Rule 590-4-2-.06 - Disqualification from Use of Exemption(1) No exemption under Section 10-5-11(14) of the Act, the Georgia ULOE or the Invest Georgia Exemption shall be available for any Offering if the issuer; any predecessor of the issuer; any affiliate of the issuer; any member of the board of directors, officer, general partner, limited liability company manager or managing member of the issuer; or any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of securities pursuant to the Offering: (a) Has filed a registration statement which is the subject of any pending proceeding or examination under Section 8 of the Securities Act of 1933, or has been the subject of any refusal order or stop order thereunder within five (5) years prior to the Offering;(b) Is subject to any pending proceeding under SEC Rule 258 promulgated under the Securities Act of 1933, or any similar section adopted under Section 3(b) of the Securities Act of 1933, or to an order entered thereunder within five (5) years prior to the Offering;(c) Has been convicted within five (5) years prior to the Offering of any felony or misdemeanor in connection with the purchase or sale of any security or involving the making of any false filing related to the offer or sale of any security;(d) Is subject to any order, judgment, or decree of any court of competent jurisdiction or regulatory authority (including non-U.S. regulatory authorities) temporarily or preliminarily restraining or enjoining, or is subject to any order, judgment or decree of any court of competent jurisdiction or regulatory authority entered within five (5) years prior to the Offering permanently restraining or enjoining, such person from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security or involving the making of any false filing related to the offer or sale of any security; or(e) Is subject to a United States Postal Service false representation order entered under § 39 U.S.C. 3005 within five (5) years prior to the Offering, or is subject to a temporary restraining order or preliminary injunction entered under § 39 U.S.C. 3007 with respect to conduct alleged to have violated § 39 U.S.C. 3005.(2) Paragraph (1) of this section shall not apply:(a) Upon a showing of good cause and without prejudice to any other action by the Commissioner, if the Commissioner determines that it is not necessary under the circumstances that an exemption be denied; and(b) If the issuer establishes that it did not know, and in the exercise of reasonable care could not have known, that a disqualification existed under paragraph (1) of this section. An issuer will not be able to establish that it has exercised reasonable care unless it has made factual inquiry into whether any disqualifications exist. The nature and scope of the requisite inquiry will vary based on the circumstances of the issuer and the other offering participants.(3) This Rule shall apply to all Offerings in which any sale is made within, or to any person in, the State of Georgia on or after the thirtieth (30th) day following the date of adoption hereof.(4) For purposes of paragraph (a) of this Section, events relating to any Affiliate Of the issuer that occurred before the affiliation arose will not be considered disqualifying if the affiliated entity is not:(a) In control of the issuer; or(b) Under common control with the issuer by a third party that was in control of the affiliated entity at the time of such events.Ga. Comp. R. & Regs. R. 590-4-2-.06
O.C.G.A. Secs. 10-5-3, 10-5-10, 10-5-11, 10-5-13, 10-5-70.
Original Rule entitled "Consent to Serve" adopted. F. and eff. July 19, 1965.Amended: ER. 590-4-2-0.5-.06 repealing Rule adopted. F. and eff. April 1, 1974, the date of adoption.Amended: New Rule entitled "Exemption from Principal's Exam" adopted. F. July 5, 1974; eff. July 25, 1974.Repealed: New Rule entitled "Dual Registration" adopted. F. Dec. 9, 1980; eff. Dec. 29, 1980.Repealed: New Rule of same title adopted. F. Apr. 13, 1983; eff. May 3, 1983.Amended: F. Feb. 24, 1987; eff. Mar. 16, 1987.Amended: F. Sept. 27, 1990; eff. Oct. 17, 1990.Repealed: New Rule entitled "Examinations" adopted. F. Dec. 21, 2004; eff. Jan. 10, 2005. Repealed: New Rule entitled "Disqualification from Use of Exemption" adopted. F. Nov. 18, 2011, Dec. 8, 2011.