2023 New Mexico Statutes
Chapter 58 - Financial Institutions and Regulations
Article 13C - New Mexico Uniform Securities
Article 3 - Registration of Securities and Notice Filing of Federal Covered Securities
Section 58-13C-306 - Denial, suspension and revocation of securities registration.
A. The director may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, a registration statement if the director finds that the order is in the public interest and that:
(1) the registration statement as of its effective date or before the effective date in the case of an order denying effectiveness, an amendment pursuant to Subsection J of Section 305 [58-13C-305 NMSA 1978] of the New Mexico Uniform Securities Act as of its effective date or a report pursuant to Subsection I of Section 305 of that act, is incomplete in a material respect or contains a statement that, in the light of the circumstances under which it was made, was false or misleading with respect to a material fact;
(2) the New Mexico Uniform Securities Act or a rule adopted or order issued pursuant to that act or a condition imposed pursuant to that act has been willfully violated, in connection with the offering, by the person filing the registration statement; by the issuer, a partner, officer or director of the issuer or a person having a similar status or performing a similar function; a promoter of the issuer; or a 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 by an underwriter;
(3) the security registered or sought to be registered is the subject of a permanent or temporary injunction of a court of competent jurisdiction or an administrative stop order or similar order issued pursuant to any federal, foreign or state law other than the New Mexico Uniform Securities Act applicable to the offering, but the director shall not institute a proceeding against an effective registration statement pursuant to this paragraph more than one year after the date of the order or injunction on which it is based, and the director shall not issue an order pursuant to this paragraph on the basis of an order or injunction issued pursuant to the securities act of another state unless the order or injunction was based on conduct that would constitute, as of the date of the order, a ground for a stop order pursuant to this section;
(4) the issuer's enterprise or method of business includes or would include activities that are unlawful where performed;
(5) with respect to a security sought to be registered pursuant to Section 303 [58-13C-303 NMSA 1978] of the New Mexico Uniform Securities Act, there has been a failure to comply with the undertaking required by Paragraph (4) of Subsection B of Section 303 of that act;
(6) the applicant or registrant has not paid the filing fee, but the director shall void the order if the deficiency is corrected; or
(7) the offering:
(a) will work or tend to work a fraud upon purchasers or would so operate;
(b) has been or would be made with unreasonable amounts of underwriters' and sellers' discounts, commissions or other compensation, or promoters' profits or participations or unreasonable amounts or kinds of options; or
(c) is being made on terms that are unfair, unjust or inequitable.
B. To the extent practicable, the director by rule adopted or order issued pursuant to the New Mexico Uniform Securities Act shall publish standards that provide notice of conduct that violates Paragraph (7) of Subsection A of this section.
C. The director shall not institute a stop order proceeding against an effective registration statement on the basis of conduct or a transaction known to the director when the registration statement became effective unless the proceeding is instituted within thirty days after the registration statement became effective.
D. The director may summarily revoke, deny, postpone or suspend the effectiveness of a registration statement pending final determination of an administrative proceeding. Upon the issuance of the order, the director shall promptly notify each person specified in Subsection E of this section that the order has been issued, the reasons for the revocation, denial, postponement or suspension and that within fifteen days after the receipt of a request in a record from the person the matter will be scheduled for a hearing. If a hearing is not requested and none is ordered by the director within thirty days after the date of service of the order, the order becomes final. If a hearing is requested or ordered, the director, after notice of and opportunity for hearing for each person subject to the order, may modify or vacate the order or extend the order until final determination.
E. If a hearing is requested or ordered, such hearing shall be conducted pursuant to Subsection B of Section 604 [58-13C-604 NMSA 1978] of the New Mexico Uniform Securities Act. A stop order shall not be issued pursuant to this section, except in accordance with Subsection D of this section, without:
(1) appropriate notice to the applicant or registrant, the issuer and the person on whose behalf the securities are to be or have been offered;
(2) opportunity for hearing; and
(3) findings of fact and conclusions of law in a record.
F. The director shall modify or vacate a stop order entered pursuant to this section if the director finds that the conditions that prompted entry have changed or that it is otherwise in the public interest or for the protection of investors.
History: Laws 2009, ch. 82, § 306.
ANNOTATIONSEffective dates. — Laws 2009, ch. 82, § 704 made the New Mexico Uniform Securities Act effective January 1, 2010.
Securities bureau not constitutionally precluded from issuing sales permits. — N.M. Const., art. XI, § 6 (now repealed), does not preclude the legislature from designating the securities bureau as the body to issue permits for the sale of securities. 1981 Op. Att'y Gen. No. 81-20.
Corporation commission (now public regulation commission) not authorized to issue permits. — With the repeal of 48-18-18, 1953 Comp., the authority of the corporation commission (now public regulation commission) to issue permits for the sale of securities was cancelled. 1981 Op. Att'y Gen. No. 81-20.
Nothing in former Section 58-13-37 NMSA 1978 suggested that the authority of the corporation commission (now public regulation commission) to review decisions conferred on the commission the authority to issue permits. 1981 Op. Att'y Gen. No. 81-20.
Law reviews. — For article, "A Survey of the Securities Act of New Mexico," see 2 N.M.L. Rev. 1 (1972).
For article, "The Use (or Abuse) of the Limited Partnership in Financing Real Estate Ventures in New Mexico," see 3 N.M.L. Rev. 251 (1973).
For comment, "Securities: Private Placements in New Mexico," see 7 N.M.L. Rev. 105 (1976-77).
Am. Jur. 2d, A.L.R. and C.J.S. references. — 69A Am. Jur. 2d Securities Regulation - State § 112 et seq.
Persons liable for false registration statement under § 11 of Securities Act of 1933 (15 USCS § 77k), 114 A.L.R. Fed. 551.
