N.Y. General Business Law § 359-ff: Registration of intra-state offerings

§ 359-ff. Registration of intra-state offerings. 1. It is unlawful for

any person, directly or indirectly, to offer or sell any security which

is part of an issue offered and sold only to persons resident within

this state unless an offering prospectus which makes full and fair

disclosure of all material facts is first filed by the issuer of such

security with the department of law. Such offering prospectus shall

include, without limitation, a description of the securities offered and

terms of the offering, the nature of the issuer's business, the purpose

of the offering and the application of the proceeds thereof by the

issuer, background of management, and pending material litigation. Such

offering prospectus shall also include (i) the issuer's profit and loss

statements for its three fiscal years (or such lesser number of fiscal

years during which the issuer has been in existence) immediately

preceding the date of filing, (ii) if such latest fiscal year ended more

than one hundred twenty days prior to the date of filing, a profit and

loss statement for a period from the end of such latest fiscal year to a

date within one hundred twenty days prior to the date of filing, and

(iii) the issuer's balance sheet as of the end of the last such fiscal

year and as of the end of such additional period, if any, for which a

profit and loss statement has been filed, all of which profit and loss

statements and balance sheets shall be prepared in accordance with

generally accepted accounting principles. Such offering prospectus shall

be lawful for use in connection with the offer and sale of such

securities from and after the fifteenth day following such filing unless

prior thereto the attorney general shall notify the person making such

filing by letter indicating the respects in which the offering

prospectus fails to make adequate disclosure. No offer or sale of any

such security shall be made by any person unless prior to or at the time

thereof there shall have been delivered to the purchaser an offering

prospectus lawful for use under the provisions of this section.

2. The attorney general is hereby authorized and empowered to adopt

suitable rules and regulations to carry out the provisions of this

section, including regulations applicable to the method, contents and

filing procedures with respect to the prospectus required by subdivision

one and the making of amendments thereto, and the use of advertising

material.

The attorney general is also hereby authorized and empowered to adopt

suitable rules and regulations requiring the issuer of any security sold

pursuant to an offering prospectus under this section to maintain

accurate books and records of account and to furnish to investors and to

the department of law annual reports containing financial statements

prepared in accordance with generally accepted accounting principles;

provided, however, that no such rules and regulations shall apply to any

issuer required to file reports pursuant to section 13 or 15 of the

securities exchange act of 1934, as amended.

3. The attorney general is hereby authorized and empowered to exempt

by rule, regulation or order any person, security or transaction or any

class or classes of persons, securities or transactions from any

provision of this section or of any rule or regulation thereunder if the

attorney general finds that such action is not inconsistent with the

public interest or the protection of investors.

4. A "person" shall mean an individual person, firm, corporation,

partnership, limited partnership, trust, syndicate or association, but

shall not include a bank as defined in this article.

5. This section shall not be applicable to offerings or sales of

securities (a) with respect to which offerings a registration statement

has been filed, and with respect to which sales a registration statement

has become effective, with the United States securities and exchange

commission pursuant to the securities act of 1933, as amended; (b) with

respect to which a registration statement is not required to be filed

under said act or the rules and regulations thereunder for reasons other

than the exemption contained in section 3 (a) (11) of said act; (c) of

an issuer any class of whose securities are registered under the

securities exchange act of 1934, as amended; (d) subject to the

provisions of section three hundred fifty-two-e or article twenty-six-A

of the general business law; (e) described in section three hundred

fifty-nine-f, subdivision l, paragraphs (d), (l) and (m) of the general

business law; or (f) which constitutes an insurance or endowment policy

or annuity contract or interest or participation therein, whether

payable in fixed or variable dollar amounts or both, issued by an

institution subject to the supervision of the superintendent of

financial services of this state.

6. A non-returnable fee of one-half of one percent of the maximum

aggregate offering price at which the total of all securities to be

offered pursuant to an offering prospectus filed under subdivision one

hereof shall be payable to the department of law at the time of each

filing, but the fee shall in no case be less than twenty-five dollars or

more than fifteen hundred dollars.

7. The provisions of the following sections of this article

twenty-three-A shall be fully applicable to intrastate offerings

described in subdivision one of this section; section three hundred

fifty-two; section three hundred fifty-two-b; section three hundred

fifty-two-c; section three hundred fifty-two-d; sections three hundred

fifty-four through three hundred fifty-nine-b; section three hundred

fifty-nine-e; subdivision two of section three hundred fifty-nine-f and

sections three hundred fifty-nine-g and three hundred fifty-nine-h.