Kentucky Statutes 292.390 – Denial, suspension, and revocation of registration
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(1) The commissioner may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any registration statement if he finds that the order is in the public interest and that:
(a) The registration statement as of its effective date or as of any earlier date in the case of an order denying effectiveness, or any amendment under KRS
292.380(5) as of its effective date, is incomplete in any material respect or contains any statement which was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact;
(b) Any provision of this chapter or any rule, order, or condition lawfully imposed under this chapter has been willfully violated, in connection with the offering by:
1. The person filing the registration statement;
2. The issuer, any partner, officer, or director of the issuer, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling or controlled by the issuer, but only if the person filing the registration statement is directly or indirectly controlled by or acting for the issuer; or
3. Any underwriter;
(c) The security registered or sought to be registered is the subject of an administrative stop order or a similar order or a permanent or temporary injunction of any court of competent jurisdiction entered under any other federal or state act applicable to the offering; but:
1. The commissioner may not institute a proceeding against an effective registration statement under this paragraph more than one (1) year from the date of the order or injunction relied on; and
2. He may not enter an order under this paragraph on the basis of an injunction entered under any other state act unless that order or injunction was based on facts which would currently constitute a ground for a stop order under this section;
(d) The issuer’s enterprise or method of business includes or would include activities which are illegal where performed;
(e) The offering has worked or tended to work a fraud upon purchasers or would so operate;
(f) The offering has been, or would be, made with unreasonable amounts of underwriters’ and sellers’ discounts, commissions, or other compensations, or promoters’ profits or participation, or unreasonable amounts or kinds of options;
(g) When a security is sought to be registered by notification it is not eligible for such registration;
(h) When a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by KRS § 292.360(2)(g);
(i) The applicant or registrant has failed to pay the proper registration fee; but the commissioner may enter only a denial order under this paragraph and he shall vacate any such order when the deficiency has been corrected;
(j) Commissions, compensation, and selling and other transaction expenses greater than twenty percent (20%) in the aggregate, or such other amount specified in the guidelines adopted by the North American Securities Administrators Association, would be paid directly or indirectly, in consideration for the sale of securities sought to be registered.
(2) The commissioner may not enter a stop order against an effective registration statement on the basis of a fact or transaction known to him when the registration statement became effective unless the proceeding is instituted within the next thirty (30) days.
(3) The commissioner may by order summarily postpone or suspend the effectiveness of the registration statement pending final determination of any proceeding under this section. Upon the entry of a stop order under any part of this section, the commissioner shall promptly notify the issuer of the securities, the applicant or registrant, and the person on whose behalf the securities are to be or have been offered that the order has been entered and of the reasons therefor and that within fifteen (15) days after the receipt of a written request the matter will be set down for hearing. If no hearing is requested within fifteen (15) days and none is ordered by the commissioner, the commissioner shall enter his written findings of fact and conclusions of law and the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of and opportunity for hearing to the issuer and to the applicant or registrant, shall enter his written finding of fact and conclusions of law and may modify or vacate the order. The commissioner may modify or vacate a stop order if he finds that the conditions which prompted its entry have changed or that it is otherwise in the public interest to do so.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 867, effective July 15, 2010. — Amended
1998 Ky. Acts ch. 20, sec. 10, effective July 15, 1998. — Amended 1994 Ky. Acts ch.
165, sec. 10, effective July 15, 1994. — Amended 1972 Ky. Acts ch. 265, sec. 9. — Amended 1966 Ky. Acts ch. 51, sec. 1. — Created 1960 Ky. Acts ch. 110, sec. 8, effective January 1, 1961.
(a) The registration statement as of its effective date or as of any earlier date in the case of an order denying effectiveness, or any amendment under KRS
Terms Used In Kentucky Statutes 292.390
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Federal: refers to the United States. See Kentucky Statutes 446.010
- Fraud: Intentional deception resulting in injury to another.
- Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
- 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, and except that with respect to fractional undivided interests in oil, gas, or other mineral rights, the term "issuer" means the owner of any such right or of an interest in such right, whether whole or fractional, who creates fractional interests therein for the purpose of distribution. See Kentucky Statutes 292.310
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: means an individual, a limited liability company, a corporation, a partnership, a limited 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 a political subdivision of a government. See Kentucky Statutes 292.310
- 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, life settlement investment, voting-trust certificate, certificate of deposit for a security. See Kentucky Statutes 292.310
- State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Year: means calendar year. See Kentucky Statutes 446.010
292.380(5) as of its effective date, is incomplete in any material respect or contains any statement which was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact;
(b) Any provision of this chapter or any rule, order, or condition lawfully imposed under this chapter has been willfully violated, in connection with the offering by:
1. The person filing the registration statement;
2. The issuer, any partner, officer, or director of the issuer, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling or controlled by the issuer, but only if the person filing the registration statement is directly or indirectly controlled by or acting for the issuer; or
3. Any underwriter;
(c) The security registered or sought to be registered is the subject of an administrative stop order or a similar order or a permanent or temporary injunction of any court of competent jurisdiction entered under any other federal or state act applicable to the offering; but:
1. The commissioner may not institute a proceeding against an effective registration statement under this paragraph more than one (1) year from the date of the order or injunction relied on; and
2. He may not enter an order under this paragraph on the basis of an injunction entered under any other state act unless that order or injunction was based on facts which would currently constitute a ground for a stop order under this section;
(d) The issuer’s enterprise or method of business includes or would include activities which are illegal where performed;
(e) The offering has worked or tended to work a fraud upon purchasers or would so operate;
(f) The offering has been, or would be, made with unreasonable amounts of underwriters’ and sellers’ discounts, commissions, or other compensations, or promoters’ profits or participation, or unreasonable amounts or kinds of options;
(g) When a security is sought to be registered by notification it is not eligible for such registration;
(h) When a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by KRS § 292.360(2)(g);
(i) The applicant or registrant has failed to pay the proper registration fee; but the commissioner may enter only a denial order under this paragraph and he shall vacate any such order when the deficiency has been corrected;
(j) Commissions, compensation, and selling and other transaction expenses greater than twenty percent (20%) in the aggregate, or such other amount specified in the guidelines adopted by the North American Securities Administrators Association, would be paid directly or indirectly, in consideration for the sale of securities sought to be registered.
(2) The commissioner may not enter a stop order against an effective registration statement on the basis of a fact or transaction known to him when the registration statement became effective unless the proceeding is instituted within the next thirty (30) days.
(3) The commissioner may by order summarily postpone or suspend the effectiveness of the registration statement pending final determination of any proceeding under this section. Upon the entry of a stop order under any part of this section, the commissioner shall promptly notify the issuer of the securities, the applicant or registrant, and the person on whose behalf the securities are to be or have been offered that the order has been entered and of the reasons therefor and that within fifteen (15) days after the receipt of a written request the matter will be set down for hearing. If no hearing is requested within fifteen (15) days and none is ordered by the commissioner, the commissioner shall enter his written findings of fact and conclusions of law and the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of and opportunity for hearing to the issuer and to the applicant or registrant, shall enter his written finding of fact and conclusions of law and may modify or vacate the order. The commissioner may modify or vacate a stop order if he finds that the conditions which prompted its entry have changed or that it is otherwise in the public interest to do so.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 867, effective July 15, 2010. — Amended
1998 Ky. Acts ch. 20, sec. 10, effective July 15, 1998. — Amended 1994 Ky. Acts ch.
165, sec. 10, effective July 15, 1994. — Amended 1972 Ky. Acts ch. 265, sec. 9. — Amended 1966 Ky. Acts ch. 51, sec. 1. — Created 1960 Ky. Acts ch. 110, sec. 8, effective January 1, 1961.