Tennessee § 48-1-108 - Stop order denying, suspending, or revoking registration.

§ 48-1-108. Stop order denying, suspending, or revoking registration.

The commissioner may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any registration statement if the commissioner finds that: The order is in the public interest; and The registration statement, or any amendment under § 48-1-107 (as of its effective date or as of the date of an order denying effectiveness), or any report under § 48-1-107(h) includes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; Any provision of this part or any rule, order or condition lawfully imposed under this part has been willfully violated in connection with the offering by: The person filing the registration statement; 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, controlled by, or under common control with the issuer, but only if the person filing the registration statement is directly or indirectly controlled by or acting for the issuer; or Any underwriter; 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; provided, that the commissioner may not: Institute a proceeding against an effective registration statement under this subdivision (a)(2)(C) more than one (1) year from the date of the order or injunction relied on; or Enter an order under this subdivision (a)(2)(C) 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; The issuer's enterprise or method of business includes or would include activities which are illegal where performed; The offering has worked or tended to work a fraud upon purchasers or would so operate; When a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by § 48-1-105(b)(4); or The applicant or registrant has failed to pay the proper filing fee; provided, that the commissioner may enter only a denial order under this subdivision (a)(2)(G) and the commissioner shall vacate any such order when the deficiency has been corrected. No order may be entered under any part of this section without full compliance with § 48-1-116. Upon issuance of an order under this section, the commissioner shall give notice of the issuance of such order and of the reasons therefor and opportunity for hearing by personal service or by certified mail, return receipt requested, to the addressee's last known business mailing address. The commissioner shall vacate or modify the order at any time for good cause or if such registration statement or prospectus has been filed or amended in accordance with such order. The commissioner may not institute a stop order proceeding against an effective registration statement on the basis of a fact or transaction known to the commissioner when the registration statement became effective, unless the proceeding is instituted within the thirty (30) days immediately following the date the registration statement became effective. In any case in which the commissioner is authorized to issue a stop order denying, suspending or revoking the effective registration of the securities of an issuer, the commissioner may impose a fine of five thousand dollars ($5,000) upon the issuer of such securities for all violations arising from any single transaction. Acts 1980, ch. 866, § 8; T.C.A., § 48-16-108 ; Acts 1996, ch. 1072, §§ 6, 8; T.C.A., § 48-2-108 ; Acts 2017, ch. 424, § 23. Code Commission Notes. Former § 48-2-108 was transferred to § 48-1-108 by the code commission in 2012. Compiler's Notes. The Securities Law of 1955, formerly codified as §§ 48-1601 — 48-1653, was repealed by Acts 1980, ch. 886, § 27. However, the section also contained a savings provision referring to former §§ 48-1601 — 48-1653 which read: “(b) Prior law exclusively governs all suits, actions, prosecutions, or proceedings which are pending or may be initiated on the basis of facts or circumstances occurring before the effective date of this Act, except that no civil suit or action may be maintained to enforce any liability under prior law unless brought within any period of limitation which applied when the cause of action accrued and in any event within two years after the effective date of this Act. “(c) All effective registrations under prior law, all administrative orders relating to such registrations, and all conditions imposed upon such registrations remain in effect so long as they would have remained in effect if this Act had not been passed. They are considered to have been filed, entered, or imposed under this Act, but are governed by prior law. “(d) Prior law applies in respect of any sale made within one year after the effective date of this Act pursuant to an offering exempt under prior law which offering was begun in good faith before such effective date. “(e) Judicial review of all administrative orders as to which review proceedings have not been instituted by the effective date of this Act are governed by Section 20, except that no review proceeding may be instituted unless the petition is filed within any period of limitation which applied to a review proceeding when the order was entered and in any event within 60 days after the effective date of this Act.” The effective date of the Act was July 2, 1980. Acts 2001, ch. 61, § 1 provided that the act shall be cited as “The Securities Omnibus Act of 2001.” Law Reviews. SEC Injunctions, 68 Tenn. L. Rev. 427 (2001).