Current through September 24, 2024
(1) By the
authority delegated to the commissioner in T.C.A §§
48-1-103(b)(11)
and
48-1-116,
rescission offers are exempt from T.C.A §
48-1-104
if all requirements set forth in this rule are met. All rescission offers that
do not meet the requirements of this rule must comply with the registration
requirements of T.C.A. §
48-1-104.
(2) No rescission offer exempted by this rule
may be conducted in this state without obtaining the Division's prior written
approval of the offer.
(3) Any
person seeking approval to conduct a rescission offer pursuant to this rule
shall first notify the Division in writing. Such notice shall include:
(a) A description of the securities
sold;
(b) The dates the securities
were sold;
(c) The names of the
Tennessee investors who purchased the securities;
(d) When the violation was discovered, if
applicable;
(e) How the violation
was discovered, if applicable; and
(f) A draft copy of the proposed rescission
offer document(s).
(4)
The draft copy of the proposed rescission offer document(s) must include the
following information:
(a) A statement
specifying why the rescission offer is being conducted;
(b) Disclosure of all material facts
regarding the rescission offer as well as any material facts that have arisen
with respect to the issuer and the investment since the initial sale(s) of
securities;
(c) Notice of the
investor's right to rescind the purchase and recover the consideration paid
plus interest at the legal rate from the date the subscription amount was paid
by the investor, calculated in accordance with T.C.A. §
48-1-122(k);
(d) A statement specifying the amount of time
in which the investor must elect to accept or reject the offer of rescission,
which shall be no less than thirty (30) days from the date the investor
received notice of the offer;
(e) A
statement describing the effect of the failure of an investor to accept or
reject the rescission offer within the designated time period;
(f) A description of the procedure for
accepting or rejecting the rescission offer;
(g) A statement that the offeree may wish to
consult with independent counsel before deciding to accept or reject the
rescission offer so as to be fully informed about the risks and the
consequences attached to either choice; and
(h) Any other such information as the
Division may deem appropriate and necessary for the protection of
investors.
(5) The
Division reserves the right to review the rescission offer by applying the same
standards for a registered offering under the following rules:
(a)
0780-04-02-.03;
(b)
0780-04-02-.04;
and
(c)
0780-04-02-.06.
(6) A summary of the results of
the rescission offer shall be provided to the Division in writing within thirty
(30) days of the offer's conclusion. The summary shall include:
(a) The names of the investors accepting the
offer;
(b) The names of the
investors declining the offer; and
(c) Certified mailing receipts for investors
who declined to respond to the offer.
(7) Successful completion of a rescission
offer does not relieve the offeror of any civil or administrative liability
available under the Act.
Authority: T.C.A §§
48-1-103(b)(11),
48-1-104,
and 48-1-116.
