Columbia

§ 31–3521. Sanctions for violations.

(a) If the directors or trustees of a corporation issued a certificate of authority under this chapter knowingly violate, or knowingly permit any of the officers, employees, or agents of the corporation to violate, any provision of this chapter, any other provision of law made applicable to the corporation by this chapter, or any regulation promulgated under this chapter or such other provisions of law, the certificate of authority granted to the corporation may be suspended or revoked upon a determination of such violation by the Mayor.

(b) Forfeiture of monetary gain; civil money penalties.

(1) The Mayor may require a corporation issued a certificate of authority under this chapter, and any director, trustee, officer, employee, or agent of such a corporation, that the Mayor finds has willfully violated any provision of this chapter, any other provision of law made applicable to the corporation by this chapter, or any regulations promulgated under this chapter or such other provision of law to forfeit any monetary gain derived thereby to the Treasurer of the District of Columbia or to any person who has suffered financial injury or damage as a result of the violation. Upon a determination of such violation by the Mayor, the Mayor also may impose a civil penalty against a corporation in an amount not to exceed $25,000 for each violation, and as to an individual an amount not to exceed $5,000 for each type of violation, not to exceed $25,000 in total for each type of violation.

(2) For the purposes of this section, the terms “violate” and “violation” denote any action, alone or with another or others, that involves causation, participation in, counseling, aiding, or abetting.

(3) A person or organization against whom a forfeiture or penalty has been imposed under this section may, within 30 days after service of written notice thereof by hand delivery or mail, make a written request for a hearing on such action by delivering the request to the Department of Insurance, Securities, and Banking. The hearing shall commence in not fewer than 10 days nor more than 30 days from the date on which the request for a hearing is received by the Department of Insurance, Securities, and Banking. The hearing and its disposition shall be governed by the rules for contested cases set forth in Title 26 (Insurance) of the District of Columbia Municipal Regulations (26 DCMR).

(4) The resignation, separation, or termination of a director, trustee, officer, employee, or agent (including a separation caused by the liquidation of a corporation issued a certificate of authority under this chapter) shall not affect the jurisdiction and authority of the Mayor to issue any notice and proceed under this subsection against any such individual, if the notice is served before the end of the 3-year period beginning on the date on which the individual ceased to be a director, trustee, officer, employee, or agent.

(c) Whenever the Mayor determines that a corporation issued a certificate of authority under this chapter, or that a director, trustee, officer, employee, or agent of such a corporation has committed or is about to commit a violation of this chapter or of any rule, regulation, or order issued hereunder, the Mayor may issue an order directing such corporation or individual to cease and desist from violating or continuing to violate this chapter or any such rule, regulation, or order, subject to the notice, hearing, and other procedural requirements in subsection (b) of this section.

(d) The foregoing penalties and remedies shall be in addition to, and not in lieu of, any other penalty which may be imposed pursuant to any other provision of law which this chapter makes applicable to a corporation and its officers, directors, employees, and agents. This section shall not be construed to prevent any person financially damaged by a director, trustee, officer, employee, or agent of a corporation from bringing a separate cause of action in a court of competent jurisdiction.

(e) Whenever the Mayor determines that a corporation issued a certificate of authority under this chapter, or that a director, trustee, officer, employee, or agent of such a corporation, has willfully violated this chapter, the Mayor shall report such violation to the Corporation Counsel of the District of Columbia. Willful violations of this chapter shall be deemed misdemeanors, except where other provisions of this chapter or other provisions of law made applicable by this chapter provide for greater criminal liability. Prosecutions authorized by this section shall be upon information filed in the Superior Court of the District of Columbia by the Corporation Counsel or any of his or her assistants. Any corporation convicted of a willful violation of this chapter shall be fined in an amount not to exceed $50,000 for each violation. In addition to any fines or punishments imposed for violations of any other laws, any individual convicted of a willful violation of this chapter shall be fined in an amount not to exceed $5,000 for each violation; or, if such violation involves the deliberate perpetration of a fraud upon the corporation, its subscribers, or the Mayor, imprisoned for not more than 1 year, or both.


(Apr. 9, 1997, D.C. Law 11-245, § 22, 44 DCR 1158; June 11, 2004, D.C. Law 15-166, § 4(u)(4), 51 DCR 2817.)

Prior Codifications

1981 Ed., § 35-4721.

Effect of Amendments

D.C. Law 15-166, in par. (3) of subsec. (b), substituted “Department of Insurance, Securities, and Banking” for “Department of Insurance and Securities Regulation” both times it appears.

Emergency Legislation

For temporary (90 day) amendment of section, see § 4(u)(4) of Consolidation of Financial Services Emergency Amendment Act of 2004 (D.C. Act 15-381, February 27, 2004, 51 DCR 2653).