7.__Procedural requirements.__An order issued may not be issued under this section, except under subsection 6, without:

A.__Appropriate notice to the applicant or licensee;

B.__Opportunity for hearing; and

C.__Findings of fact and conclusions of law in a record in accordance with Title 5, chapter 375.

8.__Control person liability.__A person that controls, directly or indirectly, a person not in compliance with this section may be disciplined by order of the administrator under subsections 1 to 3 to the same extent as the noncomplying person, unless the controlling person did not know, and in the exercise of reasonable care could not have known, of the existence of conduct that is a ground for discipline under this section.

9.__Limit on investigation or proceeding.__The administrator may not institute a proceeding under subsection 1, 2 or 3 based solely on material facts actually known by the administrator unless an investigation or the proceeding is instituted within one year after the administrator actually acquires knowledge of the material facts.

SUBCHAPTER 5

FRAUD AND LIABILITIES

§16501.__General fraud

It is unlawful for a person, in connection with the offer, sale or purchase of a security, directly or indirectly:

1.__Device, scheme, artifice.__To employ a device, scheme or artifice to defraud;

2.__Untrue statement of or omission of material fact.__To make an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or