17331.2
. (a) Fidelity Corporation shall deny the application for a
certificate or revoke the certificate of any person, upon any of the
following grounds:
(1) The application contains a material misrepresentation of fact
or fails to disclose a material fact so as to render the application
false or misleading, or if any fact or condition exists which, if it
had existed at the time of the original application for a
certificate, reasonably would have warranted Fidelity Corporation to
refuse originally to issue that certificate.
(2) That the person has been convicted of a crime or offense,
whether a felony, an offense punishable as a felony, or a
misdemeanor, that involved dishonesty, fraud, deceit, embezzlement,
fraudulent conversion, misappropriation of property, or any other
crime reasonably related to the qualifications, functions, or duties
of a person engaged in business in accordance with this division. A
conviction within the meaning of this section is a plea or verdict of
guilty or a conviction following a plea of nolo contendere. A
conviction also includes an order granting probation and suspending
the imposition of sentence, notwithstanding a subsequent order
pursuant to Section 1203.4 or 1203.4a of the Penal Code permitting
the person to withdraw his or her plea of guilty and to enter a plea
of not guilty, or setting aside the verdict of guilty, or dismissing
the accusation, information, or indictment. If, however, the
conviction is more than 10 years old, or the conviction has been
expunged, or the person has obtained a certificate of rehabilitation
or relief under Section 1203.4 or 1203.4a of the Penal Code, or if
the conviction was an infraction, then the person may have a Fidelity
Corporation certificate upon showing by clear and convincing proof
to a reasonable certainty that the conviction is no longer reasonably
related to the qualifications, functions, or duties of a person
engaged in business in accordance with this division or that person's
employment with a member.
(3) That the person has been held liable in a civil action by
final judgment of any court if the judgment involved dishonesty,
fraud, deceit, embezzlement, fraudulent conversion, or
misappropriation of property or the person has been ordered to make
restitution to a victim in any criminal case involving a crime or
offense set forth in paragraph (2). The person may have a Fidelity
Corporation certificate upon showing by clear and convincing proof to
a reasonable certainty that the judgment or restitution order is no
longer reasonably related to the qualifications, functions, or duties
of a person engaged in business in accordance with this division or
that person's employment with a member.
(4) That the person has (A) committed or caused to be committed an
act which caused any member to suffer a loss; (B) committed or
caused to be committed or colluded with any other person committing
any act which caused a loss, for which Fidelity Corporation or the
insurer on any insurance policy or fidelity bond purchased by
Fidelity Corporation, or both, to become liable to indemnify any
member; or (C) committed or caused to be committed an act of
dishonesty, fraud, deceit, embezzlement, fraudulent conversion, or
misappropriation of property, to the material damage of a member or
for which the member has been held liable to any third party, by
final judgment.
(5) That the person has been barred from employment by final order
of the commissioner pursuant to Section 17423.
(6) That the person has been deemed not qualified to serve in any
capacity as a director or officer or in any other position involving
management duties with a financial institution, pursuant to Division
1.8 (commencing with Section 4990).
(7) That the person has been denied coverage or reinstatement by
any insurer under any fidelity bond or crime policy, unless a
decision of reinstatement of coverage has been made after that
denial. A person who obtained a decision of reinstatement of coverage
prior to the effective date of this section may have a Fidelity
Corporation certificate notwithstanding paragraphs (2) and (3),
unless any other ground for denial or revocation applies to that
person.
(b) Fidelity Corporation shall suspend the certificate of any
person upon either of the following grounds:
(1) That the person has been censured or suspended from any
position of employment by final order of the commissioner. The
certificate suspension shall be for a term concurrent with the final
order of the commissioner.
(2) That the person has been barred from any position of
employment or management or control of any escrow agent, for a term
of less than permanent, by final order of the commissioner. The
certificate suspension shall be for a term concurrent with the final
order of the commissioner.
(c) Fidelity Corporation may suspend the certificate of any person
under either of the following grounds:
(1) That there is an action commenced by the commissioner to
either suspend or bar that person, under Section 17423.
(2) That any member with whom the person was employed has given a
proof of loss or a notice of an occurrence which may give rise to a
claim for a loss of trust obligations either of which identifies the
person as the person responsible for the loss or as a person acting
in collusion with the person causing the loss.
(d) Upon denial of an application for, or upon suspension or
revocation of the certificate of any person, Fidelity Corporation
shall provide written notice to the member with whom that person is
employed of the decision, pending any appeal therefrom which might be
made. Thereafter, the member shall not allow that person to have
access to money or negotiable instruments or securities belonging to
or in the possession of the escrow agent, or to draw checks upon the
escrow agent or the trust accounts of the escrow agent, but that
person may otherwise continue in the performance and discharge of
other duties of an employee. Fidelity Corporation shall notify the
person in writing of the decision to deny, suspend, or revoke the
certificate and of the person's right of appeal, together with the
notice of appeal. The grounds and basis for the decision shall be
stated in the notice thereof. All notices may be served either
personally or by mail, properly addressed to the address of record
for the member and the person.
(e) Any person whose application for a certificate has been
denied, or whose certificate has been suspended or revoked, may
appeal the decision, as provided in Section 17331.3. While that
appeal is pending, the person may not have access to money or
negotiable instruments or securities belonging to or in the
possession of the escrow agent, or to draw checks upon the escrow
agent or the trust accounts of the escrow agent, but that person may
otherwise continue in the performance and discharge of other duties
of an employee pending final decision of that person's appeal.
Failure to remove the person whose application has been denied, or
whose certificate has been suspended or revoked, as a signer on the
trust accounts may be subject to action by the commissioner as
provided for in this division and shall be subject to penalties as
set forth in Section 17331.1.
(f) Upon expiration of the time for an appeal, or upon conclusion
of the appeal, the decision to deny an application for or to suspend
or revoke the certificate of any person shall become final. Fidelity
Corporation shall give written notice to the member and to the person
of the final decision within 10 days. Thereafter, Fidelity
Corporation shall disclose in writing to all members the identity of
persons whose application has been denied or whose certificate has
been revoked. The person whose certificate has been denied or revoked
may file a certificate reapplication after the period of time
specified in Section 11522 of the Government Code, dating from the
Fidelity Corporation final decision, provided that the person has
satisfied all obligations to Fidelity Corporation under any prior
arbitration award or judgment.