California Code, Financial Code - FIN § 5616

Upon the filing of the application for a permit to sell securities, the commissioner shall examine the application and other papers and documents filed therewith, and he or she may make a detailed examination, audit, and investigation of the association and its affairs.  If the commissioner finds that the proposed plan for the issue and sale of such securities is fair, just, and equitable, the commissioner shall issue to the applicant a permit authorizing it to issue and dispose of its securities in such amounts and for such considerations and upon such terms and conditions as the commissioner may provide in the permit.  If the commissioner does not so find, the commissioner shall deny the application and notify the applicant in writing of his or her decision.