441-035-0210 - Bad Actor Disqualification

441-035-0210. Bad Actor Disqualification

(1) The OIO exemption is not available if, within five years prior to the offering, any of the following apply:

(a) An issuer or person affiliated with the issuer has filed a registration statement which is the subject of any pending proceeding or examination under section 8 of the Securities Act of 1933 or has been the subject of any refusal order or stop order thereunder.

(b) An issuer or person affiliated with the issuer is subject to any pending proceeding under SEC rule 258 promulgated under the Securities Act of 1933, or any similar section adopted under section 3(b) of the Securities Act of 1933, or to an order entered thereunder.

(c) An issuer or person affiliated with the issuer has been convicted of any felony or misdemeanor involving the offer, purchase, or sale of any security, or involving the making of any false filing related to the offer or sale of any security, or any felony or misdemeanor involving dishonesty.

(d) An issuer or a person affiliated with the issuer is, or has been, subject to a state administrative order or judgment containing findings that the issuer or person affiliated with the issuer engaged in fraud or deceit, including but not limited to, making untrue statements of material facts and omitting to state material facts, in connection with the purchase or sale of securities.

(e) An issuer or person affiliated with the issuer has ever been subject to any order, judgment, or decree of any court of competent jurisdiction or regulatory authority (including non-U.S. regulatory authorities) preliminarily, temporarily, or permanently restraining or enjoining such person from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security or involving the making of any false filing related to the offer or sale of any security.

(f) An issuer or a person affiliated with the issuer is the subject of a cease and desist order entered after notice and opportunity for hearing by the Director, a securities agency or administrator of another state or Canadian province or territory, the United States Securities and Exchange Commission or the United States Commodity Futures Trading Commission that contains allegations of securities fraud or misrepresentations in connection with investment offerings.

(g) An issuer or a person affiliated with the issuer has been barred from using any exemption under the Oregon Securities Law pursuant to an order of the Director.

(2) The disqualification under this rule may not apply if:

(a) The Director determines that it is not necessary under the circumstances that an exemption be unavailable; and

(b) The issuer establishes that they did not know, and in the exercise of reasonable care could not have known, that a disqualification existed under this rule.

(FCS 1-2015, f. & cert. ef. 1-15-15; FSR 12-2017, amend filed 12/28/2017, effective 1/1/2018)

Statutory/Other Authority: 17 CFR ยง 230.147A & ORS 59.035

Statutes/Other Implemented: ORS 59.035

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