§707. Denial, suspension, or revocation of registration
A. The commissioner may issue a stop order denying effectiveness to or suspending or revoking the effectiveness of, any registration, and shall give notice of such issuance pursuant to R.S. 51:716, if he finds that the order is in the public interest and that:
(1) The registration statement as of its effective date, or as of any earlier date in the case of an order denying effectiveness, contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(2) Any prospectus used or to be used in connection with the offering contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
(3) This Part or any rule, order, or condition lawfully imposed under this Part has been willfully violated in connection with the offering by:
(a) The person filing the registration statement.
(b) The issuer, any partner, executive officer, or director of the issuer, any person occupying a similar status or performing similar functions, or any affiliate, but only if the person filing the registration statement is directly or indirectly controlled by or acting for the issuer.
(c) Any underwriter.
(4) The security registered or sought to be registered is the subject of a stop order of any federal or state securities commission or agency or similar order or a permanent or temporary injunction of any court of competent jurisdiction entered under any other federal or state act applicable to the offering, but:
(a) The commissioner may not institute a proceeding against an effective registration statement under this Paragraph more than one year from the date of the order or injunction relied on.
(b) The commissioner may not enter an order under this Paragraph on the basis of an order or injunction entered under any other federal or state act unless that order or injunction was based on facts which would currently constitute a ground for a stop order under this Section.
(5) The offering has worked or tended to work a fraud upon purchasers or would so operate.
(6) The security is sought to be registered by notification and is not eligible for such registration.
B. The commissioner may by order summarily postpone or suspend the effectiveness of the registration statement pending final determination of any proceeding under this Section. Upon the entry of the order, the commissioner shall promptly notify by telephone or telegraph the issuer, any person on whose behalf such distribution is being made, and the representative of the underwriters that it has been entered and of the reasons therefor and that within fifteen days after the receipt of a written request the matter will be set down for hearing. If no hearing is requested and none is ordered by the commissioner, the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of an opportunity for hearing to each person specified in R.S. 51:716(A), may modify or vacate the order or extend it until final determination.
C. No stop order issued under any part of this Section except the first sentence of Subsection B of this Section shall become effective until and unless the commissioner has complied with R.S. 51:716.
D. The commissioner may vacate or modify a stop order if he finds that the conditions which prompted its entry have changed or that it is otherwise in the public interest to do so.
Acts 1985, No. 722, §1.