§ 11-51-306 — Denial, suspension, or revocation of registration

Colorado § 11-51-306

• Jurisdiction: Colorado
• Title 11: Financial
• Art.: Securities

Text

(1) The
securities commissioner may issue a stop order denying effectiveness to, or
suspending or revoking the effectiveness of, any registration statement, if the
securities commissioner finds violations of the escrow provisions in section 11-51-302 (5) or (6), or, in the case of any registration statement under section 11-51-304,
if the securities commissioner finds that the order is in the public interest and that
any one of the following grounds exists:

(a) The registration statement as of its effective date or as of any earlier
date in the case of an order denying effectiveness, any amendment under section
11-51-302 (9) as of its effective date, or any report under section 11-51-302 (8)
contains any false or misleading statement in violation of section 11-51-502;

(b) Any provision of this article or any rule, order, or condition imposed under
this article has been violated, in connection with the offering, by 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. Notwithstanding any other provision of this article, the
securities commissioner shall not issue any stop order denying effectiveness to, or
suspending or revoking the effectiveness of, any registration statement on the
grounds that the offering, when viewed on its merits as an investment, is unfair,
unjust, or inequitable.

(c) 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 law
applicable to the offering; but the securities commissioner may not institute a
proceeding against an effective registration statement under this paragraph (c)
more than one year from the date of the order or injunction relied on, and the
securities commissioner may not enter an order under this paragraph (c) on the
basis of an order or injunction entered under any other state law unless that order
or injunction was based on facts which would currently constitute a ground for a
stop order under this section; or

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

(1.5) With respect to a security sought to be registered pursuant to section
11-51-303, the securities commissioner may issue a stop order denying
effectiveness to, or suspending or revoking the effectiveness of, any registration
statement if the securities commissioner finds that there has been a failure to
comply with section 11-51-303 (2).

(2) The securities commissioner may, by summary order under section 11-51-606 (3)(a), summarily postpone or suspend the effectiveness of a registration
statement pending final determination of any proceeding under this section.

(3) No stop order may be entered under this section, except under
subsection (2) of this section, without the provision to the issuer of an appropriate
prior notice, an opportunity for a hearing, and written findings of fact and
conclusions of law.

(4) The securities commissioner may vacate or modify a stop order if the
securities commissioner finds that the conditions which prompted its entry have
changed or that it is otherwise in the public interest to do so.

Legislative History

Source: L. 90: Entire article R&RE, p. 714, � 1, effective July 1. L. 94: (2) amended, p. 1839, � 2, effective July 1. L. 2004: (1.5) added, p. 514, � 2, effective July 1.