Unit 12 Flashcards
(43 cards)
Sale
Any security given or delivered with, or as a bonus on account of, any purchase of securities or any other thing
Offer to sell
Attempt to sell (Solicitation)
Assessable stock
A type of stock issue sold to investors at a discount in exchange for the right to come back for more money at a later date
Exclusions from sale
- Bona fide pledge/loan
- Gift of nonassessable stock
- Stock dividend
- Class vote by stockholders, act incident to a judicially approved reorganization with which a security is issued in exchange for one or more outstanding securities, claims, or property interest, or partly in such exchange and partly for cash
Jurisdiction
The legal authority to regulate securities activities that take place in the state
3 circumstances where Administrator doesn’t have jursidiction
- Television or radio broadcast that originated outside of the state
- Bona fide newspaper or periodical published outside of the state
- Newspaper or periodical published inside the state but with more than two-thirds (66%) of its circulation outside the state in the last year
What is a bona fide newspaper?
Example: New York Times
4 broad powers of Administrator
- make, amend, or rescind rules and orders 2. conduct investigations/issue subpoenas
- Issue cease and desist orders
- Deny, suspend, cancel, revoke registrations/ licenses.
What rule applies to
Everyone
What order applies to
Specific instances
Contumacy
Stubborn refusal to obey or comply with authority, especially a court order or summons
Who cease and desist orders are directed to
Individuals
Definition of enjoined
Legal term that is used to refer to a person who is the subject of an injunction.
Two actions Administrator can take if a person is violating acts or rules
- Issue cease and desist
- Issue injunction to enforce order being violated
Definition of acting summarily
Order, without having to go through the hearing process, a postponement or suspension of a registration
When must an applicant submit a written request for a hearing after being ordered
Within 15 days
Definition of final order
When the Administrator (or a court) renders a judgment in an action
If a person commits a misdemeanor, then moves to a state where that act is a felony, and applies to be a representative, what record does the Administrator look at?
The originally recorded misdemeanor
3 things that must happen before registration is denied, suspended, or revoked
- Appropriate prior notice to the applicant or registrant and their employer
- Opportunity for hearing
- Written findings of fact and conclusions of law
When an Administrator may deny, revoke, suspend a security registrant
- Files a misleading or incomplete registration statement;
- Is engaged in an offering that is fraudulent or made on unfair, unjust, or inequitable terms
- Charges offering fees that are excessive or unreasonable
- Has a control person convicted of a securities-related crime
- Is subject to a court injunction;
- Is engaged in a method of business that is illegal
- Is subject to an administrative stop order of any other state
Vacated
Term used to describe lifting of stop order
Who stop orders are directed to
Issuers
When withdrawal is effective after person requests on their own initiative
30 days after Administrator receives it
How long administrator retains jurisdiction after effective date of withdrawal takes place
One year
