Chapter 4 - Securities
CHAPTER 4 - SECURITIES
17-4-101. Fraudulent practices prohibited in securities sales andpurchases.
(a) It is unlawful for any person, in connection with theoffer, sale or purchase of any security, directly or indirectly:
(i) To employ any device, scheme, or artifice to defraud;
(ii) To make any untrue statement of a material fact or to omitto state a material fact necessary in order to make the statements made, in thelight of the circumstances under which they are made, not misleading; or
(iii) To engage in any act, practice, or course of business whichoperates or would operate as a fraud or deceit upon any person.
17-4-102. Fraudulent practices prohibited in advisory activities.
(a) It is unlawful for any person who receives anyconsideration from another person primarily for advising the other person as tothe value of securities or their purchase or sale, whether through the issuanceof analyses or reports or otherwise:
(i) To employ any device, scheme, or artifice to defraud theother person; or
(ii) To engage in any act, practice, or course of business whichoperates or would operate as a fraud or deceit upon the other person.
17-4-103. Broker-dealers and agents; registration required; notificationwhen agent begins or terminates activities; expiration of registrations.
(a) It is unlawful for any person to transact business in thisstate as a broker-dealer or agent unless he is registered under this act.
(b) It is unlawful for any broker-dealer or issuer to employ anagent unless the agent is registered. The registration of an agent is noteffective during any period when he is not associated with a particularbroker-dealer registered under this act or a particular issuer. When an agentbegins or terminates a connection with a broker-dealer or issuer, or begins orterminates those activities which make him an agent, the agent as well as thebroker-dealer or issuer shall promptly notify the secretary of state.
(c) Every registration expires one (1) year from its effectivedate unless renewed.
17-4-104. Broker-dealers and agents; registration procedure generally;fees; successors; minimum capital requirements; surety bonds or deposits.
(a) Generally. - A broker-dealer or agent may obtain an initialor renewal registration by filing with the secretary of state an applicationtogether with a consent to service of process pursuant to W.S. 17-4-126(g). Theapplication shall contain whatever information the secretary of state by rulerequires concerning such matters as (i) the applicant's form and place oforganization; (ii) the applicant's proposed method of doing business; (iii) thequalifications and business history of the applicant and, in the case of abroker-dealer, any partner, officer, or director, any person occupying asimilar status or performing similar functions, or any person directly orindirectly controlling the broker-dealer; (iv) any injunction or administrativeorder or conviction of a misdemeanor involving a security or any aspect of thesecurities business and any conviction of a felony; and (v) the applicant'sfinancial condition and history. The secretary of state may by rule or orderrequire an applicant for initial registration to publish an announcement of theapplication in one (1) or more specified newspapers published in this state. Ifno denial order is in effect and no proceeding is pending under W.S. 17-4-106,registration becomes effective at noon of the thirtieth day after anapplication is filed. The secretary of state may by rule or order specify anearlier effective date, and he may by order defer the effective date until noonof the thirtieth day after the filing of any amendment. Registration of abroker-dealer automatically constitutes registration of any agent who is apartner, officer, or director, or a person occupying a similar status orperforming similar functions.
(b) Every applicant for initial or renewal registration shallpay a filing fee of two hundred dollars ($200.00) in the case of a broker-dealer,and thirty-five dollars ($35.00) in the case of an agent. When an applicationis denied or withdrawn, the secretary of state shall retain the entire fee.
(c) Successors. - A registered broker-dealer may file anapplication for registration of a successor, whether or not the successor isthen in existence, for the unexpired portion of the year. There shall be nofiling fee.
(d) Minimum capital. - The secretary of state may by rule ororder require a minimum capital for registered broker-dealers subject to thelimitations of section 15 of the Securities Exchange Act of 1934.
(e) Surety bonds. - The secretary of state may by rule or orderrequire registered broker-dealers and agents to post surety bonds in amounts asthe secretary of state may prescribe, subject to the limitations of section 15of the Securities Exchange Act of 1934, and may determine their conditions. Anyappropriate deposit of cash or securities shall be accepted in lieu of any bondso required. No bond may be required of any registrant whose net capital, whichmay be defined by rule, exceeds the amounts required by the secretary ofstate. Every bond shall provide for suit thereon by any person who has a causeof action under W.S. 17-4-122 and, if the secretary of state by rule or orderrequires, by any person who has a cause of action not arising under thischapter. Every bond shall provide that no suit may be maintained to enforceany liability on the bond unless brought within two (2) years after the sale orother act upon which it is based.
17-4-105. Broker-dealers and agents; records; financial reports;amendments to documents filed; examinations.
(a) Every registered broker-dealer shall make and keep suchaccounts, correspondence, memoranda, papers, books, and other records as thesecretary of state prescribes by rule or order, except as provided by section15 of the Securities Exchange Act of 1934. All records so required shall bepreserved for such period as the secretary of state prescribes by rule ororder.
(b) Every registered broker-dealer shall file such financialreports as the secretary of state prescribes by rule or order, as provided bysection 15 of the Securities Exchange Act of 1934.
(c) If the information contained in any document filed with thesecretary of state is or becomes inaccurate or incomplete in any materialrespect, the registrant shall promptly file a correcting amendment unlessnotification of the correction has been given under W.S. 17-4-103(b).
(d) All the records referred to in subsection (a) of thissection are subject at any time or from time to time to such reasonableperiodic, special, or other examinations by representatives of the secretary ofstate, within or without this state, as the secretary of state deems necessaryor appropriate in the public interest or for the protection of investors. Forthe purpose of avoiding unnecessary duplication of examinations, the secretaryof state, insofar as he deems it practicable in administering this subsection,may cooperate with the securities administrators of other states, thesecurities and exchange commission, and any national securities exchange ornational securities association registered under the Securities Exchange Act of1934.
17-4-106. Broker-dealers and agents; denial, revocation, suspension,cancellation or withdrawal of registration.
(a) The secretary of state may by order deny, suspend, makeconditional or probationary or revoke any registration or may impose a civilpenalty, require restitution to investors, censure or reprimand, requireremedial training, impose special reporting requirements or impose otherconditions, which he determines to be in the public interest, against anyregistration or registered person if he finds:
(i) That the order is in the public interest; and
(ii) That the applicant or registrant or, in the case of abroker-dealer, any partner, officer, or director, any person occupying asimilar status or performing similar functions, or any person directly orindirectly controlling the broker-dealer:
(A) Has filed an application for registration which as of itseffective date, or as of any date after filing in the case of an order denyingeffectiveness, was incomplete in any material respect or contained anystatement which was, in light of the circumstances under which it was made,false or misleading with respect to any material fact;
(B) Has willfully violated or willfully failed to comply withany provision of this act or a predecessor act or any rule or order under thisact or a predecessor act;
(C) Has been convicted, within the past ten (10) years, of anymisdemeanor involving a security or any aspect of the securities business, orany felony;
(D) Is permanently or temporarily enjoined by any court ofcompetent jurisdiction from engaging in or continuing any conduct or practiceinvolving any aspect of the securities business;
(E) Is the subject of an order of the secretary of statedenying, suspending, or revoking registration as a broker-dealer or agent;
(F) Is the subject of an order entered within the past five (5)years by the securities administrator of any other state or by the securitiesand exchange commission denying or revoking registration as a broker-dealer,agent, or investment adviser, or the substantial equivalent of those terms asdefined in this act, or is the subject of an order of the securities andexchange commission suspending or expelling him from a national securitiesexchange or national securities association registered under the SecuritiesExchange Act of 1934, or is the subject of a United States post office fraudorder; but:
(I) The secretary of state may not institute a revocation orsuspension proceeding under subparagraph (F) more than one (1) year from thedate of the order relied on; and
(II) He may not enter an order under subparagraph (F) on thebasis of an order under another state act unless that order was based on factswhich would currently constitute a ground for an order under this section.
(G) Has engaged in dishonest or unethical practices in thesecurities business;
(H) Is insolvent, either in the sense that his liabilitiesexceed his assets or in the sense that he cannot meet his obligations as theymature; but the secretary of state may not enter an order against a broker-dealerunder this clause without a finding of insolvency as to the broker-dealer; or
(J) Is not qualified on the basis of such factors as training,experience, and knowledge of the securities business, except as otherwiseprovided in subsection (b) of this section.
(b) The secretary of state may by order deny, suspend, orrevoke any registration if he finds:
(i) That the order is in the public interest; and
(ii) That the applicant or registrant:
(A) Has failed reasonably to supervise his agents if he is abroker-dealer; or
(B) Has failed to pay the proper filing fee; but the secretaryof state may enter only a denial order under this subparagraph, and he shallvacate any such order when the deficiency has been corrected.
(c) The secretary of state may not institute a suspension orrevocation proceeding on the basis of a fact or transaction known to him whenregistration became effective unless the proceeding is instituted within thenext thirty (30) days.
(d) The following provisions govern the application of W.S.17-4-106(a)(ii)(J):
(i) The secretary of state may not enter an order against abroker-dealer on the basis of the lack of qualification of any person otherthan:
(A) The broker-dealer himself if he is an individual; or
(B) An agent of the broker-dealer.
(ii) The secretary of state may not enter an order solely on thebasis of lack of experience if the applicant or registrant is qualified bytraining or knowledge or both;
(iii) The secretary of state shall consider that an agent whowill work under the supervision of a registered broker-dealer need not have thesame qualifications as a broker-dealer;
(iv) The secretary of state may by rule provide for anexamination, which may be written or oral or both, to be taken by any class ofor all applicants, and provide for a reasonable fee to be paid before theexamination is taken.
(e) The secretary of state may by order summarily postpone orsuspend registration pending final determination of any proceeding under thissection. Upon entry of the order, the secretary of state shall promptly notifythe applicant or registrant, as well as the employer or prospective employer ifthe applicant or registrant is an agent, that it has been entered and of thereasons therefor and that within fifteen (15) days after the receipt of awritten request the matter will be set down for hearing. If no hearing isrequested and none is ordered by the secretary of state, the order will remainin effect until it is modified or vacated by the secretary of state. If hearingis requested or ordered, the secretary of state, after notice of andopportunity for hearing, may modify or vacate the order or extend it untilfinal determination.
(f) If the secretary of state finds that any registrant orapplicant for registration is no longer in existence or has ceased to dobusiness as a broker-dealer or agent, or is subject to an adjudication ofmental incompetence or to the control of a committee, conservator, or guardian,or cannot be located after reasonable search, the secretary of state may byorder cancel the registration or application.
(g) Withdrawal from registration as a broker-dealer or agentbecomes effective thirty (30) days after receipt of an application to withdrawor within such shorter period of time as the secretary of state may determine,unless a revocation or suspension proceeding is pending when the application isfiled or a proceeding to revoke or suspend or to impose conditions upon thewithdrawal is instituted within thirty (30) days after the application isfiled. If a proceeding is pending or instituted, withdrawal becomes effectiveat such time and upon such conditions as the secretary of state by orderdetermines. If no proceeding is pending or instituted and withdrawalautomatically becomes effective, the secretary of state may neverthelessinstitute a revocation or suspension proceeding under W.S. 17-4-106(a)(ii)(B)within one (1) year after withdrawal became effective and enter a revocation orsuspension order as of the last date on which registration was effective.
(h) No order may be entered under any part of this sectionexcept the first sentence of subsection (e) without:
(i) Appropriate notice to the applicant or registrant (as wellas the employer or prospective employer if the applicant or registrant is anagent);
(ii) Opportunity for hearing; and
(iii) Written findings of fact and conclusions of law.
(j) Any order imposing a civil penalty, assessing costs,requiring restitution or imposing any other monetary penalty shall be enteredin accordance with the provisions of W.S. 17-4-124(f). Civil and monetarypenalties other than costs and restitution shall be collected and paid to thestate treasurer and credited as provided in W.S. 8-1-109.
17-4-107. Registration of securities; required; exception forexemptions.
(a) It is unlawful for any person to offer or sell any securityin this state unless:
(i) It is registered under this chapter;
(ii) The security or transaction is exempted under W.S.17-4-114; or
(iii) It is a covered security.
17-4-108. Registration of securities; registration by notification.
(a) The following securities may be registered by notification,whether or not they are also eligible for registration by coordination underW.S. 17-4-109:
(i) Any security whose issuer and any predecessors have been incontinuous operation for at least five (5) years if (A) there has been nodefault during the current fiscal year or within the three (3) preceding fiscalyears in the payment of principal, interest, or dividends on any security ofthe issuer (or any predecessor) with a fixed maturity or a fixed interest ordividend provision, and (B) the issuer and any predecessors during the pastthree (3) fiscal years have had average net earnings, determined in accordancewith generally accepted accounting practices, (I) which are applicable to allsecurities without a fixed maturity or a fixed interest or dividend provisionoutstanding at the date the registration statement is filed and equal at leastfive percent (5%) of the amount of such outstanding securities (as measured bythe maximum offering price or the market price on a day, selected by theregistrant, within thirty (30) days before the date of filing the registrationstatement, whichever is higher, or book value on a day, selected by theregistrant, within ninety (90) days of the date of filing the registrationstatement to the extent that there is neither a readily determinable marketprice nor a cash offering price), or (II) which, if the issuer and anypredecessors have not had any security of the type specified in clause (I)outstanding for three (3) full fiscal years, equal to at least five percent(5%) of the amount (as measured in clause (I)) of all securities which will beoutstanding if all the securities being offered or proposed to be offered(whether or not they are proposed to be registered or offered in this state)are issued;
(ii) Any security registered for nonissuer distribution if (A)any security of the same class has ever been registered under this act or apredecessor act, or (B) the security being registered was originally issuedpursuant to an exemption under this act or a predecessor act.
(b) A registration statement under this section shall containthe following information and be accompanied by the following documents inaddition to the information specified in W.S. 17-4-111(c) and the consent toservice of process required by W.S. 17-4-126(g):
(i) A statement demonstrating eligibility for registration bynotification;
(ii) With respect to the issuer and any significant subsidiary:its name, address, and form of organization; the state (or foreignjurisdiction) and the date of its organization; and the general character andlocation of its business;
(iii) With respect to any person on whose behalf any part of theoffering is to be made in a nonissuer distribution: his name and address; theamount of securities of the issuer held by him as of the date of the filing ofthe registration statement; and a statement of his reasons for making theoffering;
(iv) A description of the security being registered;
(v) The information and documents specified in W.S.17-4-110(b)(viii), (x) and (xii); and
(vi) In the case of any registration under W.S. 17-4-108(a)(ii)which does not also satisfy the conditions of W.S. 17-4-108(a)(i) a balancesheet of the issuer as of a date within four (4) months prior to the filing ofthe registration statement, and a summary of earnings for each of the two (2)fiscal years preceding the date of the balance sheet and for any period betweenthe close of the last fiscal year and the date of the balance sheet, or for theperiod of the issuer's and any predecessors' existence if less than two (2)years.
(c) If no stop order is in effect and no proceeding is pendingunder W.S. 17-4-112, a registration statement under this section automaticallybecomes effective at one o'clock standard time in the afternoon of the secondfull business day after the filing of the registration statement or the lastamendment, or at such earlier time as the secretary of state determines.
17-4-109. Registration of securities; registration by coordination.
(a) Any security for which a registration statement has beenfiled under the Securities Act of 1933, or for which a filing has been madepursuant to section 3(b) or 3(c) of that act, in connection with the sameoffering may be registered by coordination.
(b) A registration statement under this section shall containthe following information and be accompanied by the following documents inaddition to the information specified in W.S. 17-4-111(c) and the consent toservice of process required by W.S. 17-4-126;
(i) Two (2) copies of the latest form of prospectus filed underthe Securities Act of 1933;
(ii) If the secretary of state by rule or otherwise requires, acopy of the articles of incorporation and bylaws (or their substantialequivalent) currently in effect, a copy of any agreements with or amongunderwriters, a copy of any indenture or other instrument governing theissuance of the security to be registered, and a specimen or copy of thesecurity;
(iii) If the secretary of state requests, any other information,or copies of any other documents, filed under the Securities Act of 1933; and
(iv) An undertaking to forward all amendments to the federalprospectus, other than an amendment which merely delays the effective date ofthe registration statement, promptly and in any event not later than the firstbusiness day after the day they are forwarded to or filed with the securitiesand exchange commission, whichever first occurs.
(c) A registration statement under this section automaticallybecomes effective at the moment the federal registration statement becomes effectiveif all the following conditions are satisfied:
(i) No stop order is in effect and no proceeding is pendingunder W.S. 17-4-112;
(ii) The registration statement has been on file with thesecretary of state for at least ten (10) days; and
(iii) A statement of the maximum and minimum proposed offeringprices and the maximum underwriting discounts and commissions has been on filefor two (2) full business days or such shorter periods as the secretary ofstate permits by rule or otherwise and the offering is made within thoselimitations.
(d) The registrant shall promptly notify the secretary of stateby telephone or telegram of the date and time when the federal registrationstatement became effective and the content of the price amendment, if any, andshall promptly file a post effective amendment containing the information anddocuments in the price amendment. "Price amendment" means the finalfederal amendment which includes a statement of the offering price,underwriting and selling discounts or commissions, amount of proceeds,conversion rates, call prices, and other matters dependent upon the offeringprice. Upon failure to receive the required notification and post effectiveamendment with respect to the price amendment, the secretary of state may entera stop order, without notice or hearing, retroactively denying effectiveness tothe registration statement or suspending its effectiveness until compliancewith this subsection, if he promptly notifies the registrant by telephone ortelegram (and promptly confirms by letter or telegraph when he notifies bytelephone) of the issuance of the order. If the registrant proves compliancewith the requirements of this subsection as to notice and post effectiveamendment, the stop order is void as of the time of its entry. The secretary ofstate may by rule or otherwise waive either or both of the conditions specifiedin paragraphs (c)(ii) and (iii) of this section. If the federal registrationstatement becomes effective before all the conditions in this subsection aresatisfied and they are not waived, the registration statement automaticallybecomes effective as soon as all the conditions are satisfied. If theregistrant advises the secretary of state of the date when the federalregistration statement is expected to become effective, the secretary of stateshall promptly advise the registrant by telephone or telegram, at theregistrant's expense, whether all the conditions are satisfied and whether hethen contemplates the institution of a proceeding under W.S. 17-4-112; but thisadvice by the secretary of state does not preclude the institution of such aproceeding at any time.
17-4-110. Registration of securities; registration by qualification.
(a) Any security may be registered by qualification.
(b) A registration statement under this section shall containthe following information and be accompanied by the following documents inaddition to the information specified in W.S. 17-4-111(c) and the consent toservice of process required by W.S. 17-4-126(g):
(i) With respect to the issuer and any significant subsidiary:its name, address, and form of organization; the state or foreign jurisdictionand date of its organization; the general character and location of itsbusiness; a description of its physical properties and equipment; and astatement of the general competitive conditions in the industry or business inwhich it is or will be engaged;
(ii) With respect to every director and officer of the issuer,or person occupying a similar status or performing similar functions: his name,address, and principal occupation for the past five (5) years; the amount ofsecurities of the issuer held by him as of a specified date within thirty (30)days of the filing of the registration statement; the amount of the securitiescovered by the registration statement to which he has indicated his intentionto subscribe; and a description of any material interest in any materialtransaction with the issuer or any significant subsidiary effected within thepast three (3) years or proposed to be effected;
(iii) With respect to persons covered by paragraph (b)(ii) ofthis section: the remuneration paid during the past twelve (12) months andestimated to be paid during the next twelve (12) months, directly orindirectly, by the issuer (together with all predecessors, parents,subsidiaries, and affiliates) to all those persons in the aggregate;
(iv) With respect to any person owning of record, orbeneficially if known, ten percent (10%) or more of the outstanding shares ofany class of equity security of the issuer: the information specified inparagraph (b)(ii) of this section other than his occupation;
(v) With respect to every promoter if the issuer was organizedwithin the past three (3) years: the information specified in paragraph (b)(ii)of this section, any amount paid to him within that period or intended to bepaid to him, and the consideration for any such payment;
(vi) With respect to any person on whose behalf any part of theoffering is to be made in a nonissuer distribution: his name and address; theamount of securities of the issuer held by him as of the date of the filing ofthe registration statement; a description of any material interest in anymaterial transaction with the issuer or any significant subsidiary effectedwithin the past three (3) years of proposed to be effected; and a statement ofhis reasons for making the offering;
(vii) The capitalization and long-term debt (on both a currentand pro forma basis) of the issuer and any significant subsidiary, including adescription of each security outstanding or being registered or otherwiseoffered, and a statement of the amount and kind of consideration (whether inthe form of cash, physical assets, services, patents, goodwill, or anythingelse) for which the issuer or any subsidiary has issued any of its securitieswithin the past two (2) years or is obligated to issue any of its securities;
(viii) The kind and amount of securities to be offered; theproposed offering price or the method by which it is to be computed; anyvariation therefrom at which any portion of the offering is to be made to anyperson or class of persons other than the underwriters, with a specification ofany such person or class; the basis upon which the offering is to be made ifotherwise than for cash; the estimated aggregate underwriting and sellingdiscounts or commissions and finders' fees (including separately cash,securities, contracts, or anything else of value to accrue to the underwritersor finders in connection with the offering) or, if the selling discounts orcommissions are variable, the basis of determining them and their maximum andminimum amounts; the estimated amounts of other selling expenses, includinglegal, engineering, and accounting charges; the name and address of everyunderwriter and every recipient of a finder's fee; a copy of any underwritingor selling group agreement pursuant to which the distribution is to be made, orthe proposed form of any such agreement whose terms have not yet beendetermined; and a description of the plan of distribution of any securitieswhich are to be offered otherwise than through an underwriter;
(ix) The estimated cash proceeds to be received by the issuerfrom the offering; the purposes for which the proceeds are to be used by theissuer; the amount to be used for each purpose; the order or priority in whichthe proceeds will be used for the purposes stated; the amounts of any funds tobe raised from other sources to achieve the purposes stated; the sources of anysuch funds; and, if any part of the proceeds is to be used to acquire anyproperty (including goodwill) otherwise than in the ordinary course ofbusiness, the names and addresses of the vendors, the purchase price, the namesof any persons who have received commissions in connection with theacquisition, and the amounts of any such commissions and any other expense inconnection with the acquisition (including the cost of borrowing money tofinance the acquisition);
(x) A description of any stock options or other securityoptions outstanding, or to be created in connection with the offering, togetherwith the amount of any such options held or to be held by every person requiredto be named in paragraph (b)(ii), (iv), (v), (vi), or (viii) of this sectionand by any person who holds or will hold ten percent (10%) or more in theaggregate of any such options;
(xi) The dates of, parties to, and general effect conciselystated of, every management or other material contract made or to be madeotherwise than in the ordinary course of business if it is to be performed inwhole or in part at or after the filing of the registration statement or wasmade within the past two (2) years, together with a copy of every suchcontract; and a description of any pending litigation or proceeding to whichthe issuer is a party and which materially affects its business or assets(including any such litigation or proceeding known to be contemplated bygovernmental authorities);
(xii) A copy of any prospectus, pamphlet, circular, form letter,advertisement, or other sales literature intended as of the effective date tobe used in connection with the offering;
(xiii) A specimen or copy of the security being registered; a copyof the issuer's articles of incorporation and bylaws, or their substantialequivalents, as currently in effect; and a copy of any indenture or otherinstrument covering the security to be registered;
(xiv) A signed or conformed copy of an opinion of counsel as tothe legality of the security being registered (with an English translation ifit is in a foreign language), which shall state whether the security when soldwill be legally issued, fully paid, and nonassessable, and, if a debt security,a binding obligation of the issuer;
(xv) The written consent of any accountant, engineer, appraiser,or other person whose profession gives authority to a statement made by him, ifany such person is named as having prepared or certified a report or valuation(other than a public and official document or statement) which is used inconnection with the registration statement;
(xvi) A balance sheet of the issuer as of a date within four (4)months prior to the filing of the registration statement; a profit and lossstatement and analysis of surplus for each of the three (3) fiscal yearspreceding the date of the balance sheet and for any period between the close ofthe last fiscal year and the date of the balance sheet, or for the period ofthe issuer's and any predecessors' existence if less than three (3) years; and,if any part of the proceeds of the offering is to be applied to the purchase ofany business, the same financial statements which would be required if thatbusiness were the registrant; and
(xvii) Such additional information as the secretary of staterequires by rule or order.
(c) A registration statement under this section becomeseffective when the secretary of state so orders.
(d) The secretary of state may by rule or order require as acondition of registration under this section that a prospectus containing anydesignated part of the information specified in subsection (b) be sent or givento each person to whom an offer is made before or concurrently with:
(i) The first written offer made to him (otherwise than bymeans of a public advertisement) by or for the account of the issuer or anyother person on whose behalf the offering is being made, or by any underwriteror broker-dealer who is offering part of an unsold allotment or subscriptiontaken by him as a participant in the distribution;
(ii) The confirmation of any sale made by or for the account ofany such person;
(iii) Payment pursuant to any such sale; or
(iv) Delivery of the security pursuant to any such sale,whichever first occurs.
17-4-111. Registration of securities; registration provisionsgenerally.
(a) Who may file statement. - A registration statement may befiled by the issuer, any other person on whose behalf the offering is to bemade, or a registered broker-dealer.
(b) Every person shall pay a filing fee of 1/50 of 1 percent(.0002) of the total dollar offering amount to be offered in this state, butthe fee shall in no case be less than two hundred dollars ($200.00) nor morethan six hundred dollars ($600.00) when filing an initial registrationstatement or renewing a previously filed registration statement. When aregistration statement is withdrawn before the effective date or a preeffectivestop order is entered under W.S. 17-4-112 the secretary of state shall retain onehundred dollars ($100.00) of the fee.
(c) Contents of statement. - Every registration statement shallspecify:
(i) The amount of securities to be offered in this state;
(ii) The states in which a registration statement or similardocument in connection with the offering has been or is to be filed; and
(iii) Any adverse order, judgment, or decree entered inconnection with the offering by the regulatory authorities in each state or byany court or the securities and exchange commission.
(d) Incorporation of previously filed documents. - Any documentfiled under this act or a predecessor act within five (5) years preceding thefiling of a registration statement may be incorporated by reference in theregistration statement to the extent that the document is currently accurate.
(e) Permitting omissions from statement. - The secretary ofstate may by rule or otherwise permit the omission of any item of informationor document from any registration statement.
(f) Information which may not be required. - In the case of anonissuer distribution, information may not be required under W.S. 17-4-110 or17-4-111(k) unless it is known to the person filing the registration statementor to the persons on whose behalf the distribution is to be made, or can befurnished by them without unreasonable effort or expense.
(g) Escrow or impounding. - The secretary of state may by ruleor order require as a condition of registration by qualification orcoordination (i) that any security issued within the past three (3) years or tobe issued to a promoter for a consideration substantially different from thepublic offering price or to any person for a consideration other than cash, bedeposited in escrow; and (ii) that the proceeds from the sale of the registeredsecurity in this state be impounded until the issuer receives a specifiedamount from the sale of the security either in this state or elsewhere. Thesecretary of state may by rule or order determine the conditions of any escrowor impounding required hereunder, but he may not reject a depository solelybecause of location in another state.
(h) Subscription or sale contract. - The secretary of state mayby rule or order require as a condition of registration that any securityregistered by qualification or coordination be sold only on a specified form ofsubscription or sale contract, and that a signed or conformed copy of eachcontract be filed with the secretary of state or preserved for any period up tothree (3) years specified in the rule or order.
(j) Duration of statement. - Every registration statement iseffective for one (1) year from its effective date except during the time astop order is in effect under W.S. 17-4-112. A request for renewing aregistration statement for an additional year shall be accompanied by a salesreport pursuant to subsection (k) of this section and the prescribed filingfee. All outstanding securities of the same class as a registered security areconsidered to be registered for the purpose of any nonissuer transaction (i) solong as the registration statement is effective and (ii) between the thirtiethday after the entry of any stop order suspending or revoking the effectivenessof the registration statement under W.S. 17-4-112 (if the registrationstatement did not relate in whole or in part to a nonissuer distribution) andone (1) year from the effective date of the registration statement. Aregistration statement may not be withdrawn for one (1) year from its effectivedate if any securities of the same class are outstanding. A registrationstatement may be withdrawn otherwise only in the discretion of the secretary ofstate.
(k) Reports. - So long as a registration statement iseffective, the secretary of state may by rule or order require the person who filedthe registration statement to file reports, not more often than quarterly, tokeep reasonably current the information contained in the registration statementand to disclose the progress of the offering.
(m) Amendments. - A registration statement relating to asecurity issued by a face amount certificate company or a redeemable securityissued by an open-end management company or unit investment trust, as thoseterms are defined in the Investment Company Act of 1940, may be amended afterits effective date so as to increase the securities specified as proposed to beoffered. Such an amendment becomes effective when the secretary of state soorders. Every person filing such an amendment shall pay the filing feespecified in subsection (b) of this section.
17-4-112. Registration of securities; denial, suspension or revocationof registration; stop orders.
(a) The secretary of state may issue a stop order denyingeffectiveness to, or suspending or revoking the effectiveness of, anyregistration statement if he finds that the order is in the public interest andthat:
(i) The registration statement as of its effective date or asof any earlier date in the case of an order denying effectiveness, or anyamendment under W.S. 17-4-111(m) as of its effective date, or any report underW.S. 17-4-111(k) is incomplete in any material respect or contains anystatement which was, in the light of the circumstances under which it was made,false or misleading with respect to any material fact;
(ii) Any provision of this act or any rule, order, or conditionlawfully imposed under this act has been willfully violated, in connection withthe offering, by:
(A) The person filing the registration statement;
(B) The issuer, any partner, officer, or director of theissuer, any person occupying a similar status or performing similar functions,or any person directly or indirectly controlling or controlled by the issuer,but only if the person filing the registration statement is directly orindirectly controlled by or acting for the issuer; or
(C) Any underwriter;
(iii) The security registered or sought to be registered is thesubject of an administrative stop order or similar order or a permanent ortemporary injunction of any court of competent jurisdiction entered under anyother federal or state act applicable to the offering, but:
(A) The secretary of state may not institute a proceedingagainst an effective registration statement under paragraph (iii) of thissubsection more than one (1) year from the date of the order or injunctionrelied on; and
(B) He may not enter an order under paragraph (iii) of thissubsection on the basis of an order or injunction entered under any other stateact unless that order or injunction was based on facts which would currentlyconstitute a ground for a stop order under this section.
(iv) The issuer's enterprise or method of business includes orwould include activities which are illegal where performed;
(v) The offering has worked or tended to work a fraud upon purchasersor would so operate;
(vi) The offering has been or would be made with unreasonableamounts of underwriters' and sellers' discounts, commissions, or othercompensation, or promoters' profits or participation, or unreasonable amountsor kinds of options;
(vii) When a security is sought to be registered by notification,it is not eligible for such registration;
(viii) When a security is sought to be registered by coordination,there has been a failure to comply with the undertaking required by W.S.17-4-109(b)(iv); or
(ix) The applicant or registrant has failed to pay the properfiling fee; but the secretary of state may enter only a denial order under thissubdivision and he shall vacate any such order when the deficiency has beencorrected.
(b) The secretary of state may not institute a stop orderproceeding against an effective registration statement on the basis of a factor transaction known to him when the registration statement became effectiveunless the proceeding is instituted within the next thirty (30) days.
(c) The secretary of state may by order summarily postpone orsuspend the effectiveness of the registration statement pending finaldetermination of any proceeding under this section. Upon the entry of theorder, the secretary of state shall promptly notify each person specified insubsection (a) of this section that it has been entered and of the reasonstherefor and that within fifteen (15) days after the receipt of a writtenrequest the matter will be set down for hearing. If no hearing is requested andnone is ordered by the secretary of state, the order will remain in effectuntil it is modified or vacated by the secretary of state. If a hearing isrequested or ordered, the secretary of state, after notice of and opportunityfor hearing to each person specified in subsection (d) of this section, maymodify or vacate the order or extend it until final determination.
(d) No stop order may be entered under any part of this sectionexcept the first sentence of subsection (c) of this section without:
(i) Appropriate notice to the applicant or registrant, theissuer, and the person on whose behalf the securities are to be or have beenoffered;
(ii) Opportunity for hearing; and
(iii) Written findings of fact and conclusions of law.
(e) The secretary of state may vacate or modify a stop order ifhe finds that the conditions which prompted its entry have changed or that itis otherwise in the public interest to do so.
17-4-113. Definitions.
(a) When used in this act, unless the context otherwiserequires:
(i) "Administrator" means the secretary of state;
(ii) "Agent" means any individual other than abroker-dealer who represents a broker-dealer or issuer in effecting orattempting to effect purchases or sales of securities. "Agent" doesnot include an individual who represents (A) an issuer in (I) effectingtransactions in a security exempted by W.S. 17-4-114(a)(i), (ii), (iii), (ix)or (x), (II) effecting transactions exempted by W.S. 17-4-114(b), (III) effectingtransactions in a covered security as described in section 18(b)(3) and18(b)(4)(D) of the Securities Act of 1933, or (IV) effecting transactions withexisting employees, partners or directors of the issuer if no commission orother remuneration is paid or given directly or indirectly for soliciting anyperson in this state; or (B) a broker-dealer in effecting transactions in thisstate limited to those transactions described in section 15(h)(2) of theSecurities Exchange Act of 1934. A partner, officer, or director of abroker-dealer or issuer, or a person occupying a similar status or performingsimilar functions, is an agent only if he otherwise comes within thisdefinition;
(iii) "Broker-dealer" means any person engaged in thebusiness of effecting transactions in securities for the account of others orfor his own account. "Broker-dealer" does not include:
(A) An agent;
(B) An issuer;
(C) A bank, savings institution, or trust company, engaging insecurities transactions limited to trust or banking functions and not with thegeneral public;
(D) A person who has no place of business in this state if:
(I) He effects transactions in this state exclusively with orthrough (1) the issuers of the securities involved in the transactions, (2)other broker-dealers or (3) banks, savings institutions, trust companies,insurance companies, investment companies as defined in the Investment CompanyAct of 1940, pension or profit-sharing trusts, or other financial institutionsor institutional buyers, whether acting for themselves or as trustees; or
(II) During any period of twelve (12) consecutive months he doesnot direct more than fifteen (15) offers to sell or buy into this state in anymanner to persons other than those specified in subdivision (I) of thissubparagraph, whether or not the offeror or any of the offerees is then presentin this state.
(E) A person who is resident in Canada, has no office or otherphysical presence in this state, and complies with the following conditions:
(I) Is a member of a self-regulatory organization or stockexchange in Canada;
(II) Maintains his provincial or territorial registration andhis membership in a self-regulatory organization or stock exchange in goodstanding;
(III) Is not in violation of W.S. 17-4-101; and
(IV) Only effects or attempts to effect transactions insecurities:
(1) With or for a person from Canada who is temporarily present in this state, withwhom the Canadian person had a bona fide business-client relationship beforethe person entered this state; or
(2) With or for a person from Canada who is present in this state, whosetransactions are in a self-directed tax advantaged retirement plan in Canada ofwhich the person is the holder or contributor.
(iv) "Fraud", "deceit", and"defraud" are not limited to common-law deceit;
(v) "Guaranteed" means guaranteed as to payment ofprincipal, interest, or dividends;
(vi) "Issuer" means any person who issues or proposesto issue any security, except that with respect to certificates of deposit,voting trust certificates, or collateral trust certificates, or with respect tocertificates of interest or shares in an unincorporated investment trust nothaving a board of directors or persons performing similar functions or of thefixed, restricted management, or unit type, the term "issuer" meansthe person or persons performing the acts and assuming the duties of depositoror manager pursuant to the provisions of the trust or other agreement orinstrument under which the security is issued;
(vii) "Nonissuer" means not directly or indirectly forthe benefit of the issuer;
(viii) "Person" means an individual, a corporation, apartnership, an association, a joint-stock company, a trust where the interestsof the beneficiaries are evidenced by a security, an unincorporatedorganization, a government, or political subdivision of a government;
(ix)(A) "Sale" or "sell" includes everycontract of sale of, contract to sell, or disposition of, a security orinterest in a security for value;
(B) "Offer" or "offer to sell" includesevery attempt or offer to dispose of, or solicitation of an offer to buy, asecurity or interest in a security for value;
(C) Any security given or delivered with, or as a bonus onaccount of, any purchase of securities or any other thing is considered toconstitute part of the subject of the purchase and to have been offered andsold for value;
(D) A purported gift of assessable stock is considered toinvolve an offer and sale;
(E) Every sale or offer of a warrant or right to purchase orsubscribe to another security of the same or another issuer, as well as everysale or offer of a security which gives the holder a present or future right orprivilege to convert into another security of the same or another issuer, isconsidered to include an offer of the other security;
(F) The terms defined in this subsection do not include:
(I) Any bona fide pledge or loan;
(II) Any stock dividend, whether the corporation distributingthe dividend is the issuer of the stock or not, if nothing of value is given bystockholders for the dividend other than the surrender of a right to a cash orproperty dividend when each stockholder may elect to take the dividend in cashor property or in stock;
(III) Any act incident to a class vote by stockholders, pursuantto the certificate of incorporation or the applicable corporation statute, on amerger, consolidation, reclassification of securities, or sale of corporateassets in consideration of the issuance of securities of another corporation;or
(IV) Any act incident to a judicially approved reorganization inwhich a security is issued in exchange for one (1) or more outstandingsecurities, claims, or property interests, or partly in such exchange and partlyfor cash.
(x) "Securities Act of 1933", "SecuritiesExchange Act of 1934", "Public Utility Holding Company Act of1935", and "Investment Company Act of 1940" mean the federalstatutes of those names as amended before or after the effective date of thisact;
(xi) "Security" means any note; stock; treasury stock;bond; debenture; evidence of indebtedness; certificate of interest orparticipation in any profit sharing agreement; collateral trust certificate;preorganization certificate or subscription; transferable share; investmentcontract; voting trust certificate; certificate of deposit for a security or,in general, any interest or instrument commonly known as a"security", or any certificate of interest or participation in,temporary or interim certificate for, receipt for, guarantee of, or warrant orright to subscribe to or purchase, any of the foregoing. "Security"does not include any insurance or endowment policy or annuity contract underwhich an insurance company promises to pay money either in a lump sum orperiodically for life or for some other specified period;
(xii) "State" means any state, territory, or possessionof the United States, the District of Columbia and Puerto Rico;
(xiii) "Covered security" means any security that is acovered security under section 18(b) of the Securities Act of 1933 or rules orregulations promulgated thereunder, except, up through October 10, 1999, orsuch other date as may be legally permissible, a covered security for which afee has not been paid and promptly remedied following written notification fromthe secretary of state to the issuer of the nonpayment or underpayment of suchfees, as required by this chapter, shall not be a covered security.
17-4-114. Exemptions from registration and literature filingrequirements.
(a) The following securities are exempted from W.S. 17-4-107and 17-4-115:
(i) Any security (including a revenue obligation) issued orguaranteed by the United States, any state, any political subdivision of astate, or any agency or corporate or other instrumentality of one (1) or moreof the foregoing; or any certificate of deposit for any of the foregoing;
(ii) Any security issued or guaranteed by Canada, any Canadianprovince, any political subdivision of any such province, any agency orcorporate or other instrumentality of one (1) or more of the foregoing, or anyother foreign government with which the United States currently maintainsdiplomatic relations, if the security is recognized as a valid obligation bythe issuer or guarantor;
(iii) Any security issued by a state or national bank authorizedto do business in the state;
(iv) Any security issued by and representing an interest in or adebt of, or guaranteed by, any federal savings and loan association, or anybuilding and loan or similar association organized under the laws of any stateand authorized to do business in this state;
(v) Any security issued or guaranteed by any federal creditunion or any credit union, industrial loan association, or similar associationorganized and supervised under the laws of this state;
(vi) Any security issued or guaranteed by any railroad, othercommon carrier, public utility, or holding company which is:
(A) Subject to the jurisdiction of the interstate commercecommission;
(B) A registered holding company under the Public UtilityHolding Company Act of 1935 or a subsidiary of such a company within themeaning of that act;
(C) Regulated in respect of its rates and charges by agovernmental authority of the United States or any state; or
(D) Regulated in respect of the issuance or guarantee of thesecurity by a governmental authority of the United States, any state, Canada,or any Canadian province.
(vii) Any security listed or approved for listing upon notice ofissuance on the New York stock exchange, the American stock exchange or theNational Association of Securities Dealers Automated Quotation National MarketSystem (NASDAQ/NMS), the Chicago board options exchange or any other exchangeor national quotation system that the secretary of state may designate by ruleor order; any other security of the same issuer which is of senior orsubstantially equal rank; any security called for by subscription rights orwarrants so listed or approved; or any warrant or right to purchase orsubscribe to any of the foregoing; or any security which meets all of thefollowing conditions:
(A) If the issuer is not organized under the laws of the UnitedStates or a state, it has appointed a duly authorized agent in the UnitedStates for service of process and has set forth the name and address of suchagent in its prospectus;
(B) A class of the issuer's securities shall be registeredunder Section 12 of the Securities Exchange Act of 1934 and has been soregistered for three (3) years immediately preceding the offering date;
(C) Neither the issuer nor a significant subsidiary has had amaterial default during the lesser of the last seven (7) years or the issuer'sexistence in the payment of principal, interest, dividend or sinking fundinstallment on preferred stock or indebtedness or rentals under leases withterms of three (3) years or more. A "material default" is a failureto pay, the effect of which is to cause indebtedness to become due prior to itsstated maturity or to cause termination or reentry under a lease prior to itsstated expiration, if the indebtedness or the rental obligation for theunexpired term exceeds five percent (5%) of the issuer's (and its consolidatedsubsidiaries) total assets, or if the arrearage in required dividend paymentson preferred stock is not satisfied within thirty (30) days;
(D) The issuer has had consolidated net income (beforeextraordinary items and the cumulative effect of accounting changes) of atleast one million dollars ($1,000,000.00) in four (4) of its last five (5)fiscal years, including its last fiscal year. In the case of interest-bearingdebt securities, such net income for the issuer's last fiscal year beforedepreciation and taxes, shall be one and one-half (1 1/2) times the issuer'sannual interest expense, giving effect to the proposed offering and theintended use of proceeds. "Last fiscal year" means the most recentfiscal year for which audited financial statements are available, provided thatsuch statements cover a fiscal period ended not more than fifteen (15) monthsfrom th