2001 Administrative Actions
Westmark Asset Management Corp. and Michael Usher - Case No. 00CA2125 (Colorado Court of Appeals)
PRESS RELEASE - For Immediate Release
October 25, 2001
Fred J. Joseph
Colorado Division of Securities
The Colorado Court of Appeals upholds final order by the Securities Commissioner
The Colorado Court of Appeals upheld a final order by the Securities Commissioner, Case No. XY-99-04, entered in October 2000 denying the application by Westmark and Usher for licensure in Colorado as an investment advisor and investment adviser representative, respectively. The Securities Commissioner's order reversed the recommendation by an Administrative Law Judge that denial of the applications would not be in the public interest, notwithstanding that Usher was subject to a statutory disqualification under the Colorado Securities Act based on a securities industry bar previously issued by the National Association of Securities Dealers Regulation, Inc.
In affirming the Securities Commissioner's order, the Court of Appeals rejected arguments by Westmark and Usher that they had been denied due process in the proceedings before the ALJ, and specifically that the standard for what constituents the "public interest" was not articulated. According to the Court, the Securities Commissioner and the ALJ applied the same standard for "public interest" under Steadman v. Securities and Exchange Commission, 603 F.2d 1126 (5th Cir. 1979). However, the Court further held the Securities Commissioner may substitute his own judgment in making findings of ultimate fact from the record as long as the Commissioner's findings have a reasonable basis in law and supported by substantial evidence, which was the case here.