441-065-0130 - Bad Actor Disqualification

441-065-0130. Bad Actor Disqualification

(1) Subject to (3) of this rule the Director may deny an application to register a SOAR or SCOR Offering if the applicant or affiliated parties are disqualified for the following reasons:

(a) Federal Disqualification. Applicant is disqualified under Securities Act Regulation A (17 CFR 230.251 et seq.) or Regulation D (17 CFR 230.504 or 17 CFR 230.506) ; or

(b) Oregon Disqualification. Any of the parties of interest:

(A) Filed a registration statement that is the subject of an effective stop order entered by any state, territory of the United States, or the District of Columbia within five years prior to the submission of the application;

(B) Was convicted within five years of the submission of:

(i) Any felony or misdemeanor in connection with the offer, purchase or sale of any security or involving the making of a false filing with a state, territory of the United States, or the District of Columbia; or

(ii) Any felony involving fraud or deceit including but not limited to forgery, embezzlement, obtaining money under false pretenses, larceny or conspiracy to defraud.

(C) Is subject to an administrative order or injunction issued by any state, territory of the United States, or the District of Columbia within five years prior to the submission of the application in which 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, offer, or sale of securities, was found; or

(D) Is subject to any order, judgment or decree of any court of competent jurisdiction in any state, territory of the United States, or the District of Columbia entered within five years of the submission of the application that restrains or enjoins the party of interest from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security or the making of any false filing with that jurisdiction.

(2) Section (1)(b) of this rule shall not apply if the party of interest subject to the disqualification is a broker-dealer, salesperson, investment advisor, or investment advisor representative that is duly licensed to conduct business in the jurisdiction in which the disqualifying event was entered, or if the broker-dealer employing such person of interest is licensed in Oregon and the Uniform Application for Broker-Dealer Registration on SEC Form BD filed with Oregon discloses the order, conviction, judgment, or decree.

(3) Notwithstanding the requirements of subsection (1)(b) of this rule, the Director may approve the application if the Director finds that the public is adequately protected and:

(a) The applicant provides sufficient facts allowing the Director to determine the public is adequately protected; or

(b) The jurisdiction that issued the order, judgement, or decree states that the person of interest or applicant should not be subject to disqualification.

(CC 9-1982(Temp), f. 4-7-82, ef. 4-15-82; CC 11-1982, f. 8-11-82, ef. 10-10-82; FCS 11-1988(Temp), f. & cert. ef. 6-2-88; Renumbered from 815-036-0035; FCS 15-1988, f. & ef. 11-21-88; FCS 4-1992, f. & cert. ef. 10-1-92; FCS 2-1998, f. & cert. ef. 4-30-98; FCS 4-1998, f. & cert. ef. 8-5-98; FSR 5-2018, amend filed 04/26/2018, effective 5/1/2018)

Publications: The publication(s) referred to or incorporated by reference in this rule are available from the agency.

Statutory/Other Authority: ORS 59.285

Statutes/Other Implemented: ORS 59.285 & 59.065

The following state regulations pages link to this page.