3 AAC 08.620. Disqualification of small corporate offerings

(a) An issuer may not use NASAA Form U-7, or its successor, if the issuer, a beneficial owner of 10 percent or more of a class of the issuer's equity securities, an officer, director, or promoter of the issuer, a selling agent of the securities to be offered, or an officer, director, or partner of that selling agent

(1) files a registration statement that is the subject of a currently effective registration stop order entered under a federal or state securities law within the five years before the filing of the registration application;

(2) was convicted, within five years before the filing of the application for registration, of

(A) a misdemeanor in connection with the offer, purchase, or sale of a security; or

(B) a felony;

(3) is currently subject to a federal or state administrative enforcement order or judgment, entered within five years before the filing of the application for registration, and

(A) entered by a state's securities administrator or the SEC; or

(B) in which fraud or deceit was found; for purposes of this subparagraph, fraud and deceit include the making of untrue statements of material facts or omitting to state material facts;

(4) is subject to a state administrative enforcement order or judgment that prohibits, denies, or revokes the use of an exemption for registration in connection with the offer, purchase, or sale of securities;

(5) is currently subject to a court order, judgment, or decree, entered within five years before the filing of the application for registration, and

(A) temporarily, preliminarily, or permanently restraining or enjoining that person from engaging in or continuing a conduct or practice in connection with the purchase or sale of a security; or

(B) involving the making of a false filing with a state or with the SEC, entered within five years before the filing of the application for registration.

(b) The disqualifications under (a)(1)-(3) and (a)(5) of this section do not apply if

(1) the person subject to the disqualification is licensed or registered to conduct securities-related business in the state in which the administrative order or judgment was entered, or if the broker-dealer employing that person is licensed or registered in this state and the SEC Form BD, or its successor, filed with the administrator discloses the order, conviction, judgment, or decree; and

(2) the person acts only in the capacity for which the person is licensed or registered.

(c) A disqualification under (a) of this section does not apply if the agency that created the basis for the disqualification determines upon a showing of good cause that, within the agency's jurisdiction, a prohibition on the use of NASAA Form U-7, or its successor, is not necessary.

(d) If any of the circumstances set out in (a)(1)-(3) or (a)(5) of this section occurred more than five years before the date of the application for registration, the circumstances must be described on NASAA Form U-7, or its successor, as a miscellaneous factor.

History: Eff. 9/18/91, Register 119; am 4/19/2000, Register 154

Authority: AS 45.55.110

AS 45.55.950

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