CHAPTER 71

An Act to amend and reenact § 13.1-518 of the Code of Virginia, relating
to when the State Corporation Commission may issue stop orders of
registration of securities; and to amend the Code of Virginia by ad-
ding a section numbered 13.1-514.1, to exempt certain securities from
registration requirements.

[S 51]

Approved February 24, 1960

Be it enacted by the General Assembly of Virginia:

1. That § 13.1-513 of the Code of Virginia be amended and reenacted, and
that the Code of Virginia be amended by adding a section numbered
13.1-514.1, as follows:

§ 13.1-513. (a) The Commission may issue a stop order denying
effectiveness to, or revoking the effectiveness of, any registration state-
ment if it finds that such an order is in the public interest and that:

(1) The registration statement together with any amendments, or
any report filed by the registrant or any other document filed in connection
with the registration statement contained any statement which was, at the
time and in the circumstances in which it was made, false or misleading
with respect to any material fact or omitted to state any material fact
required to be stated therein;

(2) The applicant or registrant or any agent, partner, officer or direc-
tor of the applicant or registrant (or any person occupying a similar status
or performing similar functions) or any person directly or indirectly
controlling or controlled by the applicant or registrant has violated, in
connection with the offering, any provision of this chapter or of any other
law applicable to the offering, or any rule, order or condition lawfully
Imposed under this chapter;

(3) Any person specified in clause (2) has failed to furnish any
information lawfully requested by the Commission;

(4) The right to sell the securities which are the subject of the
registration statement has been denied or revoked or is suspended under
any federal act applicable to the offering (and such denial, revocation or
suspension is still in effect) ;

(5) The issuer is insolvent, either in the sense that its liabilities exceed
its assets or in the sense that it cannot meet its obligations as they mature;

(6) The issuer’s business includes or probably will include activities
which are forbidden by law;

(7) The offering has worked or tended to work a fraud upon
investors or probably will so operate; or

(8) Where a security is to be or has been registered by notification, it
is not eligible for such registration.

(b) No stop order shall be entered without reasonable notice to the
applicant or registrant.

(c) In any proceeding under this section, the Commission may refrain
from issuing or, after issuing, may revoke a stop order on condition that
the persons against whom it is directed correct the matters complained of
on which it is based.

§ 13.1-514.1. The Commission may by order exempt from the other
provisions of this chapter any security that the Commission finds

(1) is to be offered and sold as part of a community undertaking to
attract new business or industry to the community,

(2) is sponsored by the local chamber of commerce, by a local indus-
trial development corporation or by other groups of representative local
businessmen, and
(3) 18 to be sold mainly to persons interested in the development of the
community by salesmen who recetve no compensation for offering and sell-
ang the security.