Idaho State Statutes - Idaho Attorney Directory

(a) Stop orders. The administrator may issue a stop order denying
effectiveness to, or suspending or revoking the effectiveness of, a
registration statement if the administrator finds that the order is in the
public interest and that:
(1) Any of the following is incomplete in a material respect or contains
a statement that, in the light of the circumstances under which it was
made, was false or misleading with respect to a material fact:
(A) The registration statement as of its effective date, or before
the effective date in the case of an order denying effectiveness;
(B) A posteffective amendment under section 30-14-305(j), Idaho
Code, as of its effective date; or
(C) A periodic report under section 30-14-305(i), Idaho Code;
(2) This chapter or a rule adopted or an order issued under this chapter,
or a condition imposed under this chapter, has been willfully violated in
connection with the offering, by: the person filing the registration
statement; the issuer, a partner, officer or director of the issuer or a
person having a similar status or performing a similar function; a
promoter of the issuer; or a person directly or indirectly controlling or
controlled by the issuer; but only if the person filing the registration
statement is directly or indirectly controlled by or acting for the
issuer; or by an underwriter;
(3) The security registered or sought to be registered is the subject of
a permanent or temporary injunction of a court of competent jurisdiction
or an administrative stop order or similar order issued under any federal,
foreign or state law other than this chapter applicable to the offering,
provided however the administrator may not institute a proceeding against
an effective registration statement under this paragraph more than one (1)
year after the date of the order or injunction on which it is based, and
the administrator may not issue an order under this paragraph on the basis
of an order or injunction issued under the securities act of another state
unless the order or injunction was based on conduct that would constitute,
as of the date of the order, a ground for a stop order under this section;
(4) The issuer's enterprise or method of business includes or would
include activities that are unlawful where performed;
(5) With respect to a security sought to be registered under section
30-14-303, Idaho Code, there has been a failure to comply with the
undertaking required by section 30-14-303(b)(4), Idaho Code;
(6) The applicant or registrant has not paid the filing fee, provided
however the administrator shall void the order if the deficiency is
corrected; or
(7) The offering:
(A) Will work or tend to work a fraud upon purchasers or would so
operate;
(B) Has been or would be made with unreasonable amounts of
underwriters' and sellers' discounts, commissions or other
compensation, or promoters' profits or participations, or
unreasonable amounts or kinds of options; or
(C) Is being made on terms that are unfair, unjust or inequitable.
(b) Enforcement. To the extent practicable, the administrator by a rule
adopted or an order issued under this chapter shall publish standards that
provide notice of conduct that violates subsection (a)(7) of this section.
(c) Institution of stop order. The administrator may not institute a stop
order proceeding against an effective registration statement on the basis of
conduct or a transaction known to the administrator when the registration
statement became effective unless the proceeding is instituted within thirty
(30) days after the registration statement became effective.
(d) Summary process. The administrator may summarily revoke, deny,
postpone or suspend the effectiveness of a registration statement pending
final determination of an administrative proceeding. Upon the issuance of the
order, the administrator shall promptly notify each person specified in
subsection (e) of this section that the order has been issued, the reasons for
the revocation, denial, postponement or suspension, and that within fifteen
(15) days after the receipt of a request in a record from the person the
matter will be scheduled for a hearing. If a hearing is not requested and none
is ordered by the administrator, within thirty (30) days after the date of
service of the order, the order becomes final. If a hearing is requested or
ordered, the administrator, after notice of and an opportunity for a hearing
for each person subject to the order, may modify or vacate the order or extend
the order until final determination.
(e) Procedural requirements for stop order. A stop order may not be
issued under this section without:
(1) Appropriate notice to the applicant or registrant, the issuer, and
the person on whose behalf the securities are to be or have been offered;
(2) An opportunity for a hearing; and
(3) Findings of fact and conclusions of law in a record in accordance
with chapter 52, title 67, Idaho Code.
(f) Modification or vacation of stop order. The administrator may modify
or vacate a stop order issued under this section if the administrator finds
that the conditions that caused its issuance have changed or that it is
necessary or appropriate in the public interest or for the protection of
investors.

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