Bill Text: MN SF382 | 2013-2014 | 88th Legislature | Engrossed
Bill Title: Bullion coin dealers regulation, registration requirement, conduct prohibition, enforcement authority, criminal penalties and appropriation
Sponsorship: Partisan Bill (Democrat 4)
Status: (Introduced - Dead) 2013-05-16 - HF substituted on General Orders HF157 [SF382 Detail]
Download: Minnesota-2013-SF382-Engrossed.html
1.2relating to commerce; regulating bullion coin dealers; requiring registration;
1.3prohibiting certain conduct; providing enforcement authority and criminal
1.4penalties; appropriating money;proposing coding for new law as Minnesota
1.5Statutes, chapter 80G.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. [80G.01] DEFINITIONS.
1.8 Subdivision 1. Scope. For purposes of this chapter, the following terms have the
1.9meanings given to them in this section.
1.10 Subd. 2. Bullion coin. "Bullion coin" means any coin containing more than one
1.11percent by weight of silver, gold, platinum, or other precious metal.
1.12 Subd. 3. Bullion coin dealer. (a) Subject to the exceptions in paragraph (b), a
1.13"bullion coin dealer" means any person who buys, sells, solicits, or markets bullion
1.14coins or investments in bullion coins to consumers and is either incorporated, registered,
1.15domiciled, or otherwise located in this state, or who does business with a consumer
1.16domiciled, residing, or otherwise located in this state.
1.17(b) A "bullion coin dealer" does not include any of the following persons:
1.18(1) a person who engages only in wholesale bullion coin transactions with bullion
1.19coin dealers who sell at retail and are properly registered under this chapter;
1.20(2) a person who engages only in transactions at occasional garage or yard sales
1.21held at the seller's residence, farm auctions held at the seller's residence, or estate sales
1.22held at the decedent's residence;
1.23(3) a person who is properly registered pursuant to chapter 80A, or the federal
1.24Securities Exchange Act of 1934 and rules promulgated thereunder as a securities broker
1.25dealer or broker dealer agent;
2.1(4) an auctioneer who auctions coins at auction on behalf of an owner, if the
2.2auctioneer does not take title or ownership of the coins;
2.3(5) a person who engages only in transactions at occasional trade shows where the
2.4consumer is present and the transaction is made at the trade show; or
2.5(6) a federally or state-chartered bank, bank and trust, savings bank, savings
2.6association, or credit union or any operating subsidiary of them.
2.7 Subd. 4. Coin dealer representative. "Coin dealer representative" means any
2.8natural person acting as an employee, contractor, or agent of a bullion coin dealer and
2.9who has interactions with consumers for the purpose of the buying, selling, solicitation, or
2.10marketing of bullion coins or investments in bullion coins.
2.11 Subd. 5. Commissioner. "Commissioner" means the commissioner of commerce.
2.12 Subd. 6. Owner. "Owner" means any person who has an ownership interest in a
2.13bullion coin dealer, regardless of whether directly or indirectly, of more than ten percent
2.14and who is actively engaged in the direction, management, oversight, or operation of the
2.15bullion coin dealer or its business affairs.
2.16 Subd. 7. Person. "Person" has the same meaning given in section 325F.68,
2.17subdivision 3.
2.18 Subd. 8. Precious metal content. "Precious metal content" means the quantity,
2.19measured in grams, of gold, silver, platinum, or other precious metal in a coin and the
2.20percentage that the precious metal constitutes of the total weight of the coin.
2.21 Sec. 2. [80G.02] REGISTRATION.
2.22 Subdivision 1. Registration required. Beginning July 1, 2014, it shall be unlawful
2.23for a bullion coin dealer or coin dealer representative to solicit, market, buy, sell, or deliver
2.24bullion coins or investments in bullion coins to a consumer without being registered by the
2.25commissioner as provided for in this chapter, if the bullion coin dealer has engaged in a
2.26bullion coin transaction or transactions with consumers during the 12-month period prior
2.27to July 1, 2014, that exceed $5,000 in the aggregate, as determined by the transactions'
2.28sale prices. If a bullion coin dealer was not required to be registered beginning on July 1,
2.292014, the bullion coin dealer must submit an application to register itself and each of its
2.30coin dealer representatives within 30 days of reaching $5,000 in the aggregate of bullion
2.31coin transactions with consumers in any 12-month period prior to July 1 of any calendar
2.32year, as determined by the transactions' sale prices. Once a bullion coin dealer is required
2.33to register itself and its coin dealer representatives, the coin dealer must thereafter renew
2.34its registration and the registration of each of its coin dealer representatives in accordance
2.35with this chapter, regardless of the aggregate amount of transactions, unless the person
3.1ceases to be a bullion coin dealer. A coin dealer representative may not buy, sell, solicit,
3.2or market bullion coins or investments in bullion coins on behalf of a bullion coin dealer
3.3unless the dealer is properly registered with the commissioner under this section.
3.4 Subd. 2. Registration obligations. Registrations issued or renewed by the
3.5commissioner under this chapter shall expire on June 30 and must be renewed.
3.6 Subd. 3. Registration application and renewal. The application and renewal
3.7forms shall include the following information, as applicable, which shall be considered by
3.8the commissioner in determining whether to issue a registration and whether to thereafter
3.9renew the registration:
3.10(1) the name, assumed names, doing business as names, including caller
3.11identification names, and business addresses of the bullion coin dealer, the name of
3.12each owner and officer, and the name and primary work location of each coin dealer
3.13representative. A bullion coin dealer who desires to carry on business in more than one
3.14location shall identify each address where business is conducted;
3.15(2) if a bullion coin dealer is doing business under any name other than the dealer's
3.16legal name, documentation that the assumed name has been properly filed with the
3.17secretary of state;
3.18(3) the telephone numbers, including cellular phone numbers, electronic mail
3.19addresses, and Web site domain names used or intended to be used by the bullion coin
3.20dealer and its coin dealer representatives to buy, sell, solicit, market, or deliver to
3.21consumers bullion coin or investments in bullion coin;
3.22(4) the disclosure of all criminal convictions by any court within the last ten years
3.23for the bullion coin dealer and each officer and owner of the bullion coin dealer and
3.24for each of its coin dealer representatives;
3.25(5) the disclosure of any civil judgments in favor of a government entity or
3.26government entity orders entered, filed, or issued against the bullion coin dealer, its
3.27officers and owners, or its coin dealer representatives within the last ten years for violation
3.28of consumer protection laws or unfair trade practice laws or for failure to account to a
3.29consumer for money or property received from the consumer;
3.30(6) the disclosure of any settlement or other agreement with any government entity
3.31within the last ten years resolving concerns that the bullion coin dealer, its officers and
3.32owners, or its coin dealer representatives violated consumer protection or unfair trade
3.33practice laws, or for failure to account to a consumer for money or property received
3.34from the consumer; and
3.35(7) the disclosure of any instance in which the bullion coin dealer, its officers and
3.36owners, and its coin dealer representatives were at any time permanently or temporarily
4.1prohibited by any court of competent jurisdiction or ordered to cease and desist as the
4.2result of a government agency action from engaging in buying, selling, soliciting, or
4.3marketing of bullion coin or investments in bullion coin. A bullion coin dealer may rely on
4.4the screening process provided for in section 80G.05 and the statements of its coin dealer
4.5representatives for the purposes of complying with the disclosure requirements of this
4.6clause relating to coin dealer representatives, provided that such reliance is reasonable, in
4.7good faith, and the bullion coin dealer has no knowledge of information suggesting that
4.8the screening results or statements are inaccurate.
4.9 Subd. 4. Notice of change in registration information. A bullion coin dealer must
4.10provide the commissioner written notice of a change in the dealer's name, assumed names,
4.11doing business as names, business addresses, including all business addresses at which it
4.12or its coin dealer representatives conduct business, owners, electronic mail addresses, Web
4.13site domain names, or telephone numbers used by it or its coin dealer representatives to
4.14buy, sell, solicit, or market to consumers bullion coin or investments in bullion coin no
4.15later than ten days after the change occurs.
4.16 Subd. 5. Registration fee; appropriation. (a) The fee for each registration under
4.17this chapter shall be as follows:
4.18(1) bullion coin dealers: $25; and
4.19(2) coin dealer representatives: $10.
4.20(b) The commissioner, based on the cost of processing registrations, may adjust the
4.21registration fee on an annual basis as needed.
4.22(c) The commissioner must deposit the fees collected under this subdivision in
4.23the state treasury and credit the fee to a separate account in the special revenue fund.
4.24The amount collected under this subdivision is annually appropriated to the agency to
4.25implement and enforce this chapter.
4.26 Sec. 3. [80G.03] REGISTRATION DENIAL, NONRENEWAL, REVOCATION
4.27AND SUSPENSION.
4.28 Subdivision 1. Authority. The commissioner may, by order, suspend, revoke, or
4.29refuse to issue or renew a bullion coin dealer or coin dealer representative registration for
4.30any one or more of the following causes:
4.31(1) providing incorrect, false, misleading, or incomplete information to the
4.32commissioner or refusing to allow a reasonable inspection of information and documents
4.33in the possession of the bullion coin dealer, coin dealer representative, or a third party or
4.34to allow a reasonable inspection of premises;
4.35(2) obtaining or attempting to obtain a registration through misrepresentation or fraud;
5.1(3) having a bullion coin dealer or coin dealer representative registration or its
5.2equivalent, including licensure under section 325F.73, denied, suspended, or revoked by
5.3any locality within the state or other state, province, district, or territory;
5.4(4) being permanently or temporarily enjoined by any court of competent jurisdiction
5.5or being ordered to cease and desist by a government agency from engaging in or
5.6continuing any conduct or practice involving the buying, selling, soliciting, or marketing
5.7of bullion coins, investments in bullion coins, or precious metal to consumers;
5.8(5) violating the provisions of this chapter or of sections 45.027; 325D.43 to
5.9325D.48; 325F.67; 325F.68 to 325F.69; 325F.694; and 325F.73 to 325F.744, or federal
5.10or state taxation or labor law; or
5.11(6) violating a subpoena or order of the commissioner or a court issued pursuant
5.12to this chapter or sections 45.027; 325D.43 to 325D.48; 325F.67; 325F.68 to 325F.69;
5.13325F.694; 325F.70; and 325F.73 to 325F.744.
5.14 Subd. 2. Bullion coin dealer responsibility for actions of coin dealer
5.15representatives. The commissioner may take action against a bullion coin dealer for
5.16any violations of this chapter by its coin dealer representatives conducting activities on
5.17behalf of or at the direction of the bullion coin dealer. The commissioner may also take
5.18action against the coin dealer representative.
5.19 Subd. 3. Other authority of the commissioner. If a registration lapses, is
5.20surrendered, withdrawn, terminated, or otherwise becomes ineffective, the commissioner
5.21may institute a proceeding under this subdivision within two years after the registration
5.22was last effective and enter a revocation order as of the last date on which the registration
5.23was in effect, and impose a civil penalty as provided for in section 45.027, subdivision 6.
5.24 Subd. 4. Effect of revocation. A revocation of a registration prohibits the bullion
5.25coin dealer or coin dealer representatives from making a new application for a registration
5.26for at least two years from the effective date of the revocation.
5.27 Sec. 4. [80G.04] CRIMINAL CONVICTIONS.
5.28 Subdivision 1. Bullion coin dealer registration precluded. The commissioner
5.29must deny an application for registration or renewal of a bullion coin dealer, or revoke such
5.30registration, if the bullion coin dealer or its owners or officers have within the last ten years
5.31been convicted in any court of any financial crime or other crime involving fraud or theft.
5.32 Subd. 2. Coin dealer representative registration precluded. The commissioner
5.33must deny an application for registration or renewal of a coin dealer representative, or
5.34revoke such registration, if the coin dealer representative has within the last ten years been
5.35convicted in any court of any financial crime or other crime involving fraud or theft.
6.1 Sec. 5. [80G.05] SCREENING.
6.2 Subdivision 1. Screening process required. Each bullion coin dealer must
6.3establish procedures to screen each of its owners and officers and each of its coin
6.4dealer representatives prior to submitting the application to the commissioner for initial
6.5registration and at each renewal. The results of such screenings shall be provided to the
6.6commissioner as part of the initial registration and all renewal registrations if requested by
6.7the commissioner.
6.8 Subd. 2. Initial screening. The screening process for initial registration must be
6.9done no more than 60 days before the submission of an application for registration. The
6.10process must include a national criminal history record search, a judgment search, and a
6.11county criminal history search for all counties where the owner, officer, or coin dealer
6.12representative has resided within the immediately preceding ten years. Each bullion
6.13coin dealer shall use a reputable, reliable, and accurate vendor authorized to do business
6.14in Minnesota to conduct the background screening process on its owners, officers, and
6.15coin dealer representatives.
6.16 Subd. 3. Renewal screening. The screening process for the renewal of a
6.17registration must include a national criminal history record search, a judgment search, and
6.18county criminal history search for all counties where the owner, officer, or coin dealer
6.19representative has resided since satisfactorily completing the last screening process
6.20conducted pursuant to this section. Screening for renewal of the owner, officer, and coin
6.21dealer representative registrations must take place no more than 60 days before the
6.22submission of an application for renewal of a registration.
6.23 Sec. 6. [80G.06] SURETY BOND.
6.24 Subdivision 1. Surety bond requirement. Every bullion coin dealer shall maintain a
6.25current, valid surety bond issued by a surety company admitted to do business in Minnesota
6.26in an amount based on the transactions (purchases from and sales to consumers at retail)
6.27during the 12-month period prior to registration, or renewal, whichever is applicable.
6.28The amount of the surety bond shall be as specified in the table below:
7.1 Subd. 2. Action on bond permitted. A consumer injured in money or property by a
7.2bullion coin dealer's or coin dealer representative's failure to provide bullion coins that
7.3the consumer has paid for or failure to remit money or goods owed to the consumer in
7.4connection with the consumer's sale of bullion coins may file a claim with the surety and
7.5if the claim is not paid, is authorized to bring an action based on the bond and recover
7.6against the surety. The commissioner or attorney general may also file a claim and bring
7.7an action on the bond and recover against the surety on behalf of a consumer so injured.
7.8 Sec. 7. [80G.07] PROHIBITED CONDUCT.
7.9 Subdivision 1. Sales practices. No bullion coin dealer or coin dealer representative
7.10shall:
7.11(1) prior to a transaction regarding bullion coins, or concurrent with the delivery
7.12thereof, fail to provide to the consumer in writing, in a clear and conspicuous manner,
7.13the sale or purchase price and the precious metal content of the bullion coins involved in
7.14the transaction. The written notice shall also include the bullion coin dealer's registration
7.15identification information issued by the commissioner, and the Department of Commerce's
7.16e-mail address and telephone number. A copy of the written notice shall be provided to
7.17the consumer and a copy retained by the bullion coin dealer;
7.18(2) fail to deliver bullion coins to a consumer within the time agreed upon with
7.19the consumer or, if no such agreement exists, within 30 days after the consumer has
7.20paid for the coins;
7.21(3) fail to pay a consumer for purchased bullion coins within the time agreed upon
7.22with the consumer or, if no such agreement exists, within 30 days after the consumer
7.23has provided the coins;
7.24(4) fail to provide a written invoice at the time of the transaction specifically
7.25identifying and describing the bullion coins involved in the transaction, the quantity of
7.26bullion coins involved in the transaction, and the bullion coins' sale or purchase price and
7.27precious metal content. The written invoice shall include the bullion coin dealer registration
7.28identification information issued by the commissioner, and the Department of Commerce's
7.29e-mail address and telephone number. A copy of the transaction documentation shall be
7.30provided to the consumer and a copy retained by the bullion coin dealer;
7.31(5) misrepresent the delivery date of bullion coins or payment for bullion coins, or
7.32the dealer or representative's professional qualifications, affiliations, or registration;
7.33(6) misrepresent any material aspect of a bullion coin, including its performance,
7.34efficacy, nature, investment value, central characteristics, liquidity, earnings potential,
7.35or profitability;
8.1(7) misrepresent the manner in which any bullion coins a consumer provides will be
8.2stored or otherwise handled once received;
8.3(8) renegotiate the terms of a sale or purchase after receiving a consumer's payment
8.4or bullion coins without first obtaining the consumer's agreement to renegotiate and
8.5offering the consumer the option to have the payment fully refunded or the entirety of
8.6the bullion coins returned;
8.7(9) fail to respond within three business days to a consumer inquiry about the
8.8delivery status of bullion coins that the consumer has paid for but not yet received or the
8.9status of a payment for bullion coins that the consumer has already provided;
8.10(10) telephone or solicit a consumer, or sell or provide the consumer's name to
8.11any other bullion coin dealer or coin dealer representative, after the consumer requests
8.12not to be contacted;
8.13(11) violate a subpoena or order of the commissioner or a court;
8.14(12) make any communication to a potential buyer or seller of bullion coins that
8.15misrepresents the relationship, if any, between the bullion coin dealer or coin dealer
8.16representative and any government agency or mint;
8.17(13) improperly withhold, misappropriate, or convert any money or properties
8.18received in the course of buying, selling, soliciting, or marketing bullion coins or
8.19investments in bullion coins to consumers;
8.20(14) misrepresent the terms of an actual or proposed purchase or sale of bullion coins
8.21or investment in bullion coins to a consumer; or
8.22(15) violate any other federal, state, or local law or rule related to selling, purchasing,
8.23soliciting, or marketing of bullion coin, investments in bullion coin, or precious metals, or
8.24any federal, state, or local law related to fraudulent, coercive, or dishonest practices, or
8.25federal, state, or local law related to taxation or labor standards.
8.26 Subd. 2. Application. From August 1, 2013, to June 30, 2014, section 80G.07 shall
8.27apply to any bullion coin dealer and its coin dealer representatives if the bullion coin
8.28dealer is engaged in a bullion coin transaction or transactions with consumers which
8.29exceed $5,000 in the aggregate, as determined by the transaction sale prices, during the
8.3012-month period prior to August 1, 2013. On or after July 1, 2014, section 80G.07 shall
8.31apply to any bullion coin dealer and its coin dealer representatives which is or should be
8.32registered in accordance with the provisions of this chapter.
8.33 Sec. 8. [80G.08] CRIMINAL VIOLATION.
8.34A person who conducts business as a bullion coin dealer or as a coin dealer
8.35representative without having first registered with the commissioner, or who carries on
9.1such business after the revocation, suspension, or expiration of a registration, or who
9.2violates section 80G.07, subdivision 1, clause (2) or (3), is guilty of a misdemeanor.
9.3 Sec. 9. [80G.09] OTHER ACTION; LOCAL AUTHORITY.
9.4Nothing in this chapter precludes an action under chapter 80A or preempts local
9.5government authority under section 325F.742.
9.6 Sec. 10. [80G.10] INVESTIGATIONS AND CIVIL ENFORCEMENT.
9.7 Subdivision 1. Civil action instituted by commissioner. If the commissioner
9.8believes that a person has engaged, is engaging, or is about to engage in an act, practice,
9.9or course of business constituting a violation of this chapter or a rule adopted or order
9.10issued under this chapter or that a person has, is, or is about to engage in an act, practice,
9.11or course of business that materially aids a violation of this chapter or a rule adopted or
9.12order issued under this chapter, the commissioner may maintain an action in the district
9.13court to enjoin the act, practice, or course of business and to enforce compliance with this
9.14chapter or a rule adopted or order issued under this chapter.
9.15 Subd. 2. Relief available. In an action under this section and on a proper showing,
9.16the court may:
9.17(1) issue a permanent or temporary injunction, restraining order, or declaratory
9.18judgment;
9.19(2) order other appropriate or ancillary relief, which may include:
9.20(i) an asset freeze, accounting, writ of attachment, writ of general or specific
9.21execution, and appointment of a receiver or conservator, that may be the commissioner,
9.22for the defendant or the defendant's assets;
9.23(ii) ordering the commissioner to take charge and control of a defendant's property,
9.24including investment accounts and accounts in a depository institution, rents, and profits;
9.25to collect debts; and to acquire and dispose of property;
9.26(iii) imposing a civil penalty up to $10,000 for each violation; an order of rescission,
9.27restitution, or disgorgement directed to a person that has engaged in an act, practice, or
9.28course of business constituting a violation of this chapter or a rule adopted or order issued
9.29under this chapter or the predecessor act; and
9.30(iv) ordering the payment of prejudgment and postjudgment interest; or
9.31(3) order such other relief as the court considers appropriate.
9.32 Subd. 3. No bond required. The commissioner may not be required to post a bond
9.33in an action or proceeding under this chapter.
10.1 Subd. 4. Commissioner authority. (a) If the commissioner determines that a
10.2person has engaged, is engaged, or is about to engage in an act, practice, or course of
10.3conduct constituting a violation of this chapter or a rule adopted or order issued under this
10.4chapter or that a person has materially aided, is materially aiding, or is about to materially
10.5aid an act, practice or course of conduct constituting a violation of this chapter or rule
10.6adopted or order issued under this chapter the commissioner may:
10.7(1) issue an order directing the person to cease and desist from engaging in the
10.8act, practice or conduct or to take other action necessary or appropriate to comply with
10.9this chapter; or
10.10(2) issue an order denying, suspending, revoking or conditioning the registration of a
10.11bullion coin dealer or coin dealer representative.
10.12(b) Upon issuance of an order, the commissioner shall promptly serve each person
10.13subject to the order with a copy of the order and a notice that the order has been
10.14issued. The order must include a statement of the reasons for the order and whether the
10.15commissioner will seek a civil penalty or costs of the investigation, and notice that the
10.16person must, within 30 days of being served with the order, request in writing a hearing
10.17and that within 15 days after receipt of a written hearing request from the person, the
10.18matter will be scheduled for a hearing. If a person subject to the order does not request a
10.19hearing within 30 days after the date of service of the order, the order becomes final as to
10.20that person by operation of law. If a hearing is requested, the commissioner, after notice of
10.21an opportunity for hearing to each person subject to the order, may modify or vacate the
10.22order or extend it until final determination.
10.23(c) If a hearing is requested pursuant to paragraph (b), a hearing must be held under
10.24chapter 14 and a final order may not be issued unless the commissioner makes findings of
10.25fact and conclusions of law in a record according to chapter 14. The final order may make
10.26final, vacate, or modify the order issued under paragraph (a).
10.27(d) If a petition for judicial review of a final order is not filed in accordance with
10.28chapter 14, the commissioner may file a certified copy of the final order with the clerk of a
10.29court of competent jurisdiction. The order so filed has the same effect as a judgment of the
10.30court and may be recorded, enforced, or satisfied in the same manner as a judgment of
10.31the court.
10.32(e) If a person does not comply with an order under this section, the commissioner
10.33may petition a court of competent jurisdiction to enforce the order. The court may not
10.34require the commissioner to post a bond in an action or proceeding under this section.
10.35If the court finds, after service and opportunity for hearing, that the person was not in
10.36compliance with the order, the court may adjudge the person in civil contempt of the order.
11.1The court may impose a further civil penalty against the person for contempt in an amount
11.2up to $10,000 for each violation and may grant any other relief the court determines is just
11.3and proper in the circumstances.
11.4(f) In addition to the authority granted under this chapter, the commissioner has all
11.5the authority provided under section 45.027 to ensure compliance with this chapter.
11.6 Sec. 11. EFFECTIVE DATE.
11.7This act is effective August 1, 2013.
1.3prohibiting certain conduct; providing enforcement authority and criminal
1.4penalties; appropriating money;proposing coding for new law as Minnesota
1.5Statutes, chapter 80G.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. [80G.01] DEFINITIONS.
1.8 Subdivision 1. Scope. For purposes of this chapter, the following terms have the
1.9meanings given to them in this section.
1.10 Subd. 2. Bullion coin. "Bullion coin" means any coin containing more than one
1.11percent by weight of silver, gold, platinum, or other precious metal.
1.12 Subd. 3. Bullion coin dealer. (a) Subject to the exceptions in paragraph (b), a
1.13"bullion coin dealer" means any person who buys, sells, solicits, or markets bullion
1.14coins or investments in bullion coins to consumers and is either incorporated, registered,
1.15domiciled, or otherwise located in this state, or who does business with a consumer
1.16domiciled, residing, or otherwise located in this state.
1.17(b) A "bullion coin dealer" does not include any of the following persons:
1.18(1) a person who engages only in wholesale bullion coin transactions with bullion
1.19coin dealers who sell at retail and are properly registered under this chapter;
1.20(2) a person who engages only in transactions at occasional garage or yard sales
1.21held at the seller's residence, farm auctions held at the seller's residence, or estate sales
1.22held at the decedent's residence;
1.23(3) a person who is properly registered pursuant to chapter 80A, or the federal
1.24Securities Exchange Act of 1934 and rules promulgated thereunder as a securities broker
1.25dealer or broker dealer agent;
2.1(4) an auctioneer who auctions coins at auction on behalf of an owner, if the
2.2auctioneer does not take title or ownership of the coins;
2.3(5) a person who engages only in transactions at occasional trade shows where the
2.4consumer is present and the transaction is made at the trade show; or
2.5(6) a federally or state-chartered bank, bank and trust, savings bank, savings
2.6association, or credit union or any operating subsidiary of them.
2.7 Subd. 4. Coin dealer representative. "Coin dealer representative" means any
2.8natural person acting as an employee, contractor, or agent of a bullion coin dealer and
2.9who has interactions with consumers for the purpose of the buying, selling, solicitation, or
2.10marketing of bullion coins or investments in bullion coins.
2.11 Subd. 5. Commissioner. "Commissioner" means the commissioner of commerce.
2.12 Subd. 6. Owner. "Owner" means any person who has an ownership interest in a
2.13bullion coin dealer, regardless of whether directly or indirectly, of more than ten percent
2.14and who is actively engaged in the direction, management, oversight, or operation of the
2.15bullion coin dealer or its business affairs.
2.16 Subd. 7. Person. "Person" has the same meaning given in section 325F.68,
2.17subdivision 3.
2.18 Subd. 8. Precious metal content. "Precious metal content" means the quantity,
2.19measured in grams, of gold, silver, platinum, or other precious metal in a coin and the
2.20percentage that the precious metal constitutes of the total weight of the coin.
2.21 Sec. 2. [80G.02] REGISTRATION.
2.22 Subdivision 1. Registration required. Beginning July 1, 2014, it shall be unlawful
2.23for a bullion coin dealer or coin dealer representative to solicit, market, buy, sell, or deliver
2.24bullion coins or investments in bullion coins to a consumer without being registered by the
2.25commissioner as provided for in this chapter, if the bullion coin dealer has engaged in a
2.26bullion coin transaction or transactions with consumers during the 12-month period prior
2.27to July 1, 2014, that exceed $5,000 in the aggregate, as determined by the transactions'
2.28sale prices. If a bullion coin dealer was not required to be registered beginning on July 1,
2.292014, the bullion coin dealer must submit an application to register itself and each of its
2.30coin dealer representatives within 30 days of reaching $5,000 in the aggregate of bullion
2.31coin transactions with consumers in any 12-month period prior to July 1 of any calendar
2.32year, as determined by the transactions' sale prices. Once a bullion coin dealer is required
2.33to register itself and its coin dealer representatives, the coin dealer must thereafter renew
2.34its registration and the registration of each of its coin dealer representatives in accordance
2.35with this chapter, regardless of the aggregate amount of transactions, unless the person
3.1ceases to be a bullion coin dealer. A coin dealer representative may not buy, sell, solicit,
3.2or market bullion coins or investments in bullion coins on behalf of a bullion coin dealer
3.3unless the dealer is properly registered with the commissioner under this section.
3.4 Subd. 2. Registration obligations. Registrations issued or renewed by the
3.5commissioner under this chapter shall expire on June 30 and must be renewed.
3.6 Subd. 3. Registration application and renewal. The application and renewal
3.7forms shall include the following information, as applicable, which shall be considered by
3.8the commissioner in determining whether to issue a registration and whether to thereafter
3.9renew the registration:
3.10(1) the name, assumed names, doing business as names, including caller
3.11identification names, and business addresses of the bullion coin dealer, the name of
3.12each owner and officer, and the name and primary work location of each coin dealer
3.13representative. A bullion coin dealer who desires to carry on business in more than one
3.14location shall identify each address where business is conducted;
3.15(2) if a bullion coin dealer is doing business under any name other than the dealer's
3.16legal name, documentation that the assumed name has been properly filed with the
3.17secretary of state;
3.18(3) the telephone numbers, including cellular phone numbers, electronic mail
3.19addresses, and Web site domain names used or intended to be used by the bullion coin
3.20dealer and its coin dealer representatives to buy, sell, solicit, market, or deliver to
3.21consumers bullion coin or investments in bullion coin;
3.22(4) the disclosure of all criminal convictions by any court within the last ten years
3.23for the bullion coin dealer and each officer and owner of the bullion coin dealer and
3.24for each of its coin dealer representatives;
3.25(5) the disclosure of any civil judgments in favor of a government entity or
3.26government entity orders entered, filed, or issued against the bullion coin dealer, its
3.27officers and owners, or its coin dealer representatives within the last ten years for violation
3.28of consumer protection laws or unfair trade practice laws or for failure to account to a
3.29consumer for money or property received from the consumer;
3.30(6) the disclosure of any settlement or other agreement with any government entity
3.31within the last ten years resolving concerns that the bullion coin dealer, its officers and
3.32owners, or its coin dealer representatives violated consumer protection or unfair trade
3.33practice laws, or for failure to account to a consumer for money or property received
3.34from the consumer; and
3.35(7) the disclosure of any instance in which the bullion coin dealer, its officers and
3.36owners, and its coin dealer representatives were at any time permanently or temporarily
4.1prohibited by any court of competent jurisdiction or ordered to cease and desist as the
4.2result of a government agency action from engaging in buying, selling, soliciting, or
4.3marketing of bullion coin or investments in bullion coin. A bullion coin dealer may rely on
4.4the screening process provided for in section 80G.05 and the statements of its coin dealer
4.5representatives for the purposes of complying with the disclosure requirements of this
4.6clause relating to coin dealer representatives, provided that such reliance is reasonable, in
4.7good faith, and the bullion coin dealer has no knowledge of information suggesting that
4.8the screening results or statements are inaccurate.
4.9 Subd. 4. Notice of change in registration information. A bullion coin dealer must
4.10provide the commissioner written notice of a change in the dealer's name, assumed names,
4.11doing business as names, business addresses, including all business addresses at which it
4.12or its coin dealer representatives conduct business, owners, electronic mail addresses, Web
4.13site domain names, or telephone numbers used by it or its coin dealer representatives to
4.14buy, sell, solicit, or market to consumers bullion coin or investments in bullion coin no
4.15later than ten days after the change occurs.
4.16 Subd. 5. Registration fee; appropriation. (a) The fee for each registration under
4.17this chapter shall be as follows:
4.18(1) bullion coin dealers: $25; and
4.19(2) coin dealer representatives: $10.
4.20(b) The commissioner, based on the cost of processing registrations, may adjust the
4.21registration fee on an annual basis as needed.
4.22(c) The commissioner must deposit the fees collected under this subdivision in
4.23the state treasury and credit the fee to a separate account in the special revenue fund.
4.24The amount collected under this subdivision is annually appropriated to the agency to
4.25implement and enforce this chapter.
4.26 Sec. 3. [80G.03] REGISTRATION DENIAL, NONRENEWAL, REVOCATION
4.27AND SUSPENSION.
4.28 Subdivision 1. Authority. The commissioner may, by order, suspend, revoke, or
4.29refuse to issue or renew a bullion coin dealer or coin dealer representative registration for
4.30any one or more of the following causes:
4.31(1) providing incorrect, false, misleading, or incomplete information to the
4.32commissioner or refusing to allow a reasonable inspection of information and documents
4.33in the possession of the bullion coin dealer, coin dealer representative, or a third party or
4.34to allow a reasonable inspection of premises;
4.35(2) obtaining or attempting to obtain a registration through misrepresentation or fraud;
5.1(3) having a bullion coin dealer or coin dealer representative registration or its
5.2equivalent, including licensure under section 325F.73, denied, suspended, or revoked by
5.3any locality within the state or other state, province, district, or territory;
5.4(4) being permanently or temporarily enjoined by any court of competent jurisdiction
5.5or being ordered to cease and desist by a government agency from engaging in or
5.6continuing any conduct or practice involving the buying, selling, soliciting, or marketing
5.7of bullion coins, investments in bullion coins, or precious metal to consumers;
5.8(5) violating the provisions of this chapter or of sections 45.027; 325D.43 to
5.9325D.48; 325F.67; 325F.68 to 325F.69; 325F.694; and 325F.73 to 325F.744, or federal
5.10or state taxation or labor law; or
5.11(6) violating a subpoena or order of the commissioner or a court issued pursuant
5.12to this chapter or sections 45.027; 325D.43 to 325D.48; 325F.67; 325F.68 to 325F.69;
5.13325F.694; 325F.70; and 325F.73 to 325F.744.
5.14 Subd. 2. Bullion coin dealer responsibility for actions of coin dealer
5.15representatives. The commissioner may take action against a bullion coin dealer for
5.16any violations of this chapter by its coin dealer representatives conducting activities on
5.17behalf of or at the direction of the bullion coin dealer. The commissioner may also take
5.18action against the coin dealer representative.
5.19 Subd. 3. Other authority of the commissioner. If a registration lapses, is
5.20surrendered, withdrawn, terminated, or otherwise becomes ineffective, the commissioner
5.21may institute a proceeding under this subdivision within two years after the registration
5.22was last effective and enter a revocation order as of the last date on which the registration
5.23was in effect, and impose a civil penalty as provided for in section 45.027, subdivision 6.
5.24 Subd. 4. Effect of revocation. A revocation of a registration prohibits the bullion
5.25coin dealer or coin dealer representatives from making a new application for a registration
5.26for at least two years from the effective date of the revocation.
5.27 Sec. 4. [80G.04] CRIMINAL CONVICTIONS.
5.28 Subdivision 1. Bullion coin dealer registration precluded. The commissioner
5.29must deny an application for registration or renewal of a bullion coin dealer, or revoke such
5.30registration, if the bullion coin dealer or its owners or officers have within the last ten years
5.31been convicted in any court of any financial crime or other crime involving fraud or theft.
5.32 Subd. 2. Coin dealer representative registration precluded. The commissioner
5.33must deny an application for registration or renewal of a coin dealer representative, or
5.34revoke such registration, if the coin dealer representative has within the last ten years been
5.35convicted in any court of any financial crime or other crime involving fraud or theft.
6.1 Sec. 5. [80G.05] SCREENING.
6.2 Subdivision 1. Screening process required. Each bullion coin dealer must
6.3establish procedures to screen each of its owners and officers and each of its coin
6.4dealer representatives prior to submitting the application to the commissioner for initial
6.5registration and at each renewal. The results of such screenings shall be provided to the
6.6commissioner as part of the initial registration and all renewal registrations if requested by
6.7the commissioner.
6.8 Subd. 2. Initial screening. The screening process for initial registration must be
6.9done no more than 60 days before the submission of an application for registration. The
6.10process must include a national criminal history record search, a judgment search, and a
6.11county criminal history search for all counties where the owner, officer, or coin dealer
6.12representative has resided within the immediately preceding ten years. Each bullion
6.13coin dealer shall use a reputable, reliable, and accurate vendor authorized to do business
6.14in Minnesota to conduct the background screening process on its owners, officers, and
6.15coin dealer representatives.
6.16 Subd. 3. Renewal screening. The screening process for the renewal of a
6.17registration must include a national criminal history record search, a judgment search, and
6.18county criminal history search for all counties where the owner, officer, or coin dealer
6.19representative has resided since satisfactorily completing the last screening process
6.20conducted pursuant to this section. Screening for renewal of the owner, officer, and coin
6.21dealer representative registrations must take place no more than 60 days before the
6.22submission of an application for renewal of a registration.
6.23 Sec. 6. [80G.06] SURETY BOND.
6.24 Subdivision 1. Surety bond requirement. Every bullion coin dealer shall maintain a
6.25current, valid surety bond issued by a surety company admitted to do business in Minnesota
6.26in an amount based on the transactions (purchases from and sales to consumers at retail)
6.27during the 12-month period prior to registration, or renewal, whichever is applicable.
6.28The amount of the surety bond shall be as specified in the table below:
7.1 Subd. 2. Action on bond permitted. A consumer injured in money or property by a
7.2bullion coin dealer's or coin dealer representative's failure to provide bullion coins that
7.3the consumer has paid for or failure to remit money or goods owed to the consumer in
7.4connection with the consumer's sale of bullion coins may file a claim with the surety and
7.5if the claim is not paid, is authorized to bring an action based on the bond and recover
7.6against the surety. The commissioner or attorney general may also file a claim and bring
7.7an action on the bond and recover against the surety on behalf of a consumer so injured.
7.8 Sec. 7. [80G.07] PROHIBITED CONDUCT.
7.9 Subdivision 1. Sales practices. No bullion coin dealer or coin dealer representative
7.10shall:
7.11(1) prior to a transaction regarding bullion coins, or concurrent with the delivery
7.12thereof, fail to provide to the consumer in writing, in a clear and conspicuous manner,
7.13the sale or purchase price and the precious metal content of the bullion coins involved in
7.14the transaction. The written notice shall also include the bullion coin dealer's registration
7.15identification information issued by the commissioner, and the Department of Commerce's
7.16e-mail address and telephone number. A copy of the written notice shall be provided to
7.17the consumer and a copy retained by the bullion coin dealer;
7.18(2) fail to deliver bullion coins to a consumer within the time agreed upon with
7.19the consumer or, if no such agreement exists, within 30 days after the consumer has
7.20paid for the coins;
7.21(3) fail to pay a consumer for purchased bullion coins within the time agreed upon
7.22with the consumer or, if no such agreement exists, within 30 days after the consumer
7.23has provided the coins;
7.24(4) fail to provide a written invoice at the time of the transaction specifically
7.25identifying and describing the bullion coins involved in the transaction, the quantity of
7.26bullion coins involved in the transaction, and the bullion coins' sale or purchase price and
7.27precious metal content. The written invoice shall include the bullion coin dealer registration
7.28identification information issued by the commissioner, and the Department of Commerce's
7.29e-mail address and telephone number. A copy of the transaction documentation shall be
7.30provided to the consumer and a copy retained by the bullion coin dealer;
7.31(5) misrepresent the delivery date of bullion coins or payment for bullion coins, or
7.32the dealer or representative's professional qualifications, affiliations, or registration;
7.33(6) misrepresent any material aspect of a bullion coin, including its performance,
7.34efficacy, nature, investment value, central characteristics, liquidity, earnings potential,
7.35or profitability;
8.1(7) misrepresent the manner in which any bullion coins a consumer provides will be
8.2stored or otherwise handled once received;
8.3(8) renegotiate the terms of a sale or purchase after receiving a consumer's payment
8.4or bullion coins without first obtaining the consumer's agreement to renegotiate and
8.5offering the consumer the option to have the payment fully refunded or the entirety of
8.6the bullion coins returned;
8.7(9) fail to respond within three business days to a consumer inquiry about the
8.8delivery status of bullion coins that the consumer has paid for but not yet received or the
8.9status of a payment for bullion coins that the consumer has already provided;
8.10(10) telephone or solicit a consumer, or sell or provide the consumer's name to
8.11any other bullion coin dealer or coin dealer representative, after the consumer requests
8.12not to be contacted;
8.13(11) violate a subpoena or order of the commissioner or a court;
8.14(12) make any communication to a potential buyer or seller of bullion coins that
8.15misrepresents the relationship, if any, between the bullion coin dealer or coin dealer
8.16representative and any government agency or mint;
8.17(13) improperly withhold, misappropriate, or convert any money or properties
8.18received in the course of buying, selling, soliciting, or marketing bullion coins or
8.19investments in bullion coins to consumers;
8.20(14) misrepresent the terms of an actual or proposed purchase or sale of bullion coins
8.21or investment in bullion coins to a consumer; or
8.22(15) violate any other federal, state, or local law or rule related to selling, purchasing,
8.23soliciting, or marketing of bullion coin, investments in bullion coin, or precious metals, or
8.24any federal, state, or local law related to fraudulent, coercive, or dishonest practices, or
8.25federal, state, or local law related to taxation or labor standards.
8.26 Subd. 2. Application. From August 1, 2013, to June 30, 2014, section 80G.07 shall
8.27apply to any bullion coin dealer and its coin dealer representatives if the bullion coin
8.28dealer is engaged in a bullion coin transaction or transactions with consumers which
8.29exceed $5,000 in the aggregate, as determined by the transaction sale prices, during the
8.3012-month period prior to August 1, 2013. On or after July 1, 2014, section 80G.07 shall
8.31apply to any bullion coin dealer and its coin dealer representatives which is or should be
8.32registered in accordance with the provisions of this chapter.
8.33 Sec. 8. [80G.08] CRIMINAL VIOLATION.
8.34A person who conducts business as a bullion coin dealer or as a coin dealer
8.35representative without having first registered with the commissioner, or who carries on
9.1such business after the revocation, suspension, or expiration of a registration, or who
9.2violates section 80G.07, subdivision 1, clause (2) or (3), is guilty of a misdemeanor.
9.3 Sec. 9. [80G.09] OTHER ACTION; LOCAL AUTHORITY.
9.4Nothing in this chapter precludes an action under chapter 80A or preempts local
9.5government authority under section 325F.742.
9.6 Sec. 10. [80G.10] INVESTIGATIONS AND CIVIL ENFORCEMENT.
9.7 Subdivision 1. Civil action instituted by commissioner. If the commissioner
9.8believes that a person has engaged, is engaging, or is about to engage in an act, practice,
9.9or course of business constituting a violation of this chapter or a rule adopted or order
9.10issued under this chapter or that a person has, is, or is about to engage in an act, practice,
9.11or course of business that materially aids a violation of this chapter or a rule adopted or
9.12order issued under this chapter, the commissioner may maintain an action in the district
9.13court to enjoin the act, practice, or course of business and to enforce compliance with this
9.14chapter or a rule adopted or order issued under this chapter.
9.15 Subd. 2. Relief available. In an action under this section and on a proper showing,
9.16the court may:
9.17(1) issue a permanent or temporary injunction, restraining order, or declaratory
9.18judgment;
9.19(2) order other appropriate or ancillary relief, which may include:
9.20(i) an asset freeze, accounting, writ of attachment, writ of general or specific
9.21execution, and appointment of a receiver or conservator, that may be the commissioner,
9.22for the defendant or the defendant's assets;
9.23(ii) ordering the commissioner to take charge and control of a defendant's property,
9.24including investment accounts and accounts in a depository institution, rents, and profits;
9.25to collect debts; and to acquire and dispose of property;
9.26(iii) imposing a civil penalty up to $10,000 for each violation; an order of rescission,
9.27restitution, or disgorgement directed to a person that has engaged in an act, practice, or
9.28course of business constituting a violation of this chapter or a rule adopted or order issued
9.29under this chapter or the predecessor act; and
9.30(iv) ordering the payment of prejudgment and postjudgment interest; or
9.31(3) order such other relief as the court considers appropriate.
9.32 Subd. 3. No bond required. The commissioner may not be required to post a bond
9.33in an action or proceeding under this chapter.
10.1 Subd. 4. Commissioner authority. (a) If the commissioner determines that a
10.2person has engaged, is engaged, or is about to engage in an act, practice, or course of
10.3conduct constituting a violation of this chapter or a rule adopted or order issued under this
10.4chapter or that a person has materially aided, is materially aiding, or is about to materially
10.5aid an act, practice or course of conduct constituting a violation of this chapter or rule
10.6adopted or order issued under this chapter the commissioner may:
10.7(1) issue an order directing the person to cease and desist from engaging in the
10.8act, practice or conduct or to take other action necessary or appropriate to comply with
10.9this chapter; or
10.10(2) issue an order denying, suspending, revoking or conditioning the registration of a
10.11bullion coin dealer or coin dealer representative.
10.12(b) Upon issuance of an order, the commissioner shall promptly serve each person
10.13subject to the order with a copy of the order and a notice that the order has been
10.14issued. The order must include a statement of the reasons for the order and whether the
10.15commissioner will seek a civil penalty or costs of the investigation, and notice that the
10.16person must, within 30 days of being served with the order, request in writing a hearing
10.17and that within 15 days after receipt of a written hearing request from the person, the
10.18matter will be scheduled for a hearing. If a person subject to the order does not request a
10.19hearing within 30 days after the date of service of the order, the order becomes final as to
10.20that person by operation of law. If a hearing is requested, the commissioner, after notice of
10.21an opportunity for hearing to each person subject to the order, may modify or vacate the
10.22order or extend it until final determination.
10.23(c) If a hearing is requested pursuant to paragraph (b), a hearing must be held under
10.24chapter 14 and a final order may not be issued unless the commissioner makes findings of
10.25fact and conclusions of law in a record according to chapter 14. The final order may make
10.26final, vacate, or modify the order issued under paragraph (a).
10.27(d) If a petition for judicial review of a final order is not filed in accordance with
10.28chapter 14, the commissioner may file a certified copy of the final order with the clerk of a
10.29court of competent jurisdiction. The order so filed has the same effect as a judgment of the
10.30court and may be recorded, enforced, or satisfied in the same manner as a judgment of
10.31the court.
10.32(e) If a person does not comply with an order under this section, the commissioner
10.33may petition a court of competent jurisdiction to enforce the order. The court may not
10.34require the commissioner to post a bond in an action or proceeding under this section.
10.35If the court finds, after service and opportunity for hearing, that the person was not in
10.36compliance with the order, the court may adjudge the person in civil contempt of the order.
11.1The court may impose a further civil penalty against the person for contempt in an amount
11.2up to $10,000 for each violation and may grant any other relief the court determines is just
11.3and proper in the circumstances.
11.4(f) In addition to the authority granted under this chapter, the commissioner has all
11.5the authority provided under section 45.027 to ensure compliance with this chapter.
11.6 Sec. 11. EFFECTIVE DATE.
11.7This act is effective August 1, 2013.
