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This entry was published on 2014-09-22
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Registration of intra-state offerings
General Business (GBS) CHAPTER 20, ARTICLE 23-A
§ 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

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.