J. MILLARD TAWES, Governor 17

fied in subsection (b), with respect to the additional securities
proposed to be offered.

§ 24. Denial, Suspension, and Revocation of Registration.

(a) The Commissioner may issue a stop order denying effective-
ness to, or suspending or revoking the effectiveness of, any registra-
tion statement if he finds (1) that the order is in the public interest
and (2) that

(A) the registration statement as of its effective date or as of any
earlier date in the case of an order denying effectiveness, or any
amendment under section 23 (h) as of its effective date, or any
report under section 23 (g) is incomplete in any material respect
or contains any statement which was, in the light of the circum-
stances under which it was made, false or misleading with respect
to any material fact;

(B) any provision of this act or any rule, order, or condition law-
fully imposed under this act has been willfully violated, in connection
with the offering, by (i) the person filing the registration statement,
(ii) the issuer, any partner, officer, or director of the issuer, 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 or indirectly controlled by or acting for the issuer, or (iii)
any underwriter;

(C) the security registered or sought to be registered is the subject
of an administrative stop order 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

(i) the Commissioner may not institute a proceeding against an
effective registration statement under clause (C) more than one year
from the date of the order or injunction relied on, and (ii) he may
not enter an order under clause (C) on the basis of an order or injunc-
tion entered under any other state act unless that order or injunction
was based on facts which would currently constitute a ground for a
stop order under this section;

(D) the issuer's enterprise or method of business includes or would
include activities which are illegal where performed;

(E) the offering has worked or tended to work a fraud upon
purchasers or would so operate;

(F) when a security is sought to be registered by notification, it
is not eligible for such registration;

(G) when a security is sought to be registered by coordination,
there has been a failure to comply with the undertaking required by
section 21 (b) (4); or

(H) the applicant or registrant has failed to pay the proper filing
fee; but the Commissioner may enter only a denial order under this
clause and he shall vacate any such order when the deficiency has been
corrected.

The Commissioner may not institute a stop-order proceeding against
an effective registration statement on the basis of a fact or transac-