§ 2410. Powers of the Commissioner
(a) In addition to other powers conferred by this chapter, the Commissioner may:
(1) Restrict the transaction of any trust account when the Commissioner finds that extraordinary
circumstances make the restriction necessary for the proper protection of the trust
customers of the independent trust company.
(2) Order the holders of shares or other voting interest in an independent trust company
to refrain from voting those shares or other voting interest on any matter if the
Commissioner finds that the order is necessary to protect the company against reckless,
incompetent, or careless management, safeguard the assets of trust customers, or prevent
the wilful violation of this chapter or of any lawful order issued under it, and in
such a case, the shares or other voting interest of such a holder shall not be counted
in determining the existence of a quorum or a percentage of the outstanding shares
or voting interest necessary to take any company action.
(3) Order any person to cease violating this title or a lawful regulation issued under
it or to cease engaging in any unsound trust or fiduciary practice.
(4)(A) Impose a penalty of not more than $15,000.00 for each violation upon any independent
trust company which, or any director, member, trustee, officer, manager, or employee
of an independent trust company who:
(i) knowingly violates this title or a lawful regulation or order issued under it;
(ii) has knowingly engaged or participated in any materially unsafe or unsound practice
in connection with the independent trust company; or
(iii) has knowingly committed or engaged in any act, omission, or practice which constitutes
a breach of fiduciary duty to the independent trust company.
(B) In determining the amount of a penalty assessed pursuant to this subsection (a), the
Commissioner shall consider the following factors:
(i) the appropriateness of the penalty with respect to the financial resources and good
faith of the person or independent trust company charged;
(ii) the gravity of the violation or practice;
(iii) the history of previous violations or practices of a similar nature;
(iv) the economic benefit derived by the person from the violation or practice; and
(v) other factors as justice may require.
(C) An independent trust company shall not indemnify a director, member, officer, manager,
or employee for a penalty imposed under this subsection.
(5) Suspend or revoke the certificate of authority of an independent trust company if,
after notice and opportunity for a hearing, the Commissioner determines that:
(A) the independent trust company has failed or refused to comply with any law or regulation
or an order issued pursuant to this title;
(B) the application for certificate of authority contained a false representation or omission
of a material fact; or
(C) any officer or manager or agent of the independent trust company, in connection with
an application for a certificate of authority, knowingly made a false representation
of a material fact or failed to disclose a material fact to the Commissioner or the
duly authorized agent of the Commissioner.
(6)(A) Remove a director, member, trustee, officer, manager, or employee of an independent
trust company who:
(i) knowingly violates this title or a lawful regulation or an order issued under this
title;
(ii) is convicted of a crime involving dishonesty;
(iii) has knowingly engaged or participated in any materially unsafe or unsound practice
in connection with the independent trust company; or
(iv) has knowingly committed or engaged in any act, omission, or practice which constitutes
a breach of fiduciary duty to the independent trust company.
(B) Provided further, with respect to the acts or omissions under subdivisions (A)(iii)
and (iv) of this subdivision (6) that the Commissioner finds:
(i) the independent trust company has suffered or probably will suffer substantial financial
loss or other damage;
(ii) the interest of its trust customers or accounts could be seriously prejudiced by such
violation, practice, or breach of fiduciary duty; or
(iii) the director, member, trustee, officer, manager, or employee has received material
financial gain by reason of such violation, practice, or breach.
(b) The Commissioner shall provide notice of any order proposed pursuant to this chapter
and the grounds thereof by mail to the independent trust company and any affected
director, member, trustee, officer, manager, or employee. The independent trust company
or any person so served may, within 30 days of service on the independent trust company,
request that a hearing be held by the Commissioner. The provisions of 3 V.S.A. chapter 25 shall govern any hearing held by the Commissioner under this chapter. The hearing
shall be private unless the Commissioner determines that a public hearing is necessary
to protect the public interest. If no hearing is requested, the proposed order shall
become final 30 days after service on the independent trust company. If it is deemed
necessary to ensure the continued safety and soundness of the independent trust company,
the Commissioner may order an immediate suspension of the certificate of authority
of the independent trust company or, in the case of a removal, immediate suspension
of the director, member, trustee, officer, manager, or employee pending completion
of further administrative proceedings on removal pursuant to subdivision (a)(6) of
this section.
(c) It shall be a criminal offense, punishable by a fine of $1,000.00 or a year in prison,
or both, for any person to violate this title, to violate any order of the Commissioner,
or, after receipt of a removal order, or an order assessing a penalty, to perform
any duty or exercise any power of any independent trust company until the penalty
has been satisfied, or otherwise satisfactorily resolved between the parties, or the
removal or penalty order is vacated by the Commissioner or by a court of competent
jurisdiction. (Added 1997, No. 98 (Adj. Sess.), § 8b.)