(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
(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.
