O'Neal

Those who violate the Corporate Securities Law of 1968 (Corp. Code, § 25000 et seq.) may be exposed to criminal sanctions, civil suits, and administrative enforcement actions brought by the Commissioner of Corporations (Commissioner). In this case, the Commissioner brought an administrative action against defendant Anthony O’Neal for (1) the offer and sale of unqualified, nonexempt securities; and (2) fraud in the offer and sale of securities. Defendant and Otha Cole had created a business in which they convinced several individuals to invest by means of poorly drafted principal investment agreements (PIA’s), which were signed by the individuals and Cole, but not defendant. Defendant and Cole misused investors’ funds and the business failed.

After a bench trial, the trial court concluded defendant had violated both pleaded provisions of the securities law, enjoined defendant from further violations, and ordered him to pay restitution and civil penalties. In the published portion of this opinion, we consider, and reject, defendant’s argument that he cannot be held liable in an administrative enforcement action and be required to pay restitution to his victims unless he…