(a) The Securities Commissioner may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any registration statement if he or she finds that:

(1) The order is in the public interest; and

(2) (A) The registration statement is incomplete in any material respect or contains any statement that was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact as of the effective date of:

(i) The registration statement or an earlier date from an order denying the effective date of the registration statement;

(ii) An amendment under § 23-42-404(n); or

(iii) A report under § 23-42-404(m);

(B) Any provision of this chapter or any rule, order, or condition lawfully imposed under this chapter 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 a court of competent jurisdiction entered under any other federal or state act applicable to the offering, but:

(i) The commissioner shall not institute a proceeding against an effective registration statement under this subdivision (a)(2)(C) more than one (1) year from the date of the order or injunction relied on; and

(ii) The commissioner shall not enter an order under this subdivision (a)(2)(C) on the basis of an order or injunction entered under another state act unless that order or injunction was based on facts that would currently constitute grounds 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, or any aspect of the offering is substantially unfair, unjust, inequitable, or oppressive;

(F) The offering has been or would be made with unreasonable amounts of underwriters' and sellers' discounts, commissions, or other compensation, unreasonable amounts of promoters' profits or participation, or unreasonable amounts or kinds of options;

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

(H) When a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by § 23-42-402(b)(4); or

(I) The applicant or registrant has failed to pay the proper filing fee. The commissioner may enter only a denial order under this subdivision (a)(2)(I), and he or she shall vacate any such order when the deficiency has been corrected.

(b) The commissioner may not institute a stop order proceeding against an effective registration statement on the basis of a fact or transaction known to him or her when the registration statement became effective unless the proceeding is instituted within the next thirty (30) days.

(c)

(1) The commissioner may, by order, summarily postpone or suspend the effectiveness of the registration statement pending final determination of any proceeding under this section.

(2) Upon the entry of the order, the commissioner shall promptly notify each person specified in subsection (d) of this section that it has been entered and the reasons therefor and that within fifteen (15) days after the receipt of a written request the matter will be set down for hearing.

(3) If no hearing is requested and none is ordered by the commissioner, the order will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after notice of an opportunity for hearing to each person specified in subsection (d) of this section, may modify or vacate the order or extend it until final determination.

(4) In the case of a registration by coordination pursuant to § 23-42-402, the commissioner may accept a waiver of concurrent effectiveness submitted by the issuer, without the necessity of the entry of an order to summarily postpone effectiveness.

(d) No stop order may be entered under any part of this section except subdivision (c)(1) of this section without:

(1) Appropriate prior notice to the applicant or registrant, the issuer, and the person on whose behalf the securities are to be or have been offered;

(2) Opportunity for hearing; and

(3) Written findings of fact and conclusions of law.

(e) The commissioner may vacate or modify a stop order if he or she finds that the conditions which prompted its entry have changed or that it is otherwise in the public interest to do so.