
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC687e]

 
                      TITLE 15--COMMERCE AND TRADE
 
             CHAPTER 14B--SMALL BUSINESS INVESTMENT PROGRAM
 
              SUBCHAPTER III--INVESTMENT DIVISION PROGRAMS
 
               Part A--Small Business Investment Companies
 
Sec. 687e. Removal and suspension of directors and officers of 
        licensees
        

(a) Written notice of intention to remove; grounds

    The Administration may serve upon any director or officer of a 
licensee a written notice of its intention to remove him from office 
whenever, in the opinion of the Administration, such director or 
officer--
        (1) has willfully and knowingly committed any substantial 
    violation of--
            (A) this chapter,
            (B) any regulation issued under this chapter, or
            (C) a cease-and-desist order which has become final, or

        (2) has willfully and knowingly committed or engaged in any act, 
    omission, or practice which constitutes a substantial breach of his 
    fiduciary duty as such director or officer,

and that such violation or such breach of fiduciary duty is one 
involving personal dishonesty on the part of such director or officer.

(b) Suspension pending completion of administrative proceedings

    In respect to any director or officer referred to in subsection (a) 
of this section, the Administration may, if it deems it necessary for 
the protection of the licensee or the interests of the Administration, 
by written notice to such effect served upon such director or officer, 
suspend him from office and/or prohibit him from further participation 
in any manner in the conduct of the affairs of the licensee. Such 
suspension and/or prohibition shall become effective upon service of 
such notice and, unless stayed by a court in proceedings authorized by 
subsection (d) of this section, shall remain in effect pending the 
completion of the administrative proceedings pursuant to the notice 
served under subsection (a) of this section and until such time as the 
Administration shall dismiss the charges specified in such notice, or, 
if an order of removal and/or prohibition is issued against the director 
or officer, until the effective date of any such order. Copies of any 
such notice shall also be served upon the interested licensee.

(c) Hearing; order of removal

    A notice of intention to remove a director or officer, as provided 
in subsection (a) of this section, shall contain a statement of the 
facts constituting grounds therefor, and shall fix a time and place at 
which a hearing will be held thereon. Such hearing shall be fixed for a 
date not earlier than thirty days nor later than sixty days after the 
date of service of such notice, unless an earlier or a later date is set 
by the Administration at the request of (1) such director or officer and 
for good cause shown, or (2) the Attorney General of the United States. 
Unless such director or officer shall appear at the hearing in person or 
by a duly authorized representative, he shall be deemed to have 
consented to the issuance of an order of such removal. In the event of 
such consent, or if upon the record made at any such hearing the 
Administration shall find that any of the grounds specified in such 
notice has been established, the Administration may issue such orders of 
removal from office as it deems appropriate. Any such order shall become 
effective at the expiration of thirty days after service upon such 
licensee and the director or officer concerned (except in the case of an 
order issued upon consent, which shall become effective at the time 
specified therein). Such order shall remain effective and enforcible 
except to such extent as it is stayed, modified, terminated, or set 
aside by action of the Administration or a reviewing court.

(d) Stay by United States district court of suspension or prohibition

    Within ten days after any director or officer has been suspended 
from office and/or prohibited from participation in the conduct of the 
affairs of a licensee under subsection (b) of this section, such 
director or officer may apply to the United States district court for 
the judicial district in which the home office of the licensee is 
located, or the United States District Court for the District of 
Columbia, for a stay of such suspension and/or prohibition pending the 
completion of the administrative proceedings pursuant to the notice 
served upon such director or officer under subsection (a) of this 
section, and such court shall have jurisdiction to stay such suspension 
and/or prohibition.

(e) Suspension of directors and officers charged with felonies involving 
        dishonesty or breach of trust; notice; duration of suspension; 
        removal

    Whenever any director or officer of a licensee is charged in any 
information, indictment, or complaint authorized by a United States 
attorney, with the commission of or participation in a felony involving 
dishonesty or breach of trust, the Administration may, by written notice 
served upon such director or officer, suspend him from office and/or 
prohibit him from further participation in any manner in the conduct of 
the affairs of the licensee. A copy of such notice shall also be served 
upon the licensee. Such suspension and/or prohibition shall remain in 
effect until such information, indictment, or complaint is finally 
disposed of or until terminated by the Administration. In the event that 
a judgment of conviction with respect to such offense is entered against 
such director or officer, and at such time as such judgment is not 
subject to further appellate review, the Administration may issue and 
serve upon such director or officer an order removing him from office. A 
copy of such order shall be served upon such licensee, whereupon such 
director or officer shall cease to be a director or officer of such 
licensee. A finding of not guilty or other disposition of the charge 
shall not preclude the Administration from thereafter instituting 
proceedings to suspend or remove such director or officer from office 
and/or to prohibit him from further participation in licensee affairs, 
pursuant to subsection (a) or (b) of this section.

(f) Hearings; procedure; form and requisites of decision; review; stay 
        of orders

    (1) Any hearing provided for in this section shall be held in the 
Federal judicial district or in the territory in which the principal 
office of the licensee is located unless the party afforded the hearing 
consents to another place, and shall be conducted in accordance with the 
provisions of chapter 5 of title 5. After such hearing, and within 
ninety days after the Administration has notified the parties that the 
case has been submitted to it for final decision, the Administration 
shall render its decision (which shall include findings of fact upon 
which its decision is predicated) and shall issue and cause to be served 
upon each party to the proceeding an order or orders consistent with the 
provisions of this section. Judicial review of any such order shall be 
exclusively as provided in this subsection. Unless a petition for review 
is timely filed in a court of appeals of the United States, as 
hereinafter provided in paragraph (2) of this subsection, and thereafter 
until the record in the proceeding has been filed as so provided, the 
Administration may at any time, upon such notice and in such manner as 
it shall deem proper, modify, terminate, or set aside any such order. 
Upon such filing of the record, the Administration may modify, 
terminate, or set aside any such order with permission of the court.
    (2) Any party to such proceeding may obtain a review of any order 
served pursuant to paragraph (1) of this subsection (other than an order 
issued with the consent of the director or officer concerned, or an 
order issued under subsection (e) of this section), by filing in the 
court of appeals of the United States for the circuit in which the 
principal office of the licensee is located, or in the United States 
Court of Appeals for the District of Columbia Circuit, within thirty 
days after the date of service of such order, a written petition praying 
that the order of the Administration be modified, terminated, or set 
aside. A copy of such petition shall be forthwith transmitted by the 
clerk of the court to the Administration, and thereupon the 
Administration shall file in the court the record in the proceeding, as 
provided in section 2112 of title 28. Upon the filing of such petition, 
such court shall have jurisdiction, which upon the filing of the record 
shall, except as provided in the last sentence of said paragraph (1), be 
exclusive, to affirm, modify, terminate, or set aside, in whole or in 
part, the order of the Administration. Review of such proceedings shall 
be had as provided in chapter 7 of title 5. The judgment and decree of 
the court shall be final, except that the same shall be subject to 
review by the Supreme Court upon certiorari as provided in section 1254 
of title 28.
    (3) The commencement of proceedings for judicial review under 
paragraph (2) of this subsection shall not, unless specifically ordered 
by the court, operate as a stay of any order issued by the 
Administration.

(Pub. L. 85-699, title III, Sec. 313, as added Pub. L. 89-779, Sec. 7, 
Nov. 6, 1966, 80 Stat. 1360.)

                       References in Text

    For definition of ``this chapter'', referred to in subsec. 
(a)(1)(A), (B), see References in Text note set out under section 661 of 
this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 687h, 689o of this title.
