Reasons for Issuing a Stop Order
In order for a state securities administrator to issue a stop order, the order must be in the public interest, and one of the following conditions must be true:
- • The registration is materially incomplete, false, or misleading.
- • Any of the following persons have willfully violated state securities law:
- » The filer of the registration statement
- » The issuer or any officer, director, or partner of the issuer
- » Any underwriter
- • Another state or federal regulator or court entered a stop order or injunction against the security within the past year.
- • The issuer’s business includes illegal activities.
- • The offering is fraudulent.
- • The offering involves unreasonable amounts of commissions and other compensation, or unreasonable amounts or kinds of options.
- • A security applies for registration by notification but is not eligible.
- • A security applies for registration by coordination, but it does not forward amendments to the federal pro