There Is a Newer Version of the Wyoming Statutes

2010 Wyoming Statutes
Title 17 - Corporations, Partnerships And Associations
Chapter 4 - Securities

CHAPTER 4 - SECURITIES

17-4-101. Fraudulent practices prohibited in securities sales and purchases.

(a) It is unlawful for any person, in connection with the offer, sale or purchase of any security, directly or indirectly:

(i) To employ any device, scheme, or artifice to defraud;

(ii) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading; or

(iii) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.

17-4-102. Fraudulent practices prohibited in advisory activities.

(a) It is unlawful for any person who receives any consideration from another person primarily for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise:

(i) To employ any device, scheme, or artifice to defraud the other person; or

(ii) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the other person.

17-4-103. Broker-dealers and agents; registration required; notification when agent begins or terminates activities; expiration of registrations.

(a) It is unlawful for any person to transact business in this state as a broker-dealer or agent unless he is registered under this act.

(b) It is unlawful for any broker-dealer or issuer to employ an agent unless the agent is registered. The registration of an agent is not effective during any period when he is not associated with a particular broker-dealer registered under this act or a particular issuer. When an agent begins or terminates a connection with a broker-dealer or issuer, or begins or terminates those activities which make him an agent, the agent as well as the broker-dealer or issuer shall promptly notify the secretary of state.

17-4-104. Broker-dealers and agents; registration procedure generally; fees; successors; minimum capital requirements; surety bonds or deposits.

(a) Generally. - A broker-dealer or agent may obtain an initial or renewal registration by filing with the secretary of state an application together with a consent to service of process pursuant to W.S. 17-4-126(g). The application shall contain whatever information the secretary of state by rule requires concerning such matters as (i) the applicant's form and place of organization; (ii) the applicant's proposed method of doing business; (iii) the qualifications and business history of the applicant and, in the case of a broker-dealer, any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker-dealer; (iv) any injunction or administrative order or conviction of a misdemeanor involving a security or any aspect of the securities business and any conviction of a felony; and (v) the applicant's financial condition and history. The secretary of state may by rule or order require an applicant for initial registration to publish an announcement of the application in one (1) or more specified newspapers published in this state. If no denial order is in effect and no proceeding is pending under W.S. 17-4-106, registration becomes effective at noon of the thirtieth day after an application is filed. The secretary of state may by rule or order specify an earlier effective date, and he may by order defer the effective date until noon of the thirtieth day after the filing of any amendment. Registration of a broker-dealer automatically constitutes registration of any agent who is a partner, officer, or director, or a person occupying a similar status or performing similar functions.

(b) Every applicant for initial or renewal registration shall pay a filing fee of two hundred dollars ($200.00) in the case of a broker-dealer, and thirty-five dollars ($35.00) in the case of an agent. When an application is denied or withdrawn, the secretary of state shall retain the entire fee.

(c) Successors. - A registered broker-dealer may file an application for registration of a successor, whether or not the successor is then in existence, for the unexpired portion of the year. There shall be no filing fee.

(d) Minimum capital. - The secretary of state may by rule or order require a minimum capital for registered broker-dealers subject to the limitations of section 15 of the Securities Exchange Act of 1934.

(e) Surety bonds. - The secretary of state may by rule or order require registered broker-dealers and agents to post surety bonds in amounts as the secretary of state may prescribe, subject to the limitations of section 15 of the Securities Exchange Act of 1934, and may determine their conditions. Any appropriate deposit of cash or securities shall be accepted in lieu of any bond so required. No bond may be required of any registrant whose net capital, which may be defined by rule, exceeds the amounts required by the secretary of state. Every bond shall provide for suit thereon by any person who has a cause of action under W.S. 17-4-122 and, if the secretary of state by rule or order requires, by any person who has a cause of action not arising under this chapter. Every bond shall provide that no suit may be maintained to enforce any liability on the bond unless brought within two (2) years after the sale or other act upon which it is based.

17-4-105. Broker-dealers and agents; records; financial reports; amendments to documents filed; examinations.

(a) Every registered broker-dealer shall make and keep such accounts, correspondence, memoranda, papers, books, and other records as the secretary of state prescribes by rule or order, except as provided by section 15 of the Securities Exchange Act of 1934. All records so required shall be preserved for such period as the secretary of state prescribes by rule or order.

(b) Every registered broker-dealer shall file such financial reports as the secretary of state prescribes by rule or order, as provided by section 15 of the Securities Exchange Act of 1934.

(c) If the information contained in any document filed with the secretary of state is or becomes inaccurate or incomplete in any material respect, the registrant shall promptly file a correcting amendment unless notification of the correction has been given under W.S. 17-4-103(b).

(d) All the records referred to in subsection (a) of this section are subject at any time or from time to time to such reasonable periodic, special, or other examinations by representatives of the secretary of state, within or without this state, as the secretary of state deems necessary or appropriate in the public interest or for the protection of investors. For the purpose of avoiding unnecessary duplication of examinations, the secretary of state, insofar as he deems it practicable in administering this subsection, may cooperate with the securities administrators of other states, the securities and exchange commission, and any national securities exchange or national securities association registered under the Securities Exchange Act of 1934.

17-4-106. Broker-dealers and agents; denial, revocation, suspension, cancellation or withdrawal of registration.

(a) The secretary of state may by order deny, suspend, make conditional or probationary or revoke any registration or may impose a civil penalty, require restitution to investors, censure or reprimand, require remedial training, impose special reporting requirements or impose other conditions, which he determines to be in the public interest, against any registration or registered person if he finds:

(i) That the order is in the public interest; and

(ii) That the applicant or registrant or, in the case of a broker-dealer, any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker-dealer:

(A) Has filed an application for registration which as of its effective date, or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact;

(B) Has willfully violated or willfully failed to comply with any provision of this act or a predecessor act or any rule or order under this act or a predecessor act;

(C) Has been convicted, within the past ten (10) years, of any misdemeanor involving a security or any aspect of the securities business, or any felony;

(D) Is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the securities business;

(E) Is the subject of an order of the secretary of state denying, suspending, or revoking registration as a broker-dealer or agent;

(F) Is the subject of an order entered within the past five (5) years by the securities administrator of any other state or by the securities and exchange commission denying or revoking registration as a broker-dealer, agent, or investment adviser, or the substantial equivalent of those terms as defined in this act, or is the subject of an order of the securities and exchange commission suspending or expelling him from a national securities exchange or national securities association registered under the Securities Exchange Act of 1934, or is the subject of a United States post office fraud order; but:

(I) The secretary of state may not institute a revocation or suspension proceeding under subparagraph (F) more than one (1) year from the date of the order relied on; and

(II) He may not enter an order under subparagraph (F) on the basis of an order under another state act unless that order was based on facts which would currently constitute a ground for an order under this section.

(G) Has engaged in dishonest or unethical practices in the securities business;

(H) Is insolvent, either in the sense that his liabilities exceed his assets or in the sense that he cannot meet his obligations as they mature; but the secretary of state may not enter an order against a broker-dealer under this clause without a finding of insolvency as to the broker-dealer; or

(J) Is not qualified on the basis of such factors as training, experience, and knowledge of the securities business, except as otherwise provided in subsection (b) of this section.

(b) The secretary of state may by order deny, suspend, or revoke any registration if he finds:

(i) That the order is in the public interest; and

(ii) That the applicant or registrant:

(A) Has failed reasonably to supervise his agents if he is a broker-dealer; or

(B) Has failed to pay the proper filing fee; but the secretary of state may enter only a denial order under this subparagraph, and he shall vacate any such order when the deficiency has been corrected.

(c) The secretary of state may not institute a suspension or revocation proceeding on the basis of a fact or transaction known to him when registration became effective unless the proceeding is instituted within the next thirty (30) days.

(d) The following provisions govern the application of W.S. 17-4-106(a)(ii)(J):

(i) The secretary of state may not enter an order against a broker-dealer on the basis of the lack of qualification of any person other than:

(A) The broker-dealer himself if he is an individual; or

(B) An agent of the broker-dealer.

(ii) The secretary of state may not enter an order solely on the basis of lack of experience if the applicant or registrant is qualified by training or knowledge or both;

(iii) The secretary of state shall consider that an agent who will work under the supervision of a registered broker-dealer need not have the same qualifications as a broker-dealer;

(iv) The secretary of state may by rule provide for an examination, which may be written or oral or both, to be taken by any class of or all applicants, and provide for a reasonable fee to be paid before the examination is taken.

(e) The secretary of state may by order summarily postpone or suspend registration pending final determination of any proceeding under this section. Upon entry of the order, the secretary of state shall promptly notify the applicant or registrant, as well as the employer or prospective employer if the applicant or registrant is an agent, that it 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 and none is ordered by the secretary of state, the order will remain in effect until it is modified or vacated by the secretary of state. If hearing is requested or ordered, the secretary of state, after notice of and opportunity for hearing, may modify or vacate the order or extend it until final determination.

(f) If the secretary of state finds that any registrant or applicant for registration is no longer in existence or has ceased to do business as a broker-dealer or agent, or is subject to an adjudication of mental incompetence or to the control of a committee, conservator, or guardian, or cannot be located after reasonable search, the secretary of state may by order cancel the registration or application.

(g) Withdrawal from registration as a broker-dealer or agent becomes effective thirty (30) days after receipt of an application to withdraw or within such shorter period of time as the secretary of state may determine, unless a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke or suspend or to impose conditions upon the withdrawal is instituted within thirty (30) days after the application is filed. If a proceeding is pending or instituted, withdrawal becomes effective at such time and upon such conditions as the secretary of state by order determines. If no proceeding is pending or instituted and withdrawal automatically becomes effective, the secretary of state may nevertheless institute a revocation or suspension proceeding under W.S. 17-4-106(a)(ii)(B) within one (1) year after withdrawal became effective and enter a revocation or suspension order as of the last date on which registration was effective.

(h) No order may be entered under any part of this section except the first sentence of subsection (e) without:

(i) Appropriate notice to the applicant or registrant (as well as the employer or prospective employer if the applicant or registrant is an agent);

(ii) Opportunity for hearing; and

(iii) Written findings of fact and conclusions of law.

(j) Any order imposing a civil penalty, assessing costs, requiring restitution or imposing any other monetary penalty shall be entered in accordance with the provisions of W.S. 17-4-124(f). Civil and monetary penalties other than costs and restitution shall be collected and paid to the state treasurer and credited as provided in W.S. 8-1-109.

17-4-107. Registration of securities; required; exception for exemptions.

(a) It is unlawful for any person to offer or sell any security in this state unless:

(i) It is registered under this chapter;

(ii) The security or transaction is exempted under W.S. 17-4-114; or

(iii) It is a covered security.

17-4-108. Registration of securities; registration by notification.

(a) The following securities may be registered by notification, whether or not they are also eligible for registration by coordination under W.S. 17-4-109:

(i) Any security whose issuer and any predecessors have been in continuous operation for at least five (5) years if (A) there has been no default during the current fiscal year or within the three (3) preceding fiscal years in the payment of principal, interest, or dividends on any security of the issuer (or any predecessor) with a fixed maturity or a fixed interest or dividend provision, and (B) the issuer and any predecessors during the past three (3) fiscal years have had average net earnings, determined in accordance with generally accepted accounting practices, (I) which are applicable to all securities without a fixed maturity or a fixed interest or dividend provision outstanding at the date the registration statement is filed and equal at least five percent (5%) of the amount of such outstanding securities (as measured by the maximum offering price or the market price on a day, selected by the registrant, within thirty (30) days before the date of filing the registration statement, whichever is higher, or book value on a day, selected by the registrant, within ninety (90) days of the date of filing the registration statement to the extent that there is neither a readily determinable market price nor a cash offering price), or (II) which, if the issuer and any predecessors have not had any security of the type specified in clause (I) outstanding for three (3) full fiscal years, equal to at least five percent (5%) of the amount (as measured in clause (I)) of all securities which will be outstanding if all the securities being offered or proposed to be offered (whether or not they are proposed to be registered or offered in this state) are issued;

(ii) Any security registered for nonissuer distribution if (A) any security of the same class has ever been registered under this act or a predecessor act, or (B) the security being registered was originally issued pursuant to an exemption under this act or a predecessor act.

(b) A registration statement under this section shall contain the following information and be accompanied by the following documents in addition to the information specified in W.S. 17-4-111(c) and the consent to service of process required by W.S. 17-4-126(g):

(i) A statement demonstrating eligibility for registration by notification;

(ii) With respect to the issuer and any significant subsidiary: its name, address, and form of organization; the state (or foreign jurisdiction) and the date of its organization; and the general character and location of its business;

(iii) With respect to any person on whose behalf any part of the offering is to be made in a nonissuer distribution: his name and address; the amount of securities of the issuer held by him as of the date of the filing of the registration statement; and a statement of his reasons for making the offering;

(iv) A description of the security being registered;

(v) The information and documents specified in W.S. 17-4-110(b)(viii), (x) and (xii); and

(vi) In the case of any registration under W.S. 17-4-108(a)(ii) which does not also satisfy the conditions of W.S. 17-4-108(a)(i) a balance sheet of the issuer as of a date within four (4) months prior to the filing of the registration statement, and a summary of earnings for each of the two (2) fiscal years preceding the date of the balance sheet and for any period between the close of the last fiscal year and the date of the balance sheet, or for the period of the issuer's and any predecessors' existence if less than two (2) years.

(c) If no stop order is in effect and no proceeding is pending under W.S. 17-4-112, a registration statement under this section automatically becomes effective at one o'clock standard time in the afternoon of the second full business day after the filing of the registration statement or the last amendment, or at such earlier time as the secretary of state determines.

17-4-109. Registration of securities; registration by coordination.

(a) Any security for which a registration statement has been filed under the Securities Act of 1933, or for which a filing has been made pursuant to section 3(b) or 3(c) of that act, in connection with the same offering may be registered by coordination.

(i) Two (2) copies of the latest form of prospectus filed under the Securities Act of 1933;

(ii) If the secretary of state by rule or otherwise requires, a copy of the articles of incorporation and bylaws (or their substantial equivalent) currently in effect, a copy of any agreements with or among underwriters, a copy of any indenture or other instrument governing the issuance of the security to be registered, and a specimen or copy of the security;

(iii) If the secretary of state requests, any other information, or copies of any other documents, filed under the Securities Act of 1933; and

(iv) An undertaking to forward all amendments to the federal prospectus, other than an amendment which merely delays the effective date of the registration statement, promptly and in any event not later than the first business day after the day they are forwarded to or filed with the securities and exchange commission, whichever first occurs.

(c) A registration statement under this section automatically becomes effective at the moment the federal registration statement becomes effective if all the following conditions are satisfied:

(i) No stop order is in effect and no proceeding is pending under W.S. 17-4-112;

(ii) The registration statement has been on file with the secretary of state for at least ten (10) days; and

(iii) A statement of the maximum and minimum proposed offering prices and the maximum underwriting discounts and commissions has been on file for two (2) full business days or such shorter periods as the secretary of state permits by rule or otherwise and the offering is made within those limitations.

(d) The registrant shall promptly notify the secretary of state by telephone or telegram of the date and time when the federal registration statement became effective and the content of the price amendment, if any, and shall promptly file a post effective amendment containing the information and documents in the price amendment. "Price amendment" means the final federal amendment which includes a statement of the offering price, underwriting and selling discounts or commissions, amount of proceeds, conversion rates, call prices, and other matters dependent upon the offering price. Upon failure to receive the required notification and post effective amendment with respect to the price amendment, the secretary of state may enter a stop order, without notice or hearing, retroactively denying effectiveness to the registration statement or suspending its effectiveness until compliance with this subsection, if he promptly notifies the registrant by telephone or telegram (and promptly confirms by letter or telegraph when he notifies by telephone) of the issuance of the order. If the registrant proves compliance with the requirements of this subsection as to notice and post effective amendment, the stop order is void as of the time of its entry. The secretary of state may by rule or otherwise waive either or both of the conditions specified in paragraphs (c)(ii) and (iii) of this section. If the federal registration statement becomes effective before all the conditions in this subsection are satisfied and they are not waived, the registration statement automatically becomes effective as soon as all the conditions are satisfied. If the registrant advises the secretary of state of the date when the federal registration statement is expected to become effective, the secretary of state shall promptly advise the registrant by telephone or telegram, at the registrant's expense, whether all the conditions are satisfied and whether he then contemplates the institution of a proceeding under W.S. 17-4-112; but this advice by the secretary of state does not preclude the institution of such a proceeding at any time.

17-4-110. Registration of securities; registration by qualification.

(a) Any security may be registered by qualification.

(i) With respect to the issuer and any significant subsidiary: its name, address, and form of organization; the state or foreign jurisdiction and date of its organization; the general character and location of its business; a description of its physical properties and equipment; and a statement of the general competitive conditions in the industry or business in which it is or will be engaged;

(ii) With respect to every director and officer of the issuer, or person occupying a similar status or performing similar functions: his name, address, and principal occupation for the past five (5) years; the amount of securities of the issuer held by him as of a specified date within thirty (30) days of the filing of the registration statement; the amount of the securities covered by the registration statement to which he has indicated his intention to subscribe; and a description of any material interest in any material transaction with the issuer or any significant subsidiary effected within the past three (3) years or proposed to be effected;

(iii) With respect to persons covered by paragraph (b)(ii) of this section: the remuneration paid during the past twelve (12) months and estimated to be paid during the next twelve (12) months, directly or indirectly, by the issuer (together with all predecessors, parents, subsidiaries, and affiliates) to all those persons in the aggregate;

(iv) With respect to any person owning of record, or beneficially if known, ten percent (10%) or more of the outstanding shares of any class of equity security of the issuer: the information specified in paragraph (b)(ii) of this section other than his occupation;

(v) With respect to every promoter if the issuer was organized within the past three (3) years: the information specified in paragraph (b)(ii) of this section, any amount paid to him within that period or intended to be paid to him, and the consideration for any such payment;

(vi) With respect to any person on whose behalf any part of the offering is to be made in a nonissuer distribution: his name and address; the amount of securities of the issuer held by him as of the date of the filing of the registration statement; a description of any material interest in any material transaction with the issuer or any significant subsidiary effected within the past three (3) years of proposed to be effected; and a statement of his reasons for making the offering;

(vii) The capitalization and long-term debt (on both a current and pro forma basis) of the issuer and any significant subsidiary, including a description of each security outstanding or being registered or otherwise offered, and a statement of the amount and kind of consideration (whether in the form of cash, physical assets, services, patents, goodwill, or anything else) for which the issuer or any subsidiary has issued any of its securities within the past two (2) years or is obligated to issue any of its securities;

(viii) The kind and amount of securities to be offered; the proposed offering price or the method by which it is to be computed; any variation therefrom at which any portion of the offering is to be made to any person or class of persons other than the underwriters, with a specification of any such person or class; the basis upon which the offering is to be made if otherwise than for cash; the estimated aggregate underwriting and selling discounts or commissions and finders' fees (including separately cash, securities, contracts, or anything else of value to accrue to the underwriters or finders in connection with the offering) or, if the selling discounts or commissions are variable, the basis of determining them and their maximum and minimum amounts; the estimated amounts of other selling expenses, including legal, engineering, and accounting charges; the name and address of every underwriter and every recipient of a finder's fee; a copy of any underwriting or selling group agreement pursuant to which the distribution is to be made, or the proposed form of any such agreement whose terms have not yet been determined; and a description of the plan of distribution of any securities which are to be offered otherwise than through an underwriter;

(ix) The estimated cash proceeds to be received by the issuer from the offering; the purposes for which the proceeds are to be used by the issuer; the amount to be used for each purpose; the order or priority in which the proceeds will be used for the purposes stated; the amounts of any funds to be raised from other sources to achieve the purposes stated; the sources of any such funds; and, if any part of the proceeds is to be used to acquire any property (including goodwill) otherwise than in the ordinary course of business, the names and addresses of the vendors, the purchase price, the names of any persons who have received commissions in connection with the acquisition, and the amounts of any such commissions and any other expense in connection with the acquisition (including the cost of borrowing money to finance the acquisition);

(x) A description of any stock options or other security options outstanding, or to be created in connection with the offering, together with the amount of any such options held or to be held by every person required to be named in paragraph (b)(ii), (iv), (v), (vi), or (viii) of this section and by any person who holds or will hold ten percent (10%) or more in the aggregate of any such options;

(xi) The dates of, parties to, and general effect concisely stated of, every management or other material contract made or to be made otherwise than in the ordinary course of business if it is to be performed in whole or in part at or after the filing of the registration statement or was made within the past two (2) years, together with a copy of every such contract; and a description of any pending litigation or proceeding to which the issuer is a party and which materially affects its business or assets (including any such litigation or proceeding known to be contemplated by governmental authorities);

(xii) A copy of any prospectus, pamphlet, circular, form letter, advertisement, or other sales literature intended as of the effective date to be used in connection with the offering;

(xiii) A specimen or copy of the security being registered; a copy of the issuer's articles of incorporation and bylaws, or their substantial equivalents, as currently in effect; and a copy of any indenture or other instrument covering the security to be registered;

(xiv) A signed or conformed copy of an opinion of counsel as to the legality of the security being registered (with an English translation if it is in a foreign language), which shall state whether the security when sold will be legally issued, fully paid, and nonassessable, and, if a debt security, a binding obligation of the issuer;

(xv) The written consent of any accountant, engineer, appraiser, or other person whose profession gives authority to a statement made by him, if any such person is named as having prepared or certified a report or valuation (other than a public and official document or statement) which is used in connection with the registration statement;

(xvi) A balance sheet of the issuer as of a date within four (4) months prior to the filing of the registration statement; a profit and loss statement and analysis of surplus for each of the three (3) fiscal years preceding the date of the balance sheet and for any period between the close of the last fiscal year and the date of the balance sheet, or for the period of the issuer's and any predecessors' existence if less than three (3) years; and, if any part of the proceeds of the offering is to be applied to the purchase of any business, the same financial statements which would be required if that business were the registrant; and

(xvii) Such additional information as the secretary of state requires by rule or order.

(d) The secretary of state may by rule or order require as a condition of registration under this section that a prospectus containing any designated part of the information specified in subsection (b) be sent or given to each person to whom an offer is made before or concurrently with:

(i) The first written offer made to him (otherwise than by means of a public advertisement) by or for the account of the issuer or any other person on whose behalf the offering is being made, or by any underwriter or broker-dealer who is offering part of an unsold allotment or subscription taken by him as a participant in the distribution;

(ii) The confirmation of any sale made by or for the account of any such person;

(iii) Payment pursuant to any such sale; or

(iv) Delivery of the security pursuant to any such sale, whichever first occurs.

17-4-111. Registration of securities; registration provisions generally.

(a) Who may file statement. - A registration statement may be filed by the issuer, any other person on whose behalf the offering is to be made, or a registered broker-dealer.

(b) Every person shall pay a filing fee of 1/50 of 1 percent (.0002) of the total dollar offering amount to be offered in this state, but the fee shall in no case be less than two hundred dollars ($200.00) nor more than six hundred dollars ($600.00) when filing an initial registration statement or renewing a previously filed registration statement. When a registration statement is withdrawn before the effective date or a preeffective stop order is entered under W.S. 17-4-112 the secretary of state shall retain one hundred dollars ($100.00) of the fee.

(i) The amount of securities to be offered in this state;

(ii) The states in which a registration statement or similar document in connection with the offering has been or is to be filed; and

(iii) Any adverse order, judgment, or decree entered in connection with the offering by the regulatory authorities in each state or by any court or the securities and exchange commission.

(d) Incorporation of previously filed documents. - Any document filed under this act or a predecessor act within five (5) years preceding the filing of a registration statement may be incorporated by reference in the registration statement to the extent that the document is currently accurate.

(e) Permitting omissions from statement. - The secretary of state may by rule or otherwise permit the omission of any item of information or document from any registration statement.

(f) Information which may not be required. - In the case of a nonissuer distribution, information may not be required under W.S. 17-4-110 or 17-4-111(k) unless it is known to the person filing the registration statement or to the persons on whose behalf the distribution is to be made, or can be furnished by them without unreasonable effort or expense.

(g) Escrow or impounding. - The secretary of state may by rule or order require as a condition of registration by qualification or coordination (i) that any security issued within the past three (3) years or to be issued to a promoter for a consideration substantially different from the public offering price or to any person for a consideration other than cash, be deposited in escrow; and (ii) that the proceeds from the sale of the registered security in this state be impounded until the issuer receives a specified amount from the sale of the security either in this state or elsewhere. The secretary of state may by rule or order determine the conditions of any escrow or impounding required hereunder, but he may not reject a depository solely because of location in another state.

(h) Subscription or sale contract. - The secretary of state may by rule or order require as a condition of registration that any security registered by qualification or coordination be sold only on a specified form of subscription or sale contract, and that a signed or conformed copy of each contract be filed with the secretary of state or preserved for any period up to three (3) years specified in the rule or order.

(j) Duration of statement. - Every registration statement is effective for one (1) year from its effective date except during the time a stop order is in effect under W.S. 17-4-112. A request for renewing a registration statement for an additional year shall be accompanied by a sales report pursuant to subsection (k) of this section and the prescribed filing fee. All outstanding securities of the same class as a registered security are considered to be registered for the purpose of any nonissuer transaction (i) so long as the registration statement is effective and (ii) between the thirtieth day after the entry of any stop order suspending or revoking the effectiveness of the registration statement under W.S. 17-4-112 (if the registration statement did not relate in whole or in part to a nonissuer distribution) and one (1) year from the effective date of the registration statement. A registration statement may not be withdrawn for one (1) year from its effective date if any securities of the same class are outstanding. A registration statement may be withdrawn otherwise only in the discretion of the secretary of state.

(k) Reports. - So long as a registration statement is effective, the secretary of state may by rule or order require the person who filed the registration statement to file reports, not more often than quarterly, to keep reasonably current the information contained in the registration statement and to disclose the progress of the offering.

(m) Amendments. - A registration statement relating to a security issued by a face amount certificate company or a redeemable security issued by an open-end management company or unit investment trust, as those terms are defined in the Investment Company Act of 1940, may be amended after its effective date so as to increase the securities specified as proposed to be offered. Such an amendment becomes effective when the secretary of state so orders. Every person filing such an amendment shall pay the filing fee specified in subsection (b) of this section.

17-4-112. Registration of securities; denial, suspension or revocation of registration; stop orders.

(a) 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 that the order is in the public interest and that:

(i) 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 W.S. 17-4-111(m) as of its effective date, or any report under W.S. 17-4-111(k) 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;

(ii) Any provision of this act or any rule, order, or condition lawfully imposed under this act has been willfully violated, in connection with the offering, by:

(A) The person filing the registration statement;

(B) 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) 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:

(A) The secretary of state may not institute a proceeding against an effective registration statement under paragraph (iii) of this subsection more than one (1) year from the date of the order or injunction relied on; and

(B) He may not enter an order under paragraph (iii) of this subsection 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.

(iv) The issuer's enterprise or method of business includes or would include activities which are illegal where performed;

(v) The offering has worked or tended to work a fraud upon purchasers or would so operate;

(vi) 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;

(vii) When a security is sought to be registered by notification, it is not eligible for such registration;

(viii) When a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by W.S. 17-4-109(b)(iv); or

(ix) 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 subdivision and he shall vacate any such order when the deficiency has been corrected.

(b) 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 thirty (30) days.

(c) The secretary of state 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 the order, the secretary of state shall promptly notify each person specified in subsection (a) of this section that it 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 and none is ordered by the secretary of state, the order will remain in effect until it is modified or vacated by the secretary of state. If a hearing is requested or ordered, the secretary of state, after notice of and opportunity for hearing to each person specified in subsection (d) of this section, may modify or vacate the order or extend it until final determination.

(d) No stop order may be entered under any part of this section except the first sentence of subsection (c) of this section without:

(i) Appropriate notice to the applicant or registrant, the issuer, and the person on whose behalf the securities are to be or have been offered;

(ii) Opportunity for hearing; and

(iii) Written findings of fact and conclusions of law.

(e) The secretary of state may vacate or modify 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.

17-4-113. Definitions.

(a) When used in this act, unless the context otherwise requires:

(i) "Administrator" means the secretary of state;

(ii) "Agent" means any individual other than a broker-dealer who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities. "Agent" does not include an individual who represents (A) an issuer in (I) effecting transactions in a security exempted by W.S. 17-4-114(a)(i), (ii), (iii), (ix) or (x), (II) effecting transactions exempted by W.S. 17-4-114(b), (III) effecting transactions in a covered security as described in section 18(b)(3) and 18(b)(4)(D) of the Securities Act of 1933, or (IV) effecting transactions with existing employees, partners or directors of the issuer if no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state; or (B) a broker-dealer in effecting transactions in this state limited to those transactions described in section 15(h)(2) of the Securities Exchange Act of 1934. A partner, officer, or director of a broker-dealer or issuer, or a person occupying a similar status or performing similar functions, is an agent only if he otherwise comes within this definition;

(iii) "Broker-dealer" means any person engaged in the business of effecting transactions in securities for the account of others or for his own account. "Broker-dealer" does not include:

(A) An agent;

(B) An issuer;

(C) A bank, savings institution, or trust company, engaging in securities transactions limited to trust or banking functions and not with the general public;

(D) A person who has no place of business in this state if:

(I) He effects transactions in this state exclusively with or through (1) the issuers of the securities involved in the transactions, (2) other broker-dealers or (3) banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, pension or profit-sharing trusts, or other financial institutions or institutional buyers, whether acting for themselves or as trustees; or

(II) During any period of twelve (12) consecutive months he does not direct more than fifteen (15) offers to sell or buy into this state in any manner to persons other than those specified in subdivision (I) of this subparagraph, whether or not the offeror or any of the offerees is then present in this state.

(E) A person who is resident in Canada, has no office or other physical presence in this state, and complies with the following conditions:

(I) Is a member of a self-regulatory organization or stock exchange in Canada;

(II) Maintains his provincial or territorial registration and his membership in a self-regulatory organization or stock exchange in good standing;

(III) Is not in violation of W.S. 17-4-101; and

(IV) Only effects or attempts to effect transactions in securities:

(1) With or for a person from Canada who is temporarily present in this state, with whom the Canadian person had a bona fide business-client relationship before the person entered this state; or

(2) With or for a person from Canada who is present in this state, whose transactions are in a self-directed tax advantaged retirement plan in Canada of which the person is the holder or contributor.

(iv) "Fraud", "deceit", and "defraud" are not limited to common-law deceit;

(v) "Guaranteed" means guaranteed as to payment of principal, interest, or dividends;

(vi) "Issuer" means any person who issues or proposes to issue any security, except that with respect to certificates of deposit, voting trust certificates, or collateral trust certificates, or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors or persons performing similar functions or of the fixed, restricted management, or unit type, the term "issuer" means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which the security is issued;

(vii) "Nonissuer" means not directly or indirectly for the benefit of the issuer;

(viii) "Person" means an individual, a corporation, a partnership, an association, a joint-stock company, a trust where the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, or political subdivision of a government;

(ix)(A) "Sale" or "sell" includes every contract of sale of, contract to sell, or disposition of, a security or interest in a security for value;

(B) "Offer" or "offer to sell" includes every attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security for value;

(C) Any security given or delivered with, or as a bonus on account of, any purchase of securities or any other thing is considered to constitute part of the subject of the purchase and to have been offered and sold for value;

(D) A purported gift of assessable stock is considered to involve an offer and sale;

(E) Every sale or offer of a warrant or right to purchase or subscribe to another security of the same or another issuer, as well as every sale or offer of a security which gives the holder a present or future right or privilege to convert into another security of the same or another issuer, is considered to include an offer of the other security;

(F) The terms defined in this subsection do not include:

(I) Any bona fide pledge or loan;

(II) Any stock dividend, whether the corporation distributing the dividend is the issuer of the stock or not, if nothing of value is given by stockholders for the dividend other than the surrender of a right to a cash or property dividend when each stockholder may elect to take the dividend in cash or property or in stock;

(III) Any act incident to a class vote by stockholders, pursuant to the certificate of incorporation or the applicable corporation statute, on a merger, consolidation, reclassification of securities, or sale of corporate assets in consideration of the issuance of securities of another corporation; or

(IV) Any act incident to a judicially approved reorganization in which a security is issued in exchange for one (1) or more outstanding securities, claims, or property interests, or partly in such exchange and partly for cash.

(x) "Securities Act of 1933", "Securities Exchange Act of 1934", "Public Utility Holding Company Act of 1935", and "Investment Company Act of 1940" mean the federal statutes of those names as amended before or after the effective date of this act;

(xi) "Security" means any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit sharing agreement; collateral trust certificate; preorganization certificate or subscription; transferable share; investment contract; voting trust certificate; certificate of deposit for a security or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. "Security" does not include any insurance or endowment policy or annuity contract under which an insurance company promises to pay money either in a lump sum or periodically for life or for some other specified period;

(xii) "State" means any state, territory, or possession of the United States, the District of Columbia and Puerto Rico;

(xiii) "Covered security" means any security that is a covered security under section 18(b) of the Securities Act of 1933 or rules or regulations promulgated thereunder, except, up through October 10, 1999, or such other date as may be legally permissible, a covered security for which a fee has not been paid and promptly remedied following written notification from the secretary of state to the issuer of the nonpayment or underpayment of such fees, as required by this chapter, shall not be a covered security.

17-4-114. Exemptions from registration and literature filing requirements.

(a) The following securities are exempted from W.S. 17-4-107 and 17-4-115:

(i) Any security (including a revenue obligation) issued or guaranteed by the United States, any state, any political subdivision of a state, or any agency or corporate or other instrumentality of one (1) or more of the foregoing; or any certificate of deposit for any of the foregoing;

(ii) Any security issued or guaranteed by Canada, any Canadian province, any political subdivision of any such province, any agency or corporate or other instrumentality of one (1) or more of the foregoing, or any other foreign government with which the United States currently maintains diplomatic relations, if the security is recognized as a valid obligation by the issuer or guarantor;

(iii) Any security issued by a state or national bank authorized to do business in the state;

(iv) Any security issued by and representing an interest in or a debt of, or guaranteed by, any federal savings and loan association, or any building and loan or similar association organized under the laws of any state and authorized to do business in this state;

(v) Any security issued or guaranteed by any federal credit union or any credit union, industrial loan association, or similar association organized and supervised under the laws of this state;

(vi) Any security issued or guaranteed by any railroad, other common carrier, public utility, or holding company which is:

(A) Subject to the jurisdiction of the interstate commerce commission;

(B) A registered holding company under the Public Utility Holding Company Act of 1935 or a subsidiary of such a company within the meaning of that act;

(D) Regulated in respect of the issuance or guarantee of the security by a governmental authority of the United States, any state, Canada, or any Canadian province.

(vii) Any security listed or approved for listing upon notice of issuance on the New York stock exchange, the American stock exchange or the National Association of Securities Dealers Automated Quotation National Market System (NASDAQ/NMS), the Chicago board options exchange or any other exchange or national quotation system that the secretary of state may designate by rule or order; any other security of the same issuer which is of senior or substantially equal rank; any security called for by subscription rights or warrants so listed or approved; or any warrant or right to purchase or subscribe to any of the foregoing; or any security which meets all of the following conditions:

(A) If the issuer is not organized under the laws of the United States or a state, it has appointed a duly authorized agent in the United States for service of process and has set forth the name and address of such agent in its prospectus;

(B) A class of the issuer's securities shall be registered under Section 12 of the Securities Exchange Act of 1934 and has been so registered for three (3) years immediately preceding the offering date;

(C) Neither the issuer nor a significant subsidiary has had a material default during the lesser of the last seven (7) years or the issuer's existence in the payment of principal, interest, dividend or sinking fund installment on preferred stock or indebtedness or rentals under leases with terms of three (3) years or more. A "material default" is a failure to pay, the effect of which is to cause indebtedness to become due prior to its stated maturity or to cause termination or reentry under a lease prior to its stated expiration, if the indebtedness or the rental obligation for the unexpired term exceeds five percent (5%) of the issuer's (and its consolidated subsidiaries) total assets, or if the arrearage in required dividend payments on preferred stock is not satisfied within thirty (30) days;

(D) The issuer has had consolidated net income (before extraordinary items and the cumulative effect of accounting changes) of at least one million dollars ($1,000,000.00) in four (4) of its last five (5) fiscal years, including its last fiscal year. In the case of interest-bearing debt securities, such net income for the issuer's last fiscal year before depreciation and taxes, shall be one and one-half (1 1/2) times the issuer's annual interest expense, giving effect to the proposed offering and the intended use of proceeds. "Last fiscal year" means the most recent fiscal year for which audited financial statements are available, provided that such statements cover a fiscal period ended not more than fifteen (15) months from the commencement of the offering;

(E) If the offering is of stock or shares (other than preferred stock or shares), the securities are owned beneficially or of record, on any date within six (6) months prior to the commencement of the offering, by at least one thousand two hundred (1,200) persons, and on that date there are at least seven hundred fifty thousand (750,000) of the shares outstanding with an aggregate market value, based on the average bid price, of at least three million seven hundred fifty thousand dollars ($3,750,000.00). In determining the number of persons who are beneficial owners of the stock or shares of an issuer, the issuer or broker-dealer may rely in good faith upon written information furnished by the record owners;

(F) If the offering is of stock or shares (other than preferred stock or shares) and except as otherwise required by law, the securities have voting rights at least equal to the securities of each of the issuer's outstanding classes of stock or shares (other than preferred stock or shares), with respect to the number of votes per share and the right to vote on the same general corporate decisions;

(G) For good cause after hearing as held in accord with rules and regulations adopted in accord with the Wyoming Administrative Procedure Act and W.S. 17-4-124 the secretary of state may suspend applicability of any exemption provided in this section.

(viii) Any security issued by any person organized and operated not for private profit but exclusively for religious, educational, benevolent, charitable, fraternal, social, athletic, or reformatory purposes, or as a chamber of commerce or trade or professional association;

(ix) Any commercial paper which arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which evidences an obligation to pay cash within nine (9) months of the date of issuance, exclusive of days of grace, or any renewal of such paper which is likewise limited, or any guarantee of such paper or of any such renewal;

(x) Any investment contract issued in connection with an employee stock purchase, savings, pension, profit sharing, or similar benefit plan if the administrator is notified in writing thirty (30) days before the inception of the plan or with respect to plans which are in effect on the effective date of this act, within sixty (60) days thereafter (or within thirty (30) days before they are reopened if they are closed on the effective date of this act);

(xi) Any security of an investment company registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 through 80a-64) provided:

(A) The issuer of an open-end management company that offers or sells shares in Wyoming files a notice to claim this exemption and pays an annual fee of one hundred dollars ($100.00) within sixty (60) days of the company's fiscal year end;

(B) The sponsor of a unit investment trust that sponsors a unit investment trust that offers or sells shares in Wyoming files a notice to claim this exemption and pays a fee of one hundred dollars ($100.00).

(xii) Any security of any cooperative incorporated or organized under law of this or another state and qualified with the secretary of state to do business in this state, subject to the following:

(A) No commission or other remuneration is paid or given directly or indirectly for soliciting any prospective buyer in this state; and

(B) The security is necessary or incidental to establishing membership in the cooperative association; and

(D) The administrator is notified in writing at least thirty (30) days before the security is offered for sale. Notice under this subparagraph shall contain the form of disclosure or prospectus and other sales literature to be used in the security offering together with financial statements in a form required by the administrator.

(b) The following transactions are exempted from W.S. 17-4-107 and 17-4-115:

(i) Any isolated nonissuer transaction, whether effected through a broker-dealer or not;

(ii) Any nonissuer distribution of an outstanding security if:

(A) A recognized securities manual contains the names of the issuer's officers and directors, a balance sheet of the issuer as of a date within eighteen (18) months, and a profit and loss statement for either the fiscal year preceding that date or the most recent year of operations; or

(B) The security has a fixed maturity or a fixed interest or dividend provision and there has been no default during the current fiscal year or within the three (3) preceding fiscal years, or during the existence of the issuer and any predecessors if less than three (3) years, in the payment of principal, interest, or dividends on the security.

(iii) Any nonissuer transaction effected by or through a registered broker-dealer pursuant to an unsolicited order or offer to buy; but the secretary of state may by rule require that the customer acknowledge upon a specified form that the sale was unsolicited, and that a signed copy of each such form be preserved by the broker-dealer for a specified period;

(iv) Any transaction between the issuer or other person on whose behalf the offering is made and an underwriter, or among underwriters;

(v) Any transaction in a bond or other evidence of indebtedness secured by a real or chattel mortgage or deed of trust, or by an agreement for the sale of real estate or chattels, if the entire mortgage, deed of trust, or agreement, together with all the bonds or other evidences of indebtedness secured thereby, is offered and sold as a unit;

(vi) Any transaction by an executor, administrator, sheriff, marshal, receiver, trustee in bankruptcy, guardian, or conservator;

(vii) Any transaction executed by a bona fide pledgee without any purpose of evading this act;

(viii) Any offer or sale to a bank, savings institution, trust company, insurance company, investment company as defined in the Investment Company Act of 1940, pension or profit sharing trust, or other financial institution or institutional buyer, or to a broker-dealer, whether the purchaser is acting for itself or in some fiduciary capacity;

(ix) Any transaction pursuant to an offer directed by the offeror to not more than fifteen (15) persons (other than those designated in paragraph (viii) of this subsection) in this state during any period of twelve (12) consecutive months, whether or not the offeror or any of the offerees is then present in this state, if (A) the seller reasonably believes that all the buyers in this state (other than those designated in paragraph (viii) of this subsection) are purchasing for investment and (B) no commission or other remuneration is paid or given directly or indirectly for soliciting any prospective buyer in this state (other than those designated in paragraph (viii) of this subsection); but, upon application of the offeror and payment of a filing fee of two hundred dollars ($200.00), the secretary of state may by rule or order, as to any security or transaction or any type of security or transaction, withdraw or further condition this exemption, or increase or decrease the number of offerees permitted, or waive the conditions in clauses (A) and (B) with or without the substitution of a limitation on remuneration;

(x) Any offer or sale of a preorganization certificate or subscription if (A) no commission or other remuneration is paid or given directly or indirectly for soliciting any prospective subscriber, (B) the number of subscribers does not exceed fifteen (15) and (C) no payment is made by any subscriber;

(xi) Any transaction pursuant to an offer to existing security holders of the issuer, including persons who at the time of the transaction are holders of convertible securities, nontransferable warrants, or transferable warrants exercisable within not more than ninety (90) days of their issuance, if (A) no commission or other remuneration (other than a standby commission) is paid or given directly or indirectly for soliciting any security holder in this state, or (B) the issuer first files a notice specifying the terms of the offer and the secretary of state does not by order disallow the exemption within the next five (5) full business days;

(xii) Any offer (but not a sale) of a security for which registration statements have been filed under both this act and the Securities Act of 1933 if no stop order or refusal is in effect and no public proceeding or examination looking toward such an order is pending under either act;

(xiii) Any offer (but not a sale) of a security made by or on behalf of an issuer for the sole purpose of soliciting an indication of interest in receiving a prospectus or its equivalent for the security pursuant to rules promulgated by the secretary of state; or

(xiv) Any offer (but not a sale) of a security made on or through the Internet, the World Wide Web or a similar proprietary or common carrier electronic system, provided:

(A) The offer indicates, directly or indirectly, that the security is not being offered to residents of Wyoming;

(B) The offer is not specifically directed to any person in Wyoming by, or on behalf of, the issuer of the security; and

(C) No sales of the issuer's security are made in Wyoming as a result of the offer until such time as the security being offered has been registered under this chapter and a final prospectus or form U-7 is delivered to the offeree prior to such sale.

(xv) An offer or sale of a security effected by a person excluded from the definition of broker-dealer under W.S. 17-4-113(a)(iii)(E).

(c) The secretary of state may by order deny or revoke any exemption specified in paragraph (ix) or (x) of subsection (a) or in subsection (b) of this section with respect to a specific security or transaction. No such order may be entered without appropriate prior notice to all interested parties, opportunity for hearing, and written findings of fact and conclusions of law, except that the secretary of state may by order summarily deny or revoke any of the specified exemptions pending final determination of any proceeding under this subsection. Upon the entry of a summary order, the secretary of state shall promptly notify all interested parties that it has been entered and of the reasons therefor and that within fifteen (15) days of the receipt of a written request the matter will be set down for hearing. If no hearing is requested and none is ordered by the administrator, the order will remain in effect until it is modified or vacated by the secretary of state. If a hearing is requested or ordered, the secretary of state after notice of and opportunity for hearing to all interested persons may modify or vacate the order or extend it until final determination. No order under this subsection may operate retroactively. No person may be considered to have violated W.S. 17-4-107 or 17-4-115 by reason of any offer or sale effected after the entry of an order under this subsection if he sustains the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of the order.

(d) In any proceeding under this act, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

17-4-115. Filing of sales and advertising literature.

The secretary of state may by rule or order require the filing of any prospectus, pamphlet, circular, form letter, advertisement, or other sales literature or advertising communication addressed or intended for distribution to prospective investors, unless the security or transaction is exempted by W.S. 17-4-114 or is a covered security.

17-4-116. False statements in documents or proceedings.

It is unlawful for any person to make or cause to be made, in any document filed with the secretary of state or in any proceeding under this act, any statement which is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect.

17-4-117. Unlawful representations concerning approval of registration or exemption.

(a) Neither the fact that an application for registration under W.S. 17-4-103 through 17-4-106 or a registration statement under W.S. 17-4-107 through 17-4-112 has been filed nor the fact that a person or security is effectively registered constitutes a finding by the secretary of state that any document filed under this act is true, complete, and not misleading. Neither any such fact nor the fact that an exemption or exception is available for a security or a transaction means that the secretary of state has passed in any way upon the merits or qualifications of, or recommended or given approval to, any person, security, or transaction.

(b) It is unlawful to make, or cause to be made, to any prospective purchaser, customer, or client any representation inconsistent with subsection (a) of this section.

17-4-118. Administration of provisions; use or disclosure of information by secretary of state or employees.

(a) This act shall be administered by the secretary of state.

(b) It is unlawful for the secretary of state or any of his officers or employees to use for personal benefit any information which is filed with or obtained by the secretary of state and which is not made public. No provision of this act authorizes the secretary of state or any of his officers or employees to disclose any such information except among themselves or when necessary or appropriate in a proceeding or investigation under this act. No provision of this act either creates or derogates from any privilege which exists at common law or otherwise when documentary or other evidence is sought under a subpoena directed to the administrator or any of his officers or employees.

17-4-119. Investigations; subpoenaing witnesses; production of documents.

(a) The secretary of state in his discretion:

(i) May make such public or private investigations within or outside of this state as he deems necessary to determine whether any person has violated or is about to violate any provision of this act or any rule or order hereunder, or to aid in the enforcement of this act or in the prescribing of rules and forms hereunder;

(ii) May require or permit any person to file a statement in writing, under oath or otherwise as the secretary of state determines, as to all the facts and circumstances concerning the matter to be investigated; and

(iii) May publish information concerning any violation of this act or any rule or order hereunder.

(b) For the purpose of any investigation or proceeding under this act, the secretary of state or any officer designated by him may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the secretary of state deems relevant or material to the inquiry.

(c) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the Wyoming district court, upon application by the secretary of state, may issue to the person an order requiring him to appear before the secretary of state or the officer designated by him, there to produce documentary evidence if so ordered or to give evidence touching the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as a contempt of court.

(d) No person is excused from attending and testifying or from producing any document or record before the secretary of state, or in obedience to the subpoena of the secretary of state or any officer designated by him, or in any proceeding instituted by the secretary of state, on the ground that the testimony or evidence (documentary or otherwise) required of him may tend to incriminate him or subject him to a penalty or forfeiture; but no individual may be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled, after claiming his privilege against self-incrimination, to testify or produce evidence (documentary or otherwise), except that the individual testifying is not exempt from prosecution and punishment for perjury or contempt committed in testifying.

17-4-120. Enjoining violations.

Whenever it appears to the secretary of state that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this act or any rule or order hereunder, he may in his discretion bring an action in the Wyoming district court to enjoin the acts or practices and to enforce compliance with this act or any rule or order hereunder. Upon a proper showing a permanent or temporary injunction, restraining order, or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets. The court may not require the secretary of state to post a bond.

17-4-121. Penalties for violations.

(a) Any person who willfully violates any provision of this act except W.S. 17-4-116 or who willfully violates any rule or order under this act, or who willfully violates W.S. 17-4-116 knowing the statement made to be false or misleading in any material respect, shall upon conviction be fined not more than five thousand dollars ($5,000.00) or imprisoned not more than three (3) years, or both; but no person may be imprisoned for the violation of any rule or order if he proves that he had no knowledge of the rule or order.

(b) The secretary of state may refer such evidence as is available concerning violations of this act or of any rule or order hereunder to the attorney general who may, with or without such a reference, institute the appropriate criminal proceedings under this act.

(c) Nothing in this act limits the power of the state to punish any person for any conduct which constitutes a crime by statute or at common law.

17-4-122. Civil liability of sellers violating provisions.

(a) Any person who:

(i) Offers or sells a security in violation of W.S. 17-4-103(a), 17-4-107, or 17-4-117(b) or of any rule or order under W.S. 17-4-115 which requires the affirmative approval of sales literature before it is used, or of any condition imposed under W.S. 17-4-110(d), 17-4-111(g), or 17-4-111(h); or

(ii) Offers or sells a security by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading (the buyer not knowing of the untruth or omission), and who does not sustain the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of the untruth or omission, is liable to the person buying the security from him, who may sue either at law or in equity to recover the consideration paid for the security, together with interest at six percent (6%) per year from the date of payment, costs, and reasonable attorneys' fees, less the amount of any income received on the security, upon the tender of the security, or for damages if he no longer owns the security. Damages are the amount that would be recoverable upon a tender less the value of the security when the buyer disposed of it and interest at six percent (6%) per year from the date of disposition.

(b) Every person who directly or indirectly controls a seller liable under subsection (a) of this section, every partner, officer, or director of such a seller, every person occupying a similar status or performing similar functions, every employee of such a seller who materially aids in the sale, and every broker-dealer or agent who materially aids in the sale are also liable jointly and severally with and to the same extent as the seller, unless the nonseller who is so liable sustains the burden of proof that he did not know, and in exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist. There is contribution as in cases of contract among the several persons so liable.

(d) Every cause of action under this act survives the death of any person who might have been a plaintiff or defendant.

(e) No person may sue under this section more than two (2) years after the contract of sale. No person may sue under this section:

(i) If the buyer received a written offer, before suit and at a time when he owned the security, to refund the consideration paid together with interest at six percent (6%) per year from the date of payment, less the amount of any income received on the security, and he failed to accept the offer within thirty (30) days of its receipt; or

(ii) If the buyer received such an offer before suit and at a time when he did not own the security, unless he rejected the offer in writing within thirty (30) days of its receipt.

(f) No person who has made or engaged in the performance of any contract in violation of any provision of this act or any rule or order hereunder, or who has acquired any purported right under any such contract with knowledge of the facts by reason of which its making or performance was in violation, may base any suit on the contract.

(g) Any condition, stipulation, or provision binding any person acquiring any security to waive compliance with any provision of this act or any rule or order hereunder is void.

(h) The rights and remedies provided by this act are in addition to any other rights or remedies that may exist at law or in equity, but this act does not create any cause of action not specified in this section or W.S. 17-4-104(e).

17-4-123. Judicial review of orders of secretary of state.

(a) Any person aggrieved by a final order of the secretary of state may obtain a review of the order in the Wyoming district court by filing in court, within sixty (60) days after the entry of the order, a written petition praying that the order be modified or set aside in whole or in part. A copy of the petition shall be forthwith served upon the secretary of state, and thereupon the secretary of state shall certify and file in court a copy of the filing and evidence upon which the order was entered. When these have been filed, the court has exclusive jurisdiction to affirm, modify, enforce, or set aside the order, in whole or in part. The findings of the secretary of state as to the facts, if supported by competent, material and substantial evidence, are conclusive. If either party applies to the court for leave to adduce additional material evidence, and shows to the satisfaction of the court that there were reasonable grounds for failure to adduce the evidence in the hearing before the secretary of state, the court may order the additional evidence to be taken before the secretary of state and to be adduced upon the hearing in such manner and upon such conditions as the court considers proper. The secretary of state may modify his findings and order by reason of the additional evidence and shall file in court the additional evidence together with any modified or new findings or order. The judgment of the court is final, subject to review by the Wyoming supreme court.

(b) The commencement of proceedings under subsection (a) of this section does not, unless specifically ordered by the court, operate as a stay of the secretary of state's order.

17-4-124. Rules, forms and orders.

(a) The secretary of state may from time to time make, amend, and rescind such rules, forms and orders as are necessary to carry out the provisions of this act, including rules and forms governing registration statements, applications, and reports, and defining any terms, whether or not used in this act, insofar as the definitions are not inconsistent with the provisions of this act. For the purpose of rules and forms, the secretary of state may classify securities, persons, and matters within his jurisdiction, and prescribe different requirements for different classes.

(b) No rule, form, or order may be made, amended, or rescinded unless the secretary of state finds that the action is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of this act. In prescribing rules and forms the secretary of state may cooperate with the securities administrators of the other states and the securities and exchange commission with a view to effectuating the policy of this act to achieve maximum uniformity in the form and content of registration statements, applications, and reports wherever practicable.

(c) The secretary of state may by rule or order prescribe the form and content of financial statements required under this act, the circumstances under which consolidated financial statements shall be filed, and whether any required financial statements shall be certified by independent or certified public accountants. All financial statements shall be prepared in accordance with generally accepted accounting practices.

(d) All rules and forms of the secretary of state shall be published.

(e) No provision of this act imposing any liability applies to any act done or omitted in good faith in conformity with any rule, form, or order of the secretary of state, notwithstanding that the rule, form, or order may later be amended or rescinded or be determined by judicial or other authority to be invalid for any reason.

(f) For any violation of this chapter, the secretary of state may by order entered in accordance with this subsection impose a civil penalty, assess costs, require restitution to investors or impose other conditions upon a registered person or any registrant which the secretary of state determines to be in the public interest. In addition to any other civil or criminal penalty provided in this chapter any person, whether registered or not, who willfully violates any provision of this chapter, may be assessed civil penalties, be required to pay restitution and costs or to rescind the transaction or transactions and pay costs, if the secretary of state finds it in the public interest. An order under this subsection shall be entered in accordance with the following:

(i) For the purpose of determining the amount of any civil penalty to be imposed for a violation of any provision of the Wyoming Securities Act, the secretary of state shall consider:

(A) The circumstances, nature, frequency, seriousness, magnitude, persistence and willfulness of the conduct constituting the violation;

(B) The scope of the violation, including the number of persons affected by the conduct constituting the violations;

(D) Past and concurrent conduct of the violator that has given rise to any sanction or judgment imposed by, or plea or settlement with, the secretary of state or any state securities administrator, any court of competent jurisdiction, the Securities and Exchange Commission, any other federal or state agency or any self-regulatory organization; and

(E) Any other factor that the secretary of state finds appropriate in the public interest or for the protection of investors and within the purposes fairly intended by the policy and provisions of the Wyoming Securities Act.

(ii) A civil penalty levied under this subsection shall not exceed two hundred fifty dollars ($250.00) for each violation per person nor ten thousand dollars ($10,000.00) in a single proceeding against any one (1) person;

(iii) The secretary of state may charge, in addition to any administrative assessment, penalty, remedy or sanction imposed under this section, the actual cost of any examination or investigation made by the secretary of state pursuant to this section to the party or parties subject of the investigation or examination.

(g) Every hearing in an administrative proceeding shall be public unless the secretary of state in his discretion grants a request joined in by all the respondents that the hearing be conducted privately.

17-4-125. When document deemed filed; register of applications, statements and orders; inspection of information; copies of records; interpretative opinions.

(a) A document is filed when it is received by the secretary of state.

(b) The secretary of state may cooperate with the securities administrators of one (1) or more states, Canadian provinces or territories, or other country, the securities and exchange commission, the commodity futures trading commission, the securities investor protection corporation, any self-regulatory organization or any law enforcement or regulatory organization to establish a central depository for registration under this act and of documents or records required or allowed to be maintained under this act.

(c) The secretary of state shall keep a register of all applications for registration and registration statements which are or have ever been effective under this act and all denial, suspension, or revocation orders which have ever been entered under this act. The register shall be open for public inspection.

(d) The information contained in or filed with any registration statement, application, or report may be made available to the public under such rules as the secretary of state prescribes.

(e) Upon request and at such reasonable charges as he prescribes, the secretary of state shall furnish to any person photostatic or other copies (certified under his seal of office if requested) of any entry in the register or any document which is a matter of public record. In any proceeding or prosecution under this act, any copy so certified is prima facie evidence of the contents of the entry or document certified.

(f) The secretary of state in his discretion may honor requests from interested persons for interpretative opinions.

17-4-126. Applicability of provisions; place of offer or acceptance; service of process.

(a) W.S. 17-4-101, 17-4-103(a), 17-4-107, 17-4-132, 17-4-117 and 17-4-122 apply to persons who sell or offer to sell when:

(i) An offer to sell is made in this state; or

(ii) An offer to buy is made and accepted in this state.

(b) W.S. 17-4-101, 17-4-103(a) and 17-4-117 apply to persons who buy or offer to buy when:

(i) An offer to buy is made in this state; or

(ii) An offer to sell is made and accepted in this state.

(c) For the purpose of this section, an offer to sell or to buy is made in this state, whether or not either party is then present in this state, when the offer:

(i) Originates from this state; or

(ii) Is directed by the offeror to this state and received at the place to which it is directed (or at any post office in this state in the case of a mailed offer).

(d) For the purpose of this section, an offer to buy or to sell is accepted in this state when acceptance is communicated to the offeror in this state and has not previously been communicated to the offeror, orally or in writing, outside this state; and acceptance is communicated to the offeror in this state, whether or not either party is then present in this state, when the offeree directs it to the offeror in this state reasonably believing the offeror to be in this state and it is received at the place to which it is directed (or at any post office in this state in the case of a mailed acceptance).

(e) An offer to sell or to buy is not made in this state when:

(i) The publisher circulates or there is circulated on his behalf in this state any bona fide newspaper or other publication of general, regular, and paid circulation which is not published in this state, or which is published in this state but has had more than two-thirds of its circulation outside this state during the past twelve (12) months; or

(ii) A radio or television program originating outside this state is received in this state.

(f) W.S. 17-4-102 applies when any act instrumental in effecting prohibited conduct is done in this state, whether or not either party is then present in this state.

(g) Every applicant for registration under this act and every issuer which proposes to offer a security in this state through any person acting on an agency basis in the common-law sense shall file with the secretary of state, in such form as he by rule prescribes, an irrevocable consent appointing the secretary of state or his successor in office to be his attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against him or his successor executor or administrator which arises under this act or any rule or order hereunder after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. A person who has filed such a consent in connection with a previous registration or notice filing need not file another. Service may be made by leaving a copy of the process in the office of the secretary of state, but it is not effective unless:

(i) The plaintiff, who may be the secretary of state in a suit, action, or proceeding instituted by him, forthwith sends notice of the service and a copy of the process by registered mail to the defendant or respondent at his last address on file with the secretary of state; and

(ii) The plaintiff's affidavit of compliance with this subsection if filed in the case on or before the return day of the process, if any, or within such further time as the court allows.

(h) When any person, including any nonresident of this state, engages in conduct prohibited or made actionable by this act or any rule or order hereunder, and he has not filed a consent to service of process under subsection (g) of this section and personal jurisdiction over him cannot otherwise be obtained in this state, that conduct shall be considered equivalent to his appointment of the secretary of state or his successor in office to be his attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against him or his successor executor or administrator which grows out of that conduct and which is brought under this act or any rule or order hereunder, with the same force and validity as if served on him personally. Service may be made by leaving a copy of the process in the office of the secretary of state, and it is not effective unless:

(ii) The plaintiff's affidavit of compliance with this subsection is filed in the case on or before the return day of the process, if any, or within such further time as the court allows.

(j) When process is served under this section, the court, or the secretary of state in a proceeding before him, shall order such continuance as may be necessary to afford the defendant or respondent reasonable opportunity to defend.

17-4-127. Uniform construction of provisions.

This act shall be so construed as to effectuate its general purpose to make uniform the law of those states which enact it and to coordinate the interpretation and administration of this act with the related federal regulation.

17-4-128. Repeal of former provisions; applicability of prior law.

(a) Sections 17-102 through 17-117, Wyoming Statutes 1957, are repealed except as saved in this section.

(b) Prior law exclusively governs all suits, actions, prosecutions, or proceedings which are pending or may be initiated on the basis of facts or circumstances occurring before the effective date of this act except that no civil suit or action may be maintained to enforce any liability under prior law unless brought within any period of limitation which applied when the cause of action accrued and in any event within two (2) years after the effective date of this act.

(c) All effective registrations under prior law, all administrative orders relating to such registrations, and all conditions imposed upon such registrations remain in effect so long as they would have remained in effect if this act had not been passed. They are considered to have been filed, entered, or imposed under this act, but are governed by prior law.

(d) Prior law applies in respect of any offer or sale made within one (1) year after the effective date of this act pursuant to an offering begun in good faith before its effective date on the basis of an exemption available under prior law.

(e) Judicial review of all administrative orders as to which review proceedings have not been instituted by the effective date of this act are governed by W.S. 17-4-123, except that no review proceeding may be instituted unless the petition is filed within any period of limitation which applied to a review proceeding when the order was entered and in any event within sixty (60) days after the effective date of this act.

17-4-129. Short title.

This act may be cited as the Uniform Securities Act.

17-4-130. Clearing corporations; registration required.

(a) It is unlawful for any clearing corporation, as defined in W.S. 34.1-8-102(a)(v), other than a registered clearing agency which limits its business to those activities which are regulated by the United States Securities and Exchange Commission, to transact business in this state as a clearing corporation, including the clearance and settlement of securities, commercial paper and bank certificates of deposit unless it is a registered clearing corporation.

(b) The secretary of state may adopt reasonable rules and regulations necessary to implement this section.

(c) The director of the state department of audit or his designee shall inspect and examine each registered clearing corporation during each calendar year following W.S. 13-3-702(a) to the extent applicable. The examination shall be conducted pursuant to rules and regulations and orders as the director deems appropriate.

17-4-131. Disposition of fees.

(a) The state treasurer shall credit sixty percent (60%) of all fees collected by the secretary of state under W.S. 17-4-101 through 17-4-130 to the general fund and the balance to a separate account. Annually, on July 1, monies within the account in excess of three hundred fifty thousand dollars ($350,000.00) shall be credited to the general fund. Pooled interest on the account shall be credited to the general fund.

(b) The secretary of state may expend money within the account provided by subsection (a) of this section as appropriated by the legislature to investigate, prosecute and otherwise ensure compliance with W.S. 17-4-101 through 17-4-131 and to promote investor awareness which may include investment and antifraud publications and seminars.

(c) The secretary of state shall in a separate subprogram budget request, submit expenditure requests for purposes specified and from the account established by this section.

17-4-132. Federal covered securities.

(a) The secretary of state, by rule or order, may require the filing of any or all of the following documents with respect to a covered security under section 18(b)(2) of the Securities Act of 1933:

(i) Prior to the initial offer of such covered security in this state, all documents that are part of a federal registration statement filed with the United States Securities and Exchange Commission under the Securities Act of 1933, together with a consent to service of process signed by the issuer and with a fee of one-fiftieth of one percent (.0002%) of the total dollar offering amount to be offered in this state, but the fee shall in no case be less than two hundred dollars ($200.00) nor more than six hundred dollars ($600.00);

(ii) After the initial offer of such covered security in this state, all documents that are part of an amendment to a federal registration statement filed with the United States Securities and Exchange Commission under the Securities Act of 1933 which shall be filed concurrently with the secretary of state;

(iii) A report of the value of such covered securities offered or sold in this state if the secretary of state by rule or order requires.

(b) With respect to any security that is a covered security under section 18(b)(4)(D) of the Securities Act of 1933, the secretary of state, by rule or order, may require the issuer to file a notice on SEC Form D and a consent to service of process signed by the issuer no later than fifteen (15) days after the first sale of such covered security in this state, together with a filing fee as set by rule.

(c) The secretary of state, by rule or order, may require the filing of any document filed with the United States Securities and Exchange Commission under the Securities Act of 1933 with respect to a covered security under section 18(b)(3) or (4) of the Securities Act of 1933.

(d) The secretary of state may issue a stop order suspending the offer and sale of a covered security, except a covered security under section 18(b)(1) of the Securities Act of 1933, if it finds that:

(i) The order is in the public interest; and

(ii) There is a failure to comply with any condition established under this section.

(e) The secretary of state, by rule or order, may waive any or all of the provisions of this section.

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2010 Wyoming Statutes Title 17 - Corporations, Partnerships And Associations Chapter 4 - Securities

2010 Wyoming Statutes
Title 17 - Corporations, Partnerships And Associations
Chapter 4 - Securities