HAR §16-38-24. Disqualification

(a) Any person who is disqualified from using any provision of Regulation D, 17 CFR section 230, of the Securities Act by the SEC shall not qualify for any of the exemptions under this subchapter. (b) No exemption under this subchapter shall be used if any person or parties of interest: (1) Has filed a registration statement which is the subject of a currently effective stop order entered by any state within five years prior to the commencement of the offering; (2) Has been convicted within five years prior to the commencement of the offering of any felony or misdemeanor in connection with an offer or sale of any security; (3) Has been convicted within five years prior to the commencement of the offering of any felony or misdemeanor involving fraud or deceit, including but not limited to forgery, embezzlement, obtaining money under false pretenses, larceny, or conspiracy to defraud; (4) Is currently subject to any state's administrative order or judgment which prohibits the use of any exemption from registration in connection with the purchase or sale of securities; (5) Is currently subject to any state's administrative order or judgment entered by that state's security administrator or commissioner within five years prior to the commencement of the offering or is subject to any state's administrative order or judgment in which fraud or deceit, including but not limited to making untrue statements of material facts or omitting to state material facts, was found and the order or judgment was entered within five years prior to the commencement of the offering; or (6) Is currently subject to any order, judgment, or decree of any court of competent jurisdiction temporarily or preliminarily restraining or enjoining, or is subject to any order, judgment, or decree of any court of competent jurisdiction, entered within five years prior to the commencement of the offering, permanently restraining or enjoining the person from engaging in or continuing any conduct or practice in §16-38-24 38-44 connection with the offer or sale of any security or involving the making of any false filing with any state. Paragraphs (1), (2), (3), (5), and (6) shall not apply if the person or party subject to the disqualifying order, judgment, or decree is duly licensed or registered to conduct securities related business in the state in which the order, judgment, or decree was entered against the person or party. (c) Any disqualification caused by this section shall be automatically waived if the federal or state agency which created the basis for disqualification determines upon a showing of good cause that it is not necessary under the circumstances that the exemptions be denied. [Eff and comp 10/12/85; am and comp 4/14/03] (Auth: HRS §485-2) (Imp: HRS §485-6)