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violated the Act or the rules and regulations may be afforded an opportunity to comply voluntarily with the Act and the rules and regulations.

(b) The Secretary or his designee may make inquiries and investigations to determine whether any person has violated or is about to violate any provision of the Act or the rules and regulations, or to aid in the enforcement of the Act, or in prescribing rules and regulations thereunder or in securing information to serve as a basis for recommending further legislation. The Secretary or his designee shall have the authority to administer oaths and affirmations in any matter under investigation.

Violations, investigations or

§ 1720.55 inquiries.

In connection with a formal investigation or inquiry involving an alleged or suspected violation or threatened violation of the Act or rules and regulations, the Secretary may require or permit any person to file with him a signed statement setting forth facts and circumstances known to such person and relevant to the investigation or inquiry. The Secretary may publish or otherwise divulge information concerning any violation of the Act or the rules and regulations.

§ 1720.70 Subpoenas in investigations.

(a) The Secretary or his designee may issue subpoenas relating to any matter under investigation for any or all of the following purposes:

(1) Requiring testimony to be taken by interrogatories.

(2) Requiring the attendance and testimony of witnesses at a specfic time and place.

(3) Requiring access to, examination of and the right to copy documents, books, records, and papers.

(4) Requiring the production of documents, books, records, and papers at a specified time and place.

(b) A motion to limit or quash any such subpoena may be filed with the Secretary or his designee within 10 days after service of the subpoena, and in no event less than 72 hours prior to the return date and hour of such subpoena. § 1720.75 Investigational proceedings.

(a) For the purpose of hearing the testimony of witnesses and receiving documents and other data relating to

any subject under investigation, investigational proceedings, as distinguished from adjudicative hearings, may be conducted in the course of any investigation including rule making proceedings under Subpart A of this part.

(b) Investigational proceedings shall be presided over by the Secretary or his designee and shall be stenographically or mechanically reported. A transcript shall be a part of the record of the investigation.

(c) Unless the Secretary or his designee determines otherwise investigational proceedings shall be public.

§ 1720.80 Rights of witnesses in investigations.

(a) Any person compelled to testify or to submit data in connection with any investigational proceedings shall be entitled to retain a copy or, on payment of lawfully prescribed costs, procure a copy of any data submitted by him and of his own testimony as stenographically or mechanically reported, except that in a nonpublic proceeding the witness may for good cause be limited to inspection of the official transcript of his testimony.

(b) Any witness compelled to appear in person in an investigational proceeding may be accompanied, represented, and advised by counsel as follows:

(1) Counsel for a witness may advise his client, in confidence, and upon initiative of either himself or the witness, with respect to any question asked of his client; and if the witness refuses to answer a question, then counsel may briefly state on the record if he has advised his client not to answer the question and the legal grounds for such refusal.

(2) Where it is claimed that the testimony or other evidence sought from a witness is outside the scope of the investigation, or it is claimed that the witness is privileged to refuse to answer a question or to produce other evidence, counsel for the witness may object on the record to the question or requirement and may state briefly and precisely the grounds thereof.

(3) Objections interposed under the rules in this subpart will be continuing objections throughout the course of the proceeding, and repetitious or cumulative statement of an objection or of the grounds therefore, in such cases, is unnecessary and impermissible.

(4) Counsel for a witness may not, for any purpose or to any extent not allowed by subparagraphs (1) and (2) of this paragraph, interrupt the examination of the witness by making any objections or statements on the record. Motions challenging the authority of the Secretary to conduct the investigation or the sufficiency or legality of the subpoena must have been addressed to the Secretary in advance of the proceeding. Copies of such motions may be filed with the presiding official at the proceeding as part of the record of the investigation, but no argument in support thereof will be allowed at the proceeding.

(5) Upon completion of the examination of a witness, counsel for the witness may request that on the record the presiding official permit the witness to clarify any of his answers in order that specified points of ambiguity, equivocation, or incompleteness may be corrected. The granting or denial of such request, in whole or in part, shall be within the sole discretion of the presiding official.

(6) The presiding official shall take all necessary action to regulate the course of the proceeding to avoid delay and to prevent or restrain disorderly, dilatory, obstructionist or contumacious conduct or contemptuous language. Such official shall, for reasons stated on the record, immediately report to the Secretary any instances where an attorney or witness has failed or refused to comply with his directions, lawful rules, regulations or orders in the course of the proceedings or has engaged in disorderly, dilatory, obstructionist, or contumacious conduct or contemptuous language. The Secretary or his designee may exclude the attorney or witness from further participation in the particular investigation. § 1720.85 Noncompliance.

Failure to comply with the Secretary's investigational process may result in action pursuant to section 1415 of the Act. § 1720.90 Disposition.

(a) When investigation by the Secretary indicates that corrective action is warranted, the Secretary pursuant to § 1710.45 (b) (2) of this chapter may issue a suspension order: Provided, however, That any person being investigated may be afforded an opportunity to submit to the Secretary a proposal for disposition of the matter in the form of an executed settlement agreement complying with

the requirements of § 1720.100 for consideration by the Secretary.

(b) When an investigation discloses that corrective action is not necessary or warranted in the public interest for the protection of purchasers or lessees, the investigational file will be closed. The matter may at any time thereafter be reinvestigated if circumstances so warrant. § 1720.100 Settlements.

(a) Offer of settlement.-At any time during a proceeding, parties may be afforded an opportunity to submit to the Secretary or his designee a written proposal for disposition of the matter in the form of a settlement offer.

(b) Settlement agreements.-When the Secretary or his designee determines the public interest will be fully safeguarded thereby he may accept an executed offer of settlement. Where the. Secretary or his designee rejects an offer of settlement, the party making the offer shall be notified and the offer of settlement shall be deemed withdrawn and such offer and any documents relating thereto shall not constitute a part of the record.

Subpart D-Proceedings and Hearings § 1720.110 Scope of rules in this sub

part.

The rules in this subpart are applicable to adjudicative proceedings which involve a hearing or opportunity for a hearing under the Interstate Land Sales Full Disclosure Act.

§ 1720.115 Applicability of sections of this subpart.

Succeeding sections of this subpart not specifically limited in applicability either to hearings conducted subsequent to a suspension notice under § 1710.45 (a) of this chapter, to a notice of proceedings under § 1710.45 (b) (1) of this chapter, or to hearings conducted subsequent to a suspension order issued pursuant to paragraph (2) of § 1710.45(b) of this chapter, shall apply to all such hearings. § 1720.120 Suspension notice under § 1710.45 (a) of this chapter.

A suspension pursuant to § 1710.45 (a) of this chapter shall be effected by service of a suspension notice which shall contain:

(a) An identification of the filing to which the notice applies.

(b) A specification of the deficiencies. of form, disclosure, accuracy, documen

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tation or fee tender which constitute the grounds, under § 1710.45 (a) of this chapter, of the suspension, and of the additional or corrective procedure, information, documentation, or tender which will satisfy the Secretary's requirements.

(c) A notice of the hearing rights of the developer under § 1720.155, and of the procedures for invoking those rights. (d) A notice that, unless otherwise ordered, the suspension shall remain in effect until 30 days after the developer cures the specified deficiencies as required by the notice.

§ 1720.125 Notice of proceedings pursuant to § 1710.45(b)(1) of this chapter.

A proceeding pursuant to § 1710.45 (b) (1) of this chapter is commenced by issuance and service of a notice which shall contain:

(a) A clear and accurate identification of the filing or filings to which the notice relates.

(b) A clear and concise statement of material facts, sufficient to inform the respondent with reasonable definiteness of the statements, omissions, conduct, circumstances or practices alleged to constitute the grounds for the proposed suspension order under § 1710.45 (b) (1) of this chapter.

(c) Specification of a time and place at which the developer shall have opportunity for hearing.

(d) Designation of the administrative law judge appointed to preside over prehearing procedures and over the hearings.

(e) A notice that failure to file an answer or motion as provided under § 1720.140 will result in an order suspending the Statement of Record. § 1720.130 Suspension order under § 1710.45 (b) (2) of this chapter.

A suspension pursuant to § 1710.45 (b) (2) of this chapter shall be effected by service of a suspension order which shall contain:

(a) An identification of the filing to which the order applies.

(b) Bases for issuance of order. (c) A notice of the hearing rights of the developer under § 1720.165 and of the procedures for invoking those rights.

(d) A statement that the order shall remain in effect until the developer has complied with the Secretary's requirements.

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A suspension pursuant to subparagraph (3) of § 1710.45(b) of this chapter shall be effected by service of a suspension order which shall contain:

(a) An identification of the filling to which the order applies;

(b) An identification of the amendment to the filing;

(c) A statement that the issuance of the order is necessary or appropriate in the public interest or for the protection of purchasers; and

(d) A statement that the order shall remain in effect until the amendment becomes effective.

§ 1720.134 Presumption of hearing request.

When an answer or motion to a notice of proceedings is timely filed, but a respondent has failed specifically to request a hearing, his filing shall be deemed to constitute such a request.

§ 1720.135 Motion for more definite

statement.

Where a reasonable showing is made by a respondent of his inability to respond to the allegations in a suspension notice or a notice of proceedings, motion may be made requesting a more definite statement of the allegations before filing an answer. Such motion shall be filed with the Secretary or his designee within 5 days after service of the notice and shall specifically indicate in what manner the notice is indefinite or defective. § 1720.140 Time for filing answer to notice of proceedings.

(a) Within 15 days after service of the notice of proceedings, the respondent shall file with the Secretary or his designee an answer and three copies thereof signed by the respondent or his attorney. Unless a different time is fixed by the Secretary or his designee, the filing of a motion for a more definite statement of the allegations shall alter the period of time in which to file an answer as follows:

(1) If the motion is denied, the answer shall be filed within 15 days after service of the denial.

(2) If the motion is granted, in whole or in part, the more definite statement of allegations shall be filed after service of the order granting the motion and the

answer shall be filed within 15 days after service of the more definite statement of allegations.

(b) If a notice of proceedings is amended, the respondent shall have 15 days after service of the amended notice of proceedings within which to file an answer thereto.

§ 1720.145 Content of answer.

An answer to a suspension notice or a notice of proceedings shall contain:

(a) A brief statement of the facts constituting each defense; and

(b) Specific admission, denial or explanation of each fact alleged in the notice, or if the respondent is without knowledge thereof a statement to that effect. Allegations not answered in this matter shall be deemed to have been admitted.

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Parties may propose in writing, at any time during the course of a proceeding, offers of settlement which shall be submitted to and considered by the Secretary or his designee. If determined to be appropriate, the party making the offer may be given an opportunity to make an oral presentation in support of such offer. If an offer of settlement is rejected, the party making the offer shall be so notified and the offer shall be deemed withdrawn and shall not constitute a part of the record in the proceeding. Final acceptance by the Secretary or his designee of any offer of settlement will automatically terminate any proceeding related thereto.

§ 1720.155

Hearings-suspension

no

tice pursuant to § 1710.45 (a) of this chapter.

(a) A developer, upon receipt of a suspension notice issued pursuant to § 1710.45 (a) of this chapter, may obtain a hearing by filing a written request in accordance with the instructions regarding such request contained in the suspension notice. Such request must be filed within 15 days of receipt of the suspension notice and must be accompanied by an answer and 3 copies thereof signed by the respondent or his attorney conforming to the requirements of § 1720.145. Filing of a motion for a more definite statement pursuant to § 1720.135 shall alter the period of time to request a hearing as follows:

(1) If the motion is denied, the request for hearing accompanied by the answer

must be filed within 15 days after service of the denial.

(2) If the motion is granted, in whole or in part, the more definite statement of allegations shall be filed after service of the order granting the motion and the request for hearing accompanied by the answer shall be filed within 15 days after service of the more definite statement of allegations.

(b) When a hearing is requested pursuant to paragraph (a) of this section, such hearing shall be held within 20 days of receipt of the request. The time and place for hearing shall be fixed with due regard for the public interest and the convenience and necessity of the parties or their representatives.

(c) A request for hearing filed pursuant to paragraph (a) of this section shall not interrupt or annul the effectiveness of the suspension notice, and suspension of the effective date of the statement or amendment shall continue until vacated by order of the Secretary. Except in cases in which the developer shall waive or withdraw his request for such hearing, or shall fail to pursue the same by appropriate appearance at a hearing duly scheduled, noticed and convened, the suspended filing shall be reinstated in the event of failure of the Secretary or his designee to schedule, give notice of or hold a duly-requested hearing within the time specified in paragraph (b) of this section, or in the event of a finding that the Secretary has failed to support at such hearing the propriety of the suspension with respect to the material issues of law and fact raised by the answer. Such reinstatement shall be effective on the date on which the filing would have become effective had no notice of suspension been issued with respect to it.

§ 1720.160 Hearings-notice of proceedings pursuant to § 1710.45 (b)(1) of this chapter.

(a) A developer, upon receipt of a notice of proceedings issued pursuant to § 1710.45 (b) (1) of this chapter, may obtain a hearing by filing a written request in accordance with the instructions regarding such request contained in the notice of proceedings. Such a request must be filed within 15 days of receipt of the notice of proceedings or in the case of a request for a more definite statement within 15 days after receipt of either the more definite statement or the denial thereof. The request must be ac

companied by an answer conforming to the requirements of § 1720.145.

(b) When a hearing is requested pursuant to paragraph (a) of this section, a date for such hearing shall be scheduled within 20 days of receipt of the request. The time and place for hearing shall be fixed with due regard for the public interest and the convenience and necessity of the parties or their representatives.

(c) Failure to answer within the time allowed by § 1720.140 or failure of a developer to appear at a hearing duly scheduled shall result in an appropriate order under § 1710.45 (b) (1) of this chapter suspending the statement of record. Such order shall be effective as of the date of issuance.

§ 1720.165

Hearings-suspension order issued pursuant to § 1710.45(b)(2) of this chapter.

(a) A developer, upon receipt of a suspension order issued pursuant to subparagraph (2) of § 1710.45 (b) of this chapter, may obtain a hearing by filing a written request in accordance with the instructions regarding such request contained in the suspension order. Such request must be filed within 15 days of receipt of the suspension order and must be accompanied by an answer conforming to the requirements of § 1720.145.

(b) When a hearing is requested pursuant to paragraph (a) of this section, a date for such hearing shall be scheduled within 20 days of receipt of the request. The time and place for hearing shall be fixed with due regard for the public interest and the convenience and necessity of the parties or their representatives.

§ 1720.170 Intervention by interested persons.

(a) Upon timely application, the Secretary or his designee upon petition in writing and for good cause shown, and if deemed to be in the public interest, may permit any person to participate by intervention in the proceeding. The petition shall contain (1) the petitioner's relationship to and interest in the matters contained in the proceeding; (2) a concise statement of his position with respect to each specific issue upon which he proposes to intervene, and of the facts which he proposes to adduce in support of each such position; and (3) an assent to exercise of jurisdiction by the Department with respect to the petitioner.

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When more than one proceeding involves a common question of law or fact, the Secretary or his designee may order a joint hearing of any or all of the matters in issue in the proceedings and may make such orders concerning the proceedings as may tend to avoid unnecessary costs or delay.

§ 1720.190 Administrative law judge, powers and duties.

(a) Hearings in adjudicative proceedings shall be presided over by a duly qualified administrative law judge who shall be designated by the Secretary in a notice to the parties in the proceeding.

(b) Administrative law judges shall have the duty to conduct fair and impartial hearings, to take all necessary action to avoid delay in the disposition of proceedings and to maintain order. They shall have all powers necessary to those ends including all powers granted under 5 U.S.C. 556 (c), and also including but not limited to the following:

(1) To administer oaths and affirmations.

(2) To issue subpoenas and orders requiring access.

(3) To take or to cause depositions to be taken.

(4) To rule upon offers of proof and receive evidence.

(5) To regulate the course of the hearings and the conduct of the parties and their counsel.

(6) To hold conferences for simplification and clarification of the issues or any other purpose.

(7) To consider and rule upon, as justice may require, all procedural and other motions appropriate in an adjudicative proceeding, including motions to open defaults.

(8) To make and file initial decisions. (9) To certify questions to an appeals officer on the Interstate Land Sales Board for his determination.

(10) To take any action authorized by the rules in this part or other appropriate action.

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