§ 359-FF — Registration of intra-state offerings

New York § 359-FF

• Jurisdiction: New York
• Law GBS: General Business
• Art. 23-A: Fraudulent Practices In Respect to Stocks, Bonds and Other Securities

Text

§ 359-ff. Registration of intra-state offerings. 1. It is unlawful for\nany person, directly or indirectly, to offer or sell any security which\nis part of an issue offered and sold only to persons resident within\nthis state unless an offering prospectus which makes full and fair\ndisclosure of all material facts is first filed by the issuer of such\nsecurity with the department of law. Such offering prospectus shall\ninclude, without limitation, a description of the securities offered and\nterms of the offering, the nature of the issuer's business, the purpose\nof the offering and the application of the proceeds thereof by the\nissuer, background of management, and pending material litigation. Such\noffering prospectus shall also include (i) the issuer's profit and loss\nstatements for its three fiscal years (or such lesser number of fiscal\nyears during which the issuer has been in existence) immediately\npreceding the date of filing, (ii) if such latest fiscal year ended more\nthan one hundred twenty days prior to the date of filing, a profit and\nloss statement for a period from the end of such latest fiscal year to a\ndate within one hundred twenty days prior to the date of filing, and\n(iii) the issuer's balance sheet as of the end of the last such fiscal\nyear and as of the end of such additional period, if any, for which a\nprofit and loss statement has been filed, all of which profit and loss\nstatements and balance sheets shall be prepared in accordance with\ngenerally accepted accounting principles. Such offering prospectus shall\nbe lawful for use in connection with the offer and sale of such\nsecurities from and after the fifteenth day following such filing unless\nprior thereto the attorney general shall notify the person making such\nfiling by letter indicating the respects in which the offering\nprospectus fails to make adequate disclosure. No offer or sale of any\nsuch security shall be made by any person unless prior to or at the time\nthereof there shall have been delivered to the purchaser an offering\nprospectus lawful for use under the provisions of this section.\n 2. The attorney general is hereby authorized and empowered to adopt\nsuitable rules and regulations to carry out the provisions of this\nsection, including regulations applicable to the method, contents and\nfiling procedures with respect to the prospectus required by subdivision\none and the making of amendments thereto, and the use of advertising\nmaterial.\n The attorney general is also hereby authorized and empowered to adopt\nsuitable rules and regulations requiring the issuer of any security sold\npursuant to an offering prospectus under this section to maintain\naccurate books and records of account and to furnish to investors and to\nthe department of law annual reports containing financial statements\nprepared in accordance with generally accepted accounting principles;\nprovided, however, that no such rules and regulations shall apply to any\nissuer required to file reports pursuant to section 13 or 15 of the\nsecurities exchange act of 1934, as amended.\n 3. The attorney general is hereby authorized and empowered to exempt\nby rule, regulation or order any person, security or transaction or any\nclass or classes of persons, securities or transactions from any\nprovision of this section or of any rule or regulation thereunder if the\nattorney general finds that such action is not inconsistent with the\npublic interest or the protection of investors.\n 4. A "person" shall mean an individual person, firm, corporation,\npartnership, limited partnership, trust, syndicate or association, but\nshall not include a bank as defined in this article.\n 5. This section shall not be applicable to offerings or sales of\nsecurities (a) with respect to which offerings a registration statement\nhas been filed, and with respect to which sales a registration statement\nhas become effective, with the United States securities and exchange\ncommission pursuant to the securities act of 1933, as amended; (b) with\nrespect to which a registration statement is not required to be filed\nunder said act or the rules and regulations thereunder for reasons other\nthan the exemption contained in section 3 (a) (11) of said act; (c) of\nan issuer any class of whose securities are registered under the\nsecurities exchange act of 1934, as amended; (d) subject to the\nprovisions of section three hundred fifty-two-e or article twenty-six-A\nof the general business law; (e) described in section three hundred\nfifty-nine-f, subdivision l, paragraphs (d), (l) and (m) of the general\nbusiness law; or (f) which constitutes an insurance or endowment policy\nor annuity contract or interest or participation therein, whether\npayable in fixed or variable dollar amounts or both, issued by an\ninstitution subject to the supervision of the superintendent of\nfinancial services of this state.\n 6. A non-returnable fee of one-half of one percent of the maximum\naggregate offering price at which the total of all securities to be\noffered pursuant to an offering prospectus filed under subdivision one\nhereof shall be payable to the department of law at the time of each\nfiling, but the fee shall in no case be less than twenty-five dollars or\nmore than fifteen hundred dollars.\n 7. The provisions of the following sections of this article\ntwenty-three-A shall be fully applicable to intrastate offerings\ndescribed in subdivision one of this section; section three hundred\nfifty-two; section three hundred fifty-two-b; section three hundred\nfifty-two-c; section three hundred fifty-two-d; sections three hundred\nfifty-four through three hundred fifty-nine-b; section three hundred\nfifty-nine-e; subdivision two of section three hundred fifty-nine-f and\nsections three hundred fifty-nine-g and three hundred fifty-nine-h.\n