2012 New Hampshire Revised Statutes
Title XXXVIII - SECURITIES
Chapter 421-B - SECURITIES
Section 421-B:16 - Denial, Suspension, and Revocation of Registration.

    421-B:16 Denial, Suspension, and Revocation of Registration. –
    I. 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:
       (a) That the order is in the public interest; and
       (b) That any of the following are true:
          (1) 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 RSA 421-B:15, X, as of its effective date, or any report under RSA 421-B:15, XI 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;
          (2) Any provision of this chapter or any rule lawfully imposed under this chapter has been willfully violated, in connection with the offering, by
             (i) The person filing the registration statement,
             (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;
          (3) 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 the secretary of state may not institute a proceeding against an effective registration statement under this numbered subparagraph more than one year from the date of the order or injunction relied on, and may not enter an order under this numbered subparagraph on the basis of an order or injunction entered under any other state law unless that order or injunction was based on facts which would currently constitute a ground for a stop order under this numbered subparagraph;
          (4) The issuer's enterprise or method of business includes or would include activities which are illegal where performed;
          (5) The offering has worked or tended to work a fraud upon purchasers or would so operate;
          (6) 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;
          (7) Except with respect to securities which are being registered by notification the terms of the securities are unfair and inequitable; provided, however, that the secretary of state may not determine that an offering is unfair and inequitable solely on the grounds that the securities are to be sold at an excessive price where the offering price has been determined by arms length negotiation between nonaffiliated parties. The selling price of any security being sold by a broker-dealer licensed in this state shall be presumed to have been determined by arms length negotiation;
          (8) When a security is sought to be registered by notification and it is not eligible for such registration;
          (9) When a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by RSA 421-B:13, II(d);
          (10) 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 numbered subparagraph and he shall vacate any such order when the deficiency has been corrected;
          (11) The secretary of state may not institute a stop-order proceeding 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 30 days.
    II. The secretary of state may issue an order requiring the person for whom a registration was made to show cause why the registration should not be revoked. The order shall be calculated to give reasonable notice of the time and place for the revocation hearing, and shall state the reasons for the issuance of the order. The secretary of state may by order summarily suspend a registration pending final determination of any order to show cause, provided the secretary of state finds the public interest will be irreparably harmed by delay in issuing such order. If the registration is suspended pending final determination of any order to show cause, a hearing on the merits shall be held within 10 days of the issuance of the order or suspension.
    II-a. The secretary of state may issue a stop order suspending the offer and sale of a federal covered security, except a covered security under section 18(b)(1) of the Securities Act of 1933, if the secretary of state finds that:
          (1) The order is in the public interest; and
          (2) There is a failure to comply with any condition established under sections RSA 421-B:2, 421-B:11, or 421-B:31.
    III. All hearings shall be conducted in accordance with the rules adopted for the purposes of this chapter. After the hearing, the secretary of state shall enter an order making such disposition of the matter as the facts require. If the person for whom the registration was made fails to appear at a hearing of which he has been duly notified, such person shall be deemed in default and the proceeding may be determined against him upon consideration of the order to show cause, the allegations of which may be deemed to be true. The secretary of state may adopt rules of procedure concerning all proceedings conducted pursuant to this section.
    IV. The secretary of state may vacate or modify a stop order if he finds that the conditions which prompted entry have changed or that it is otherwise in the public interest to do so.

Source. 1981, 214:1. 1987, 411:2. 1991, 355:81, 89, II. 1992, 288:31, 46. 1997, 296:17, eff. June 20, 1997.