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State v. Kirby3/21/2003
Two cases on appeal present for us the issue whether administrative imposition of the civil penalty contained in the New Mexico Securities Act bars, under New Mexico Double Jeopardy jurisprudence, a criminal prosecution under that Act for the same conduct on which the civil penalty was imposed. We have consolidated State v. Kirby, Docket No. 22,967, and State v. Collins, Docket No. 23,020, for purposes of disposition of these cases on appeal.
Each Defendant was indicted on criminal securities violations based on the same conduct for which administrative penalties were imposed. In each case, the district court dismissed criminal charges for securities violations on the ground that each Defendant had been unconstitutionally put in jeopardy by an order issued by the Securities Division of the New Mexico Regulation and Licensing Department (the Division). Based on a Securities Division hearing officer's findings and conclusions, the acting director of the Division entered administrative orders that, among other things, imposed a monetary penalty on each Defendant. The State appeals in both cases.
The appeals require this Court to analyze the extent, if any, to which the double jeopardy analysis and holding in State v. Nunez, 2000-NMSC-013, 129 N.M. 63, 2 P.3d 264, should be applied to preclude imposition of both civil and criminal penalties under the New Mexico Securities Act of 1986, NMSA 1978, §§ 58-13B-1 to -57 (1986, as amended through 1999) [hereinafter Securities Act or the Act], for the same conduct. We analyze Nunez together with two other New Mexico Supreme Court cases bearing on the issue before us: State ex rel. Schwartz v. Kennedy, 120 N.M. 619, 904 P.2d 1044 (1995), decided before Nunez; and City of Albuquerque v. One (1) 1984 White Chevy, 2002-NMSC-014, 132 N.M. 187, 46 P.3d 94 [hereinafter White Chevy], decided after Nunez. We decline to extend Nunez to the circumstances in these cases, and therefore reverse the dismissals in both Kirby and Collins.
KIRBY BACKGROUND AND DISPOSITION
Some of the facts underlying the administrative order are virtually the same as those underlying the counts of the Kirby indictment. No issue exists on that point. In New Mexico, in 1998 Defendant engaged in transactions that became the subject matter of a Securities Division investigation and administrative proceeding. The administrative proceeding involved several transactions in which Defendant attempted, through misrepresentations, to sell securities without being a registered broker and without registering the securities, and supplied placement materials and disclosure statements to potential buyers that contained misrepresentations.
The administrative order imposed a civil penalty of $75,000. How the hearing officer and acting director arrived at this amount is unclear. It may, but does not necessarily, reflect a finding that Defendant engaged in fifteen separate violations of the Securities Act, in that the maximum civil penalty allowed under the Act is $5,000 for each violation. See § 58-13B-37(B)(4) (authorizing an order "imposing a civil penalty up to a maximum of five thousand dollars ($5,000) for each violation"). The administrative order also required Defendant to pay $1,000 "for costs of investigation." See § 58-13B-44(B).
In addition to the penalty imposed, the administrative order, dated July 25, 2000, required Defendant to "cease and desist from offering to sell or selling securities of any kind in New Mexico without first complying with all provisions of the [Securities Act]," and "permanently barred [Defendant] from associat with any licensed broker-dealer or investment advisor in this State." See § 58-13B-37(B
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