California Code, Corporations Code - CORP § 28705

(a)(1) That the subject person of a licensee has violated a provision of this division or of any regulation or order issued under this division or any provision of any other applicable law;

(2) That the subject person of a licensee has engaged or participated in any unsafe or unsound act with respect to the business of the licensee; or

(3) That the subject person of a licensee has engaged or participated in any act which constitutes a breach of his or her fiduciary duty as a subject person.

(b)(1) That the act, violation, or breach of fiduciary duty has caused or is likely to cause substantial financial loss or other damage to the licensee or the accredited investors of the licensee; or

(2) That the act, violation, or breach of fiduciary duty has seriously prejudiced or is likely to seriously prejudice the interests of the licensee or the accredited investors of the licensee; or

(3) That the subject person has received financial gain by reason of the act, violation, or breach of fiduciary duty.