Prohibited activities of exchange facilitators.

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No exchange facilitator or, in the case of an exchange facilitator that is an entity, no owner, officer, director or employee of such exchange facilitator, shall knowingly:

(1) Make any material misrepresentations concerning any exchange facilitator transaction that are intended to mislead;

(2) Pursue a continued or flagrant course of misrepresentation or making false statements through advertising or by any other means;

(3) Fail, within a reasonable time, to account for any money or property belonging to another person that may be in the possession or under the control of the exchange facilitator;

(4) Engage in any conduct constituting fraudulent or dishonest dealings;

(5) Commit any crime related to the exchange facilitation business involving fraud, misrepresentation, deceit, embezzlement, misappropriation of funds, robbery or other theft of property, except that commission of such crime by an officer, director or employee shall not be considered a violation of this section, provided (A) the employment or appointment of such officer, director or employee has been terminated, and (B) no clients of the exchange facilitator were harmed or full restitution has been made to all harmed clients;

(6) Materially fail to fulfill the exchange facilitator's contractual duties to the client to deliver property or funds to the client unless such failure is due to circumstances beyond the control of the exchange facilitator; and

(7) Materially violate any provision of sections 36a-831 to 36a-835, inclusive, or the regulations adopted by the Banking Commissioner in accordance with section 36a-834.

(P.A. 13-135, S. 11.)


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