Public Law 119-73 (01/23/2026)

7 U.S.C. § 499h

Grounds for suspension or revocation of license

(a)

Authority of Secretary

section 499f of this titlesection 499b of this titlesection 499n(b) of this titleWhenever (1) the Secretary determines, as provided in , that any commission merchant, dealer, or broker has violated any of the provisions of , or (2) any commission merchant, dealer, or broker has been found guilty in a Federal court of having violated , the Secretary may publish the facts and circumstances of such violation and/or, by order, suspend the license of such offender for a period not to exceed ninety days, except that, if the violation is flagrant or repeated, the Secretary may, by order, revoke the license of the offender.

(b)

Unlawful employment of certain persons; restrictions; bond assuring compliance; approval of employment without bond; change in amount of bond; payment of increased amount; penalties

Except with the approval of the Secretary, no licensee shall employ any person, or any person who is or has been responsibly connected with any person—
(1)
whose license has been revoked or is currently suspended by order of the Secretary;
(2)
section 499b of this title who has been found after notice and opportunity for hearing to have committed any flagrant or repeated violation of , but this provision shall not apply to any case in which the license of the person found to have committed such violation was suspended and the suspension period has expired or is not in effect; or
(3)
section 499g(c) of this title against whom there is an unpaid reparation award issued within two years, subject to his right of appeal under .
section 499b of this titlesection 499g(c) of this titleThe Secretary may approve such employment at any time following nonpayment of a reparation award, or after one year following the revocation or finding of flagrant or repeated violation of , if the licensee furnishes and maintains a surety bond in form and amount satisfactory to the Secretary as assurance that such licensee’s business will be conducted in accordance with this chapter and that the licensee will pay all reparation awards, subject to its right of appeal under , which may be issued against it in connection with transactions occurring within four years following the approval. The Secretary may approve employment without a surety bond after the expiration of two years from the effective date of the applicable disciplinary order. The Secretary, based on changes in the nature and volume of business conducted by the licensee, may require an increase or authorize a reduction in the amount of the bond. A licensee who is notified by the Secretary to provide a bond in an increased amount shall do so within a reasonable time to be specified by the Secretary, and if the licensee fails to do so the approval of employment shall automatically terminate. The Secretary may, after thirty days notice and an opportunity for a hearing, suspend or revoke the license of any licensee who, after the date given in such notice, continues to employ any person in violation of this section. The Secretary may extend the period of employment sanction as to a responsibly connected person for an additional one-year period upon the determination that the person has been unlawfully employed as provided in this subsection.
(c)

Fraud in procurement

section 499d(b) of this titleIf, after a license shall have been issued to an applicant, the Secretary believes that the license was obtained through a false or misleading statement in the application therefor or through a misrepresentation, concealment, or withholding of facts respecting any violation of this chapter by any officer, agent, or employee, he may, after thirty days’ notice and an opportunity for a hearing, revoke said license, whereupon no license shall be issued to said applicant or any applicant in which the person responsible for such false or misleading statement or misrepresentation, concealment, or withholding of facts is financially interested, except under the conditions set forth in .

(d)

Injunction

section 499c(a) of this titleIn addition to being subject to the penalties provided by , any commission merchant, dealer, or broker who engages in or operates such business without a valid and effective license from the Secretary shall be liable to be proceeded against in any court of competent jurisdiction in a suit by the United States for an injunction to restrain such defendant from further continuing so to engage in or operate such business, and, if the court shall find that the defendant is continuing to engage in such business without a valid and effective license, the court shall issue an injunction to restrain such defendant from continuing to engage in or to operate such business without such license.

(e)

Alternative civil penalties

section 499f of this titlesection 499b of this titleIn lieu of suspending or revoking a license under this section when the Secretary determines, as provided by , that a commission merchant, dealer, or broker has violated or subsection (b) of this section, the Secretary may assess a civil penalty not to exceed $2,000 for each violative transaction or each day the violation continues. In assessing the amount of a penalty under this subsection, the Secretary shall give due consideration to the size of the business, the number of employees, and the seriousness, nature, and amount of the violation. Amounts collected under this subsection shall be deposited in the Treasury of the United States as miscellaneous receipts.

June 10, 1930, ch. 436, § 846 Stat. 535Apr. 13, 1934, ch. 120, § 1448 Stat. 588Aug. 20, 1937, ch. 719, § 1150 Stat. 730July 30, 1956, ch. 786, § 570 Stat. 727Pub. L. 87–725, § 1176 Stat. 675Pub. L. 102–237, title X, § 1011(6)105 Stat. 1898Pub. L. 104–48109 Stat. 430(, ; , ; , ; , ; , , ; , , ; , §§ 11, 12(b), , , 431.)

Editorial Notes

Codification

section 558 of this titleSection was formerly classified to .

Amendments

Pub. L. 104–48, § 12(b)1995—Subsec. (b). , inserted at end “The Secretary may extend the period of employment sanction as to a responsibly connected person for an additional one-year period upon the determination that the person has been unlawfully employed as provided in this subsection.”

Pub. L. 104–48, § 11Subsec. (e). , added subsec. (e).

Pub. L. 102–2371991—Subsec. (a). redesignated cls. (a) and (b) as (1) and (2), respectively, and substituted a period for semicolon at end.

Pub. L. 87–725section 499b of this titlesection 499g(c) of this titlesection 499b of this titlesection 499g(c) of this title1962—Subsec. (b). amended subsec. (b) generally, and among other changes, provided that any licensee hiring any person without the Secretary’s approval in violation of this section, after notice and opportunity for hearing, may have his license suspended or revoked, that the restrictions shall apply to persons found, after notice and opportunity for hearing, to have committed any flagrant or repeated violation of , but not where such violator’s license was suspended and the suspension has expired or is not in effect, and shall also apply to persons against whom there is a unpaid reparation award issued within two years, subject to appeal under , permitted the Secretary to approve employment at any time following nonpayment of a reparation award, or after one year following the revocation or finding of flagrant and repeated violation of , if the licensee furnishes a bond as assurance that his business will be conducted in accordance with this chapter and he will pay all reparation awards issued within four years following approval, subject to appeal under , or without bond after two years from the effective date of the disciplinary order, authorized the Secretary to increase or decrease the amount of bond, and required licensees notified of an increased bond to provide such in a reasonable time or the approval of employment will terminate.

1956—Subsec. (b). Act , provided for suspension of licenses, and restricted authority to permit employment to those cases where licenses have been revoked or suspended for failure to pay a reparation award.

section 499n(b) of this titlesection 499b of this title1937—Subsec. (a). Act , among other changes, inserted cl. (a) designation and inserted “or (b) any commission merchant, dealer, or broker has been found guilty in a Federal court of having violated ” after “”.

Subsec. (b). Act , amended subsec. (b) generally.

Subsecs. (c), (d). Act , added subsecs. (c) and (d).

1934—Subsec. (b). Act , added subsec. (b).