Connecticut General Statutes
Chapter 672a - Uniform Securities Act
Section 36b-20. (Formerly Sec. 36-489). - Stop order. When issued by commissioner. Registration statement deemed abandoned, when.

(a) The commissioner may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any registration statement if he finds (1) that the order is in the public interest and (2) that: (A) The registration statement as of its effective date or as of any earlier date in the case of an order denying effectiveness, or any report under subsection (j) of section 36b-19, is incomplete in any material respect but is not abandoned pursuant to subsection (e) of this section or contains any statement which was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact; (B) any provision of sections 36b-2 to 36b-34, inclusive, or any regulation, order or condition lawfully imposed under said sections has been wilfully violated, in connection with the offering, by (i) the person filing the registration statement, (ii) 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, provided the person filing the registration statement is directly or indirectly controlled by or acting for the issuer, or (iii) any underwriter; (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 act applicable to the offering; except the commissioner (i) may not institute a proceeding against an effective registration statement under this subparagraph more than one year from the date of the order or injunction relied on, and (ii) may not enter an order under this subparagraph on the basis of an order or injunction entered under any other state act unless that order or injunction was based on facts which would currently constitute a ground for a stop order under this section; (D) the issuer's enterprise or method of business includes or would include activities which are illegal where performed; (E) the offering has worked or tended to work a fraud upon purchasers or would so operate; (F) the offering has been or would be made with unreasonable amounts of underwriters' and sellers' discounts, commissions or other compensation, or promoters' profits or participation, or unreasonable amounts or kinds of options; (G) when a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by subdivision (4) of subsection (b) of section 36b-17; (H) the applicant or registrant has failed to pay the proper filing fee; but the commissioner may enter only a denial order under this clause and he shall vacate any such order when the deficiency has been corrected; or (I) the issuer is a blank check company. The commissioner may not institute a stop order proceeding against an effective registration statement on the basis of a fact or transaction known to him when the registration statement became effective unless the proceeding is instituted within one hundred eighty days of the effective date of such registration statement.

(b) The commissioner may by order summarily postpone or suspend the effectiveness of the registration statement pending final determination of any proceeding under this section. Upon the entry of the order, the commissioner shall promptly notify each person specified in subsection (c) of this section that it has been entered and of the reasons therefor and that within fifteen days after the receipt of a written request the matter will be set down for hearing. If no hearing is requested and none is ordered by the commissioner, the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested, the commissioner may modify or vacate the order or extend it until final determination.
(c) No stop order may be entered under this section except as provided in subsection (b) of this section without: (1) Appropriate prior notice to the applicant or registrant, the issuer and the person on whose behalf the securities are to be or have been offered; (2) opportunity for hearing; and (3) written findings of fact and conclusions of law.
(d) The commissioner may vacate or modify a stop order if he finds that the conditions which prompted its entry have changed or that it is otherwise in the public interest to do so.
(e) The commissioner may deem any registration statement to be abandoned if the person filing the registration statement fails to respond to any request for information required under this chapter or any regulation or order under this chapter. The commissioner shall notify the person filing the registration statement, the issuer and the person on whose behalf the securities are to be or have been offered, in writing, that if such information is not submitted within sixty days of such written notification, the registration statement shall be deemed abandoned. Any filing fee paid prior to the date the registration statement is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of the registration statement pursuant to this subsection shall not preclude the person filing the registration statement from submitting a new registration statement under sections 36b-17 or 36b-18. The hearing requirement in subsection (c) of this section shall not apply to abandonment pursuant to this subsection.
(P.A. 77-482, S. 20; P.A. 78-34, S. 15, 17; P.A. 82-149, S. 11, 16; P.A. 93-157, S. 2, 4; P.A. 97-220, S. 10, 15; P.A. 98-162, S. 5; P.A. 10-141, S. 14.)
History: P.A. 78-34 replaced reference to Sec. 36-487 with reference to Sec. 36-488 in Subsec. (a); P.A. 82-149 amended Subsec. (a)(2)(A) by replacing “amendment” with “renewal registration”; P.A. 93-157 added Subsec. (a)(2)(I) by adding re commissioner's discretion in issuing a stop order when the issuer of a registration is a blank check company and changed from 30 days to 180 days the time period in which the commissioner may not institute a stop order proceeding against an effective registration statement, effective July 1, 1993; Sec. 36-489 transferred to Sec. 36b-20 in 1995; P.A. 97-220 amended Subsec. (a) by deleting reference to renewal registration under Sec. 36b-19(k), effective July 1, 1997; P.A. 98-162 amended Subsec. (a) by adding reference to abandonment pursuant to Subsec. (e), and added new Subsec. (e) re abandoned registration statements; P.A. 10-141 amended Subsec. (a) by replacing reference to Sec. 36b-33 with reference to Sec. 36b-34, effective June 7, 2010.

Structure Connecticut General Statutes