State Codes and Statutes
Statutes > Utah > Title-61 > Chapter-01 > 61-1-1261-1-12. Denial, suspension, and revocation of registration.
(1) Upon approval by a majority of the commission, the director, by means of anadjudicative proceeding conducted in accordance with Title 63G, Chapter 4, AdministrativeProcedures Act, may issue a stop order that denies effectiveness to, or suspends or revokes theeffectiveness of, any securities registration statement and may impose a fine if the director findsthat 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 caseof an order denying effectiveness, or an amendment under Subsection 61-1-11(10) as of itseffective date, or a report under Subsection 61-1-11(9), is incomplete in a material respect, orcontains a statement that was, in the light of the circumstances under which it was made, false ormisleading with respect to a material fact;
(b) this chapter, or a rule, order, or condition lawfully imposed under this chapter, iswillfully violated, in connection with the offering, by:
(i) the person filing the registration statement;
(ii) the issuer, a partner, officer, or director of the issuer, a person occupying a similarstatus or performing similar functions, or a person directly or indirectly controlling or controlledby the issuer, but only if the person filing the registration statement is directly or indirectlycontrolled by or acting for the issuer; or
(iii) an underwriter;
(c) subject to Subsection (5), the security registered or sought to be registered is thesubject of an administrative stop order or similar order, or a permanent or temporary injunctionof a court of competent jurisdiction entered under another federal or state act applicable to theoffering;
(d) the issuer's enterprise or method of business includes or would include activities thatare illegal where performed;
(e) the offering has worked or tended to work a fraud upon purchasers or would sooperate;
(f) the offering is or would be made with unreasonable amounts of underwriters' andsellers' discounts, commissions, or other compensation, or promoters' profits or participation, orunreasonable amounts or kinds of options;
(g) when a security is sought to be registered by coordination, there is a failure to complywith the undertaking required by Subsection 61-1-9(2)(d); or
(h) the applicant or registrant has failed to pay the proper filing fee.
(2) The director may enter an order under this section but may vacate the order if thedirector finds that the conditions that prompted its entry have changed or that it is otherwise inthe public interest to do so.
(3) The director may not issue a stop order against an effective registration statement onthe basis of a fact or transaction known to the division when the registration statement becameeffective unless the proceeding is instituted within the 120 days after the day on which theregistration statement becomes effective.
(4) A person may not be considered to have violated Section 61-1-7 or 61-1-15 by reasonof an order or sale effected after the entry of an order under this section if that person proves by apreponderance of the evidence that the person did not know, and in the exercise of reasonablecare could not have known, of the order.
(5) (a) The director may not commence agency action against an effective registration
statement under Subsection (1)(c) more than one year from the day on which the order orinjunction on which the director relies is issued.
(b) The director may not enter an order under Subsection (1)(c) on the basis of an orderor injunction entered under the securities act of another state unless that order or injunction isissued on the basis of facts that would constitute a ground for a stop order under this section atthe time the director commences the agency action.
Amended by Chapter 351, 2009 General Session
