Download as PDF
292.390 Denial, suspension, and revocation of registration.
(1)
The commissioner may issue a stop order denying effectiveness to, or
suspending or revoking the effectiveness of, any registration statement if he
finds that the order is in the public interest and 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
KRS 292.380(5) as of its effective date, 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 willfully violated, in connection with
the offering by:
1.
The person filing the registration statement;
2.
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
3.
Any underwriter;
(c) The security registered or sought to be registered is the subject of an
administrative stop order or a 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:
1.
The commissioner may not institute a proceeding against an
effective registration statement under this paragraph more than one
(1) year from the date of the order or injunction relied on; and
2.
He may not enter an order under this paragraph on the basis of an
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
compensations, or promoters' profits or participation, or unreasonable
amounts or kinds of options;
(g) When a security is sought to be registered by notification it is not eligible
for such registration;
(h) When a security is sought to be registered by coordination, there has
been a failure to comply with the undertaking required by KRS
292.360(2)(g);
(i) The applicant or registrant has failed to pay the proper registration fee;
(2)
(3)
but the commissioner may enter only a denial order under this paragraph
and he shall vacate any such order when the deficiency has been
corrected;
(j) Commissions, compensation, and selling and other transaction expenses
greater than twenty percent (20%) in the aggregate, or such other amount
specified in the guidelines adopted by the North American Securities
Administrators Association, would be paid directly or indirectly, in
consideration for the sale of securities sought to be registered.
The commissioner may not enter a stop order against an effective registration
statement on the basis of a fact or transaction known to him when the
registration statement became effective unless the proceeding is instituted
within the next thirty (30) days.
The commissioner may by order summarily postpone or suspend the
effectiveness of the registration statement pending final determination of any
proceeding under this section. Upon the entry of a stop order under any part of
this section, the commissioner shall promptly notify the issuer of the securities,
the applicant or registrant, and the person on whose behalf the securities are to
be or have been offered that the order has been entered and of the reasons
therefor and that within fifteen (15) days after the receipt of a written request
the matter will be set down for hearing. If no hearing is requested within fifteen
(15) days and none is ordered by the commissioner, the commissioner shall
enter his written findings of fact and conclusions of law and the order will
remain in effect until it is modified or vacated by the commissioner. If a hearing
is requested or ordered, the commissioner, after notice of and opportunity for
hearing to the issuer and to the applicant or registrant, shall enter his written
finding of fact and conclusions of law and may modify or vacate the order. The
commissioner may modify or vacate a stop order if he finds that the conditions
which prompted its entry have changed or that it is otherwise in the public
interest to do so.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 867, effective July 15, 2010. -Amended 1998 Ky. Acts ch. 20, sec. 10, effective July 15, 1998. -- Amended
1994 Ky. Acts ch. 165, sec. 10, effective July 15, 1994. -- Amended 1972 Ky.
Acts ch. 265, sec. 9. -- Amended 1966 Ky. Acts ch. 51, sec. 1. -- Created 1960
Ky. Acts ch. 110, sec. 8, effective January 1, 1961.
Disclaimer: These codes may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.