Series 63: Reasons For Issuing A Stop Order

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