Ark. Code Ann. » Title 23 Chapter 42
Arkansas Code Annotated

Ark. Code Ann. § 23-42-405 (2026)

Stop order denying, suspending, or revoking registration statement

✓ current as of May 2026
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  1. 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
      1. 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:
        1. The registration statement or an earlier date from an order denying the effective date of the registration statement;
        2. An amendment under § 23-42-404(n); or
        3. A report under § 23-42-404(m);
      2. 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:
        1. The person filing the registration statement;
        2. 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
        3. Any underwriter;
      3. 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:
        1. 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
        2. 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;
      4. The issuer's enterprise or method of business includes or would include activities which are illegal where performed;
      5. 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;
      6. 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;
      7. When a security is sought to be registered by notification, it is not eligible for such a registration;
      8. 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
      9. 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.
  2. 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.
    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.
  4. 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.
  5. 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.

History. Acts 1959, No. 254, § 12; 1971, No. 131, §§ 2, 3; 1985, No. 939, § 4; A.S.A. 1947, § 67-1246; Acts 1995, No. 845, § 24; 2011, No. 339, §§ 12, 13.

Amendments. The 2011 amendment rewrote the introductory paragraph of (a)(2)(A) and inserted (a)(2)(A)(i) through (iii); and substituted “(a)(2)(C)” for “(a)(1)(C)” in (a)(2)(C)(i).

Subchapter 5 — Regulation of Transactions

Effective Dates. Acts 1959, No. 254, § 30: July 1, 1959.

Acts 1961, No. 248, § 11: July 1, 1961.

Acts 1971, No. 131, § 9: Feb. 22, 1971. Emergency clause provided: “It is hereby found and determined by the General Assembly that the field of securities has become exceedingly complex and is in need of stricter regulation to assure that the purchasers of securities receive the protection that they deserve; that it is necessary for the Securities Commissioner to have the authority to immediately issue a stop order denying, suspending or revoking the effectiveness of a registration statement under certain conditions; that the penalty for violation of the Securities Act should be increased to discourage further violations and to curtail the total number of violations; and that only by the immediate passage of this Act can this be achieved. Therefore, an emergency is declared to exist and this Act being necessary for the immediate preservation of the public peace, health and safety shall become effective from and after its passage and approval.”

Acts 1973, No. 47, § 20: Feb. 1, 1973. Emergency clause provided: “It is hereby found and determined by the General Assembly that the field of securities is in need of stricter regulation to assure the public that they receive the protection they deserve; that the fee for filing a registration statement is inadequate; that there is a need for immediate clarification of certain portions of the Securities Act; that the penalty for violation of the Securities Act should be increased to discourage further violations and to deter the total number of violations and that only by the immediate passage of this Act can this be achieved; therefore an emergency is declared to exist and this Act being necessary for the immediate preservation of the public peace, health and safety shall become effective from and after its passage and approval.”

Acts 1975, No. 697, § 4: Apr. 3, 1975. Emergency clause provided: “It is hereby found and determined by the General Assembly that existing laws determining the interrelationship between the Arkansas Securities Act and the Arkansas Savings and Loan Act are unclear; and that the Arkansas Securities Commissioner acting as Securities Commissioner and also as Arkansas Savings and Loan Supervisor must have a clarification of his authority in each area; and that therefore an emergency exists and this Act being necessary for the immediate preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1975, No. 844, § 16: Apr. 4, 1975. Emergency clause provided: “It has been found and is hereby declared by the General Assembly that the filing fees are inadequate; that exemptions are necessary for certain types of securities; that there is a need for immediate clarification of certain portions of the Securities Act; therefore, an emergency is hereby declared to exist and this Act being necessary for the immediate preservation of the public peace, health and safety shall become effective from and after its passage and approval.”

Acts 1977, No. 493, § 21: Mar. 18, 1977. Emergency clause provided: “It has been found and is hereby declared by the General Assembly that securities transactions always involve a relationship of trust and usually involve fiduciary obligations. This relationship facilitates the cover-up of felonies committed under the securities laws. This act being necessary for the protection of the health, safety and welfare of the citizens of this State, it is effective from and after its passage and approval, and it applies to all schemes or courses of conduct continuing past its effective date; therefore, an emergency is hereby declared to exist and this Act being necessary for the immediate preservation of the public peace, health and safety shall become effective from and after its passage and approval.”

Acts 1983, No. 836, § 29: Mar. 25, 1983. Emergency clause provided: “It has been found and is hereby declared by the General Assembly that the ability of the State of Arkansas to become part of a national Central Registration Depository System will be beneficial to the citizens of the State and applicants for registration and provide substantial cost savings to the securities industry and that Arkansas' entry into the system is scheduled to be soon. This Act being necessary for the additional protection and savings for the citizens of this State which will be afforded by entry into the System, it is effective from and after its passage and approval; therefore, an emergency is hereby declared to exist and this Act being necessary for the immediate preservation of the public peace, health and safety shall become effective from and after its passage and approval.”

Acts 1985, No. 939, § 12: Apr. 15, 1985. Emergency clause provided: “It is hereby found and determined by the General Assembly that the occurrence of new types of securities being made available to investors in combination with the proliferation of unregulated security advisors offering their services to the investing public indicate an immediate need for additional regulatory scrutiny of the securities and the practice of offering security advice; that this Act grants the Securities Commissioner the necessary flexibility to deal with these situations and should be given immediate effect in order to adequately protect the citizens of the State of Arkansas. Therefore, an emergency is hereby declared to exist, and this Act being immediately necessary for the preservation of the public peace, health and safety shall be in full force and effect from and after its passage and approval.”

Acts 1987, No. 776, § 5: Apr. 7, 1987. Emergency clause provided: “It has been found and it is declared by the General Assembly that an urgent need exists to define the term “farm cooperative” in order to clarify which organizations are eligible for an exemption from registration under the Arkansas Securities Act (Act No. 254 of the Acts of Arkansas of 1959), as amended, of certain securities issued by farm cooperatives, and that immediate passage of this Act is necessary to provide such clarification. Therefore, an emergency is declared to exist and this Act, being necessary for the preservation of the public peace, health and safety, shall take effect and be in force from the date of its approval.”

Acts 1993, No. 1147, § 1705. Jan. 1, 1994.

Research References

Am. Jur. 69 Am. Jur. 2d, Secur. Reg. St., §§ 11-14 and § 69 et seq.

Ark. L. Rev.

Proxy and Insider-Trading Regulation: Federal-State Cooperation in the Protection of Investors, 19 Ark. L. Rev. 308.

Securities Regulation — Texas Gulf Sulphur — A Few Aspects, 23 Ark. L. Rev. 145.

C.J.S. 79 C.J.S. Supp., Secur. Reg., § 208 et seq.

U. Ark. Little Rock L.J.

Survey of Arkansas Law: Business Organizations, 6 U. Ark. Little Rock L.J. 83.

Legislation of the 1983 General Assembly, Business Law, 6 U. Ark. Little Rock L.J. 607.