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.
Last modified: February 3, 2019