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Regulatory Compliance

What do I do if I receive a “formal complaint” or initiating order alleging a violation of the law or setting forth grounds for the denial of a license application?

  • You, as an individual on behalf of a “respondent” or “applicant,” may wish to consult with an attorney to fully understand your legal rights and responsibilities. The Bureau cannot provide legal advice, but you may call or email its Regulatory Compliance Division at 517-241-9590 or CSCL-FOIA@michigan.gov with procedural questions.  
  • Read the documents carefully, and respond in writing within the time frame(s) requested or required by law via email, mail, or fax using the contact information found within the documents or here.  
  • If you are a licensee, it is your obligation to promptly update your mailing address on file with the Bureau. Updating your mailing address with the Secretary of State or with the U.S. Postal Service does not notify the Bureau of a change of address. Commercial licensees may update their address by contacting the Bureau’s Licensing Division.  
  • If you are a respondent and do not respond within the required time frame(s), an initiating order could become final by operation of law without a formal hearing. If a formal hearing is required, you could be assessed administrative costs in addition to fines and other licensing penalties even if no one on your behalf attends the hearing. 
  • If you were served with an order summarily suspending a license, that license is no longer active, and the licensee must submit a written petition with the Bureau to dissolve the order.

What is a “compliance conference?”  

  • If the law entitles you to request a compliance conference, you will receive notice of that opportunity together with the initiating order or formal complaint you receive. In some instances where the law does not entitle you to request a compliance conference, you may receive an offer to both request a formal hearing and elect to first participate in a prehearing meeting with Bureau staff. In either case, the election form you receive will also enable you or your attorney to consent to receive service of process concerning only that proceeding exclusively via email. 
  • Compliance conferences and prehearing meetings are informal meetings, typically scheduled via telephone or videoconference, with an attorney on behalf of the Bureau and Bureau staff where you may demonstrate compliance with the law at all relevant times or why you should be granted a license or negotiate a settlement with the Bureau.
  • You may ask an attorney to attend this meeting at your own expense.

What is a “formal hearing?” What happens if no one appears at the hearing on my behalf?

  • If you decide to not participate in a compliance conference or prehearing meeting, you may submit a written request to proceed directly to a formal administrative hearing also referred to as a “contested case proceeding.” As a result, the Bureau will request a hearing date with the Michigan Office of Administrative Hearings and Rules. If the Bureau does not receive a response to an initiating order or formal complaint and a formal hearing is required before a final order may be issued, the Bureau will request a hearing date with the Michigan Office of Administrative Hearings and Rules.  
  • An administrative law judge (ALJ) employed by the Michigan Office of Administrative Hearings and Rules presides over formal hearings, which are currently being scheduled remotely by default, and the Bureau is represented in the proceeding by an attorney. You may also be represented by an attorney at your own expense. You (as the respondent or applicant) and the Bureau are the “parties” to the proceeding. See www.mi.gov/moahr for more information. 
  • The Michigan Office of Administrative Hearings and Rules mails all notices of hearing to the parties to the proceeding using the respondent or applicant’s mailing address or email address on file with the Bureau or to their attorney’s mailing address or email address. You or your attorney will need to copy the Bureau’s attorney on all correspondence sent to the ALJ and the Michigan Office of Administrative Hearings and Rules concerning the proceeding, including requests for adjournment. 
  • Both parties may call witnesses and introduce documentary evidence during the formal hearing. The ALJ will set deadlines, schedule any additional hearing dates, and rule on any motions or objections. You will not know the outcome of an evidentiary hearing until the ALJ issues either a “proposal for decision” or a “hearing report.”
  • If no one appears on your behalf at a formal hearing, a default could be entered against you. A default means that all of the allegations in the formal complaint or initiating order are found true, and, depending on the statute involved, a respondent could be assessed administrative costs of the proceeding on top of a fine and other licensing sanctions.

What happens after a formal hearing?

  • Either a “proposal for decision” or “hearing report” is mailed or emailed to both parties by the Michigan Office of Administrative Hearings and Rules and sets forth the ALJ’s findings of fact and conclusions of law.  
  • Under most of the laws administered by the Bureau, a proposal for decision is issued with proposed findings of fact and conclusions of law that may be modified by the Bureau Director in a final order. A proposal for decision also allows both parties to file written “exceptions” to it and a response to the exceptions within a short time frame specified in the proposal for decision. 
  • Under the Unarmed Combat Regulatory Act and the Occupational Code, a hearing report is issued containing findings of fact and conclusions of law reviewed by the Michigan Unarmed Combat Commission or the Board of Examiners in Mortuary Science. Neither may modify the findings of fact or conclusions of law, but they must determine the appropriate licensing penalties. Please note that the Board of Examiners in Mortuary Science only meets two times per year, and the Michigan Unarmed Combat Commission only meets four times per year. See www.mi.gov/ucc and www.mi.gov/mortuaryscience for more information.

What happens after a settlement is reached?

  • Settlement agreements may be negotiated between the parties at or following a compliance conference or prehearing meeting or just before a formal hearing date. 
  • Stipulations concerning violations of the Unarmed Combat Regulatory Act or the Occupational Code must be reviewed and either accepted or rejected by the relevant Commission or Board.
  • If a stipulation is accepted, a final order is issued by the Commission or Board following a public meeting. If a stipulation is rejected, a formal hearing is requested. 
  • Stipulation and consent orders concerning violations of the other statutes the Bureau administers are accepted, issued, and rejected by the Bureau Director. Similarly, if a stipulation and consent order is rejected, a formal hearing is requested.

Final orders and publication to the Bureau’s website

  • An initiating order may either become a “final order” by operation of law after a designated period of time, following the issuance of a stipulation and consent order, or following a formal hearing and the issuance of a final order. However, a formal complaint may only be resolved following the issuance of a stipulation and final order or a stipulation and consent order or following a formal hearing and the issuance of a final order.  
  • If a settlement was reached, you will receive a “Stipulation” and “Final Order” or “Stipulation and Consent Order” in the mail after the Bureau Director or the relevant Commission or Board reviews and accepts it. If a proposal for decision or hearing report is issued finding violations of the law or a basis for license application denial, you will receive a “Final Order” in the mail. 
  • The Bureau’s monthly reports of disciplinary actions taken listed by occupation or profession may be found by visiting www.mi.gov/cscl and clicking on “Disciplinary Action Reports” and “Licensing Reports.” You may be able to find additional documentation related to more recent disciplinary actions taken against persons licensed under the commercial statutes administered by the Bureau by visiting www.mi.gov/miclear, clicking on “Verify a License,” and searching by license type and name or by license number.
  • Disciplinary and denial orders issued under the Michigan Uniform Securities Act since mid-2016 are found by visiting www.mi.gov/cscl and clicking on “Disciplinary Action Reports” and “Securities Reports.” Disciplinary history and other licensing information from some persons may also be searched via BrokerCheck, https://brokercheck.finra.org, or the Investment Adviser Public Disclosure website, https://adviserinfo.sec.gov/IAPD/Default.aspx.

 

Who do I contact after a final order or stipulation and consent order is issued? How is a final order or stipulation and consent order enforced?

  • If the payment instruction form you receive together with the final order specifies that you may pay the debt online, you may pay by credit card. If it does not, you must pay by check or money order payable to “State of Michigan” to the mailing address indicated on the form. Documentation required by the final order may be mailed, emailed, or faxed c/o the Final Order Monitoring area of the Bureau’s Securities & Audit Division. Final order compliance or payment questions may be directed to Final Order Monitoring at 517-241-9180.  
  • Once a fine, audit costs, or administrative costs is overdue for six months, the Bureau generally refers the debt to the Michigan Department of Treasury for collection action. 
  • Depending on the terms of the final order, your license may also be automatically suspended, revoked, and/or not renewed, or a higher fine imposed based on non-compliance. And, even after you demonstrate late compliance, you may have to submit a written petition with the Bureau Director or the relevant Board or Commission to lift such a suspension or reinstate a revoked license before a license application is reviewed for approval. 
  • Some statutes allow the Bureau or another government regulator to seek disciplinary action against other licenses it administers based on the same individual or entity’s non-compliance with a final order issued against their original license. Under some statutes, the Bureau may also file a civil action in state circuit court to enforce the terms of an order or final order. 
  • Some statutes administered by the Bureau contain criminal provisions that it uses to make referrals to appropriate law enforcement agency or agencies based on suspected criminal violations of the statute.