As Amended
SEC. 75-71-425. Denial, suspension or revocation of effectiveness of registration statement; stop order; grounds therefor.
The secretary of state may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any registration statement if he finds (1) that the order is in the public interest and (2) that:
(A) The registration statement as of its effective date or as of any earlier date in the case of an order denying effectiveness, or any amendment under section 75-71-423 as of its effective date, or any report under section 75-71-421 is incomplete in any material respect or contains any statement which was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact;
(B) Any provision of this chapter or any rule, order or condition lawfully imposed under this chapter has been wilfully violated, in connection with the offering, by (i) the person filing the registration statement, or (ii) the issuer, any partner, officer or director of the issuer, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling or controlled by the issuer, but only if the person filing the registration statement is directly or indirectly controlled by or acting for the issuer, or (iii) any underwriter;
(C) The security registered or sought to be registered is the subject of an administrative stop order or similar order or a permanent or temporary injunction of any court of competent jurisdiction entered under any other federal or state act applicable to the offering; but (i) the secretary of state shall not institute a proceeding against an effective registration statement under this clause more than one (1) year from the date of the order or injunction relied on, and (ii) he shall not enter an order under this clause on the basis of an order or injunction entered under any other state act unless that order or injunction was based on facts which would currently constitute a ground for a stop order under this section;
(D) The issuer's enterprise or method of business includes or would include activities which are illegal where performed;
(E) The offering has worked or tended to work a fraud upon purchasers or would so operate;
(F) The offering has been or would be made with unreasonable amounts of underwriters' and sellers' discounts, commissions or other compensation, or promoters' profits or participation, or unreasonable amounts or kinds of options;
(G) When a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by section 75-71-403 (b)(4); or
(H) The applicant or registrant has failed to pay the proper filing fee; but the secretary of state may enter only a denial order under this clause and he shall vacate any such order when the deficiency has been corrected.
SOURCES: Laws, 1981, ch. 521, Sec. 305, eff from and after July 1, 1981.