517.03 Rulemaking; immunity for acts in conformity with rules.
517.051 Exempt securities.
517.061 Exempt transactions.
517.0611 The Florida Limited Offering Exemption.
517.0612 Florida Invest Local Exemption.
517.0613 Failure to comply with a securities registration exemption.
517.0614 Integration of offerings.
517.0615 Solicitations of interest.
517.0616 Disqualification.
517.07 Registration of securities.
517.072 Viatical settlement investments.
517.075 Cuba, prospectus disclosure of doing business with, required.
517.081 Registration procedure.
517.082 Registration by notification; federal registration statements.
517.101 Consent to service.
517.111 Revocation or denial of registration of securities.
517.12 Registration of dealers, associated persons, intermediaries, and investment advisers.
517.1201 Notice filing requirements for federal covered advisers.
517.1202 Notice-filing requirements for branch offices.
517.1205 Registration of associated persons specific as to securities dealer, investment adviser, or federal covered adviser identified at time of registration approval.
517.121 Books and records requirements; examinations.
517.1214 Continuing education requirements for associated persons of investment advisers and federal covered advisers.
517.1215 Requirements, rules of conduct, and prohibited business practices for investment advisers and their associated persons.
517.1217 Rules of conduct and prohibited business practices for dealers and their associated persons and for intermediaries.
517.122 Arbitration.
517.131 Securities Guaranty Fund.
517.141 Payment from the fund.
517.151 Investments of the fund.
517.161 Revocation, denial, or suspension of registration of dealer, investment adviser, intermediary, or associated person.
517.1611 Guidelines.
517.171 Burden of proof.
517.191 Enforcement by the Office of Financial Regulation; enforcement by Attorney General.
517.021 Definitions.—When used in this chapter, unless the context otherwise indicates, the following terms have the following respective meanings:
(1) “Accredited investor” shall be defined by rule of the commission in accordance with Securities and Exchange Commission Rule 501, 17 C.F.R. s. 230.501, as amended.
(2) “Affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with an applicant or registrant.
(3) “Angel investor group” means a group of accredited investors who hold regular meetings and have defined processes and procedures for making investment decisions, individually or among the membership of the group, and who are not associated persons, affiliates, or agents of a dealer or investment adviser.
(4) “Associated person” means:
(a)1. With respect to a dealer, a natural person who is employed, appointed, or authorized by a dealer and who represents the dealer in effecting or attempting to effect purchases or sales of securities.
2. The term does not include the following:
a. A dealer.
b. A partner, an officer, or a director of a dealer or a person having a similar status or performing similar functions as a dealer, unless such person is specified in subparagraph 1.
c. A dealer’s employee whose function is only clerical or ministerial.
d. A person whose transactions in this state are limited to those transactions described in s. 15(i)(3) of the Securities Exchange Act of 1934, as amended.
(b)1. With respect to an investment adviser, a natural person, including, but not limited to, a partner, an officer, a director, or a branch manager, or a person occupying a similar status or performing similar functions, who:
a. Is employed by or associated with, or is subject to the supervision and control of, an investment adviser registered or required to be registered under this chapter; and
b. Does any of the following:
(I) Makes any recommendation or otherwise gives investment advice regarding securities.
(II) Manages accounts or portfolios of clients.
(III) Determines which recommendations or advice regarding securities should be given.
(IV) Receives compensation to solicit, offer, or negotiate for the sale of investment advisory services.
(V) Supervises employees who perform a function under this sub-subparagraph.
2. The term does not include the following:
a. An investment adviser.
b. An employee whose function is only clerical or ministerial.
(c) With respect to a federal covered adviser, a natural person who is an investment adviser representative and who has a place of business in this state, as such terms are defined in Rule 203A-3 of the Securities and Exchange Commission adopted under the Investment Advisers Act of 1940, as amended.
(5) “Boiler room” means an enterprise in which two or more persons in a common scheme or enterprise solicit potential investors through telephone calls, e-mail, text messages, social media, chat rooms, or other electronic means.
(6) “Branch office” means any location in this state of a dealer or investment adviser at which one or more associated persons regularly conduct the business of rendering investment advice or effecting any transactions in, or inducing or attempting to induce the purchase or sale of, any security or any location that is held out as such. The commission may adopt by rule exceptions to this definition for dealers in order to maintain consistency with the definition of a branch office used by self-regulatory organizations authorized by the Securities and Exchange Commission, including, but not limited to, the Financial Industry Regulatory Authority. The commission may adopt by rule exceptions to this definition for investment advisers.
(7) “Business entity” means any corporation, partnership, limited partnership, limited liability company, proprietorship, firm, enterprise, franchise, association, self-employed individual, or trust, which may or may not be fictitiously named, doing business in this state.
(8) “Commission” means the Financial Services Commission.
(9) “Control,” including the terms “controlling,” “controlled by,” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract, or otherwise.
(10)(a) “Dealer” includes, unless otherwise specified, a person, other than an associated person of a dealer, that engages, for all or part of the person’s time, directly or indirectly, as agent or principal in the business of offering, buying, selling, or otherwise dealing or trading in securities issued by another person.
(b) The term “dealer” does not include any of the following:
1. A licensed practicing attorney who renders or performs any such services in connection with the regular practice of the attorney’s profession.
2. A bank authorized to do business in this state, except nonbank subsidiaries of a bank.
3. A trust company having trust powers that it is authorized to exercise in this state, which renders or performs services in a fiduciary capacity incidental to the exercise of its trust powers.
4. A wholesaler selling exclusively to dealers.
5. A person buying and selling for the person’s own account exclusively through a registered dealer or stock exchange.
6. An issuer.
7. A natural person representing an issuer in the purchase, sale, or distribution of the issuer’s own securities if such person:
a. Is an officer, a director, a limited liability company manager or managing member, or a bona fide employee of the issuer;
b. Has not participated in the distribution or sale of securities for any issuer for which such person was, within the preceding 12 months, an officer, a director, a limited liability company manager or managing member, or a bona fide employee;
c. Primarily performs, or is intended to perform at the end of the distribution, substantial duties for, or on behalf of, the issuer other than in connection with transactions in securities; and
d. Does not receive a commission, compensation, or other consideration for the completed sale of the issuer’s securities apart from the compensation received for regular duties to the issuer.
(11) “Federal covered adviser” means a person that is registered or required to be registered under s. 203 of the Investment Advisers Act of 1940, as amended. The term does not include any person that is excluded from the definition of investment adviser under subparagraphs (16)(b)1.-7. and 9.
(12) “Federal covered security” means a security that is a covered security under s. 18(b) of the Securities Act of 1933, as amended, or rules and regulations adopted thereunder.
(13) “Guarantor” means a person that agrees in writing, or that holds itself out to the public as agreeing, to pay the indebtedness of another when due, including, without limitation, payments of principal and interest on a bond, debenture, note, or other evidence of indebtedness, without resort by the holder to any other obligor, whether or not such writing expressly states that the person signing is signing as a guarantor. The obligation of a guarantor hereunder shall be a continuing, absolute, and unconditional guaranty of payment, without regard to the validity, regularity, or enforceability of the underlying indebtedness.
(14) “Guaranty” means an agreement in writing in which one party either agrees, or holds itself out to the public as agreeing, to pay the indebtedness of another when due, including, without limitation, payments of principal and interest on a bond, debenture, note, or other evidence of indebtedness, without resort by the holder to any other obligor, whether or not such writing expressly states that the person signing is signing as a guarantor. An agreement that is not specifically denominated as a guaranty shall nevertheless constitute a guaranty if the holder of the underlying indebtedness or the holder’s representative or trustee has the right to sue to enforce the guarantor’s obligations under the guaranty. Words of guaranty or equivalent words that otherwise do not specify guaranty of payment create a presumption that payment, rather than collection, is guaranteed by the guarantor. Any guaranty in writing is enforceable notwithstanding any statute of frauds.
(15) “Intermediary” means a natural person residing in this state or a corporation, trust, partnership, limited liability company, association, or other legal entity registered with the Secretary of State to do business in this state, which facilitates through its website the offer or sale of securities of an issuer with a principal place of business in this state.
(16)(a) “Investment adviser” means a person, other than an associated person of an investment adviser or a federal covered adviser, that receives compensation, directly or indirectly, and engages for all or part of the person’s time, directly or indirectly, or through publications or writings, in the business of advising others as to the value of securities or as to the advisability of investments in, purchasing of, or selling of securities.
(b) The term does not include any of the following:
1. A dealer or an associated person of a dealer whose performance of services in paragraph (a) is solely incidental to the conduct of the dealer’s or associated person’s business as a dealer and who does not receive special compensation for those services.
2. A licensed practicing attorney or certified public accountant whose performance of such services is solely incidental to the practice of the attorney’s or accountant’s profession.
3. A bank authorized to do business in this state.
4. A bank holding company as defined in the Bank Holding Company Act of 1956, as amended, authorized to do business in this state.
5. A trust company having trust powers, as defined in s. 658.12, which it is authorized to exercise in this state, which trust company renders or performs investment advisory services in a fiduciary capacity incidental to the exercise of its trust powers.
6. A person that renders investment advice exclusively to insurance or investment companies.
7. A person that, during the preceding 12 months, has fewer than six clients who are residents of this state. As used in this subparagraph, the term “client” has the same meaning as provided in Securities and Exchange Commission Rule 275.222-2, 17 C.F.R. s. 275.222-2, as amended.
8. A federal covered adviser.
9. The United States, a state, or any political subdivision of a state, or any agency, authority, or instrumentality of any such entity; a business entity that is wholly owned directly or indirectly by such a governmental entity; or any officer, agent, or employee of any such governmental or business entity who is acting within the scope of his or her official duties.
(17) “Issuer” means a person that proposes to issue, has issued, or shall hereafter issue any security. A person that acts as a promoter for and on behalf of a corporation, trust, partnership, limited liability company, association, or other legal entity of any kind to be formed shall be deemed an issuer.
(18) “Offer to sell,” “offer for sale,” or “offer” means an attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security, or an investment or interest in an investment, for value.
(19) “Office” means the Office of Financial Regulation of the commission.
(20) “Predecessor” means a person whose major portion of assets has been acquired directly or indirectly by an issuer.
(21) “Principal” means an executive officer of a corporation, partner of a partnership, sole proprietor of a sole proprietorship, trustee of a trust, or any other person with similar supervisory functions with respect to any organization, whether incorporated or unincorporated.
(22) “Promoter” includes the following:
(a) A person that, acting alone or in conjunction with one or more other persons, directly or indirectly takes the initiative in founding and organizing the business or enterprise of an issuer.
(b) A person that, in connection with the founding or organizing of the business or enterprise of an issuer, directly or indirectly receives in consideration of services or property, or both services and property, 10 percent or more of any class of securities of the issuer or 10 percent or more of the proceeds from the sale of any class of securities. However, a person that receives such securities or proceeds either solely as underwriting commissions or solely in connection with property shall not be deemed a promoter if such person does not otherwise take part in founding and organizing the enterprise.
(23) “Qualified institutional buyer” means a qualified institutional buyer, as defined in Securities and Exchange Commission Rule 144A, 17 C.F.R. s. 230.144A(a), under the Securities Act of 1933, as amended, or any foreign buyer that satisfies the minimum financial requirements set forth in such rule.
(24) “Sale” or “sell” means a contract of sale or disposition of an investment, security, or interest in a security, for value. With respect to a security or interest in a security, the term does not include preliminary negotiations or agreements between an issuer or any person on whose behalf an offering is to be made and any underwriter or among underwriters who are or are to be in privity of contract with an issuer. Any security given or delivered with, or as a bonus on account of, any purchase of securities or any other thing shall be conclusively presumed to constitute a part of the subject of such purchase and to have been offered and sold for value. Every sale or offer of a warrant or right to purchase or subscribe to another security of the same or another issuer, as well as every sale or offer of a security which gives the holder a present or future right or privilege to convert into another security or another issuer, is considered to include an offer of the other security.
(25) “Security” includes any of the following:
(a) A note.
(b) A stock.
(c) A treasury stock.
(d) A bond.
(e) A debenture.
(f) An evidence of indebtedness.
(g) A certificate of deposit.
(h) A certificate of deposit for a security.
(i) A certificate of interest or participation.
(j) A whiskey warehouse receipt or other commodity warehouse receipt.
(k) A certificate of interest in a profit-sharing agreement or the right to participate therein.
(l) A certificate of interest in an oil, gas, petroleum, mineral, or mining title or lease or the right to participate therein.
(m) A collateral trust certificate.
(n) A reorganization certificate.
(o) A preorganization subscription.
(p) A transferable share.
(q) An investment contract.
(r) A beneficial interest in title to property, profits, or earnings.
(s) An interest in or under a profit-sharing or participation agreement or scheme.
(t) An option contract that entitles the holder to purchase or sell a given amount of the underlying security at a fixed price within a specified period of time.
(u) Any other instrument commonly known as a security, including an interim or temporary bond, debenture, note, or certificate.
(v) A receipt for a security, or for subscription to a security, or a right to subscribe to or purchase any security.
(w) A viatical settlement investment.
(26) “Underwriter” means a person that has purchased from an issuer or an affiliate of an issuer with a view to, or offers or sells for an issuer or an affiliate of an issuer in connection with, the distribution of any security, or participates or has a direct or indirect participation in any such undertaking, or participates or has a participation in the direct or indirect underwriting of any such undertaking; except that a person is presumed not to be an underwriter with respect to any security which it has owned beneficially for at least 1 year; and, further, a dealer is not considered an underwriter with respect to any securities which do not represent part of an unsold allotment to or subscription by the dealer as a participant in the distribution of such securities by the issuer or an affiliate of the issuer; and, further, in the case of securities acquired on the conversion of another security without payment of additional consideration, the length of time such securities have been beneficially owned by a person includes the period during which the convertible security was beneficially owned and the period during which the security acquired on conversion has been beneficially owned.
(27) “Viatical settlement investment” means an agreement for the purchase, sale, assignment, transfer, devise, or bequest of all or any portion of a legal or equitable interest in a viaticated policy as defined in chapter 626.
517.03 Rulemaking; immunity for acts in conformity with rules.—
(1) The office shall administer and provide for the enforcement of all the provisions of this chapter. The commission may adopt rules pursuant to ss. 120.536(1) and 120.54 to implement the provisions of this chapter conferring powers or duties upon the office, including, without limitation, adopting rules and forms governing reports. The commission shall also have the nonexclusive power to define by rule any term, whether or not used in this chapter, insofar as the definition is not inconsistent with the provisions of this chapter.
(2) No provision of this chapter imposing liability shall apply to an act done, or omitted to be done, in conformity with a rule of the commission in existence at the time of the act or omission, even though such rule may thereafter be amended or repealed or determined by judicial or other authority to be invalid for any reason.
History.—s. 2, ch. 14899, 1931; CGL 1936 Supp. 6002(3); s. 1, ch. 59-423; s. 2, ch. 65-454; ss. 12, 35, ch. 69-106; s. 196, ch. 71-377; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 15, ch. 79-381; ss. 4, 5, ch. 80-254; ss. 2, 3, ch. 81-318; ss. 14, 15, ch. 90-362; s. 4, ch. 91-429; s. 179, ch. 98-200; s. 584, ch. 2003-261.
517.051 Exempt securities.—The exemptions provided herein from the registration requirements of s. 517.07 are self-executing and do not require any filing with the office prior to claiming such exemption. Any person who claims entitlement to any of these exemptions bears the burden of proving such entitlement in any proceeding brought under this chapter. The registration provisions of s. 517.07 do not apply to any of the following securities; however, such transactions are subject to s. 517.301:
(1) A security issued or guaranteed by the United States or any territory or insular possession of the United States, by the District of Columbia, or by any state of the United States or by any political subdivision or agency or other instrumentality thereof.
(a) Except as provided in paragraph (b), no person shall directly or indirectly offer or sell securities, other than general obligation bonds, described under this subsection if the issuer or guarantor is in default or has been in default any time after December 31, 1975, as to principal or interest:
1. With respect to an obligation issued by the issuer or successor of the issuer; or
2. With respect to an obligation guaranteed by the guarantor or successor of the guarantor,
except by an offering circular containing a full and fair disclosure as prescribed by rule of the commission.
(b) Paragraph (a) applies to a security that is an industrial or commercial development bond unless payments are made or unconditionally guaranteed by a person whose securities are exempt from registration under s. 18(b)(1) of the Securities Act of 1933, as amended.
(2) A security issued or guaranteed by any foreign government with which the United States is maintaining diplomatic relations at the time of the sale or offer of sale of the security, or by any state, province, or political subdivision thereof having the power of taxation or assessment, which security is recognized at the time it is offered for sale in this state as a valid obligation by such foreign government or by such state, province, or political subdivision thereof issuing the security.
(3) A security issued by and which represents or will represent an interest in or a direct obligation of, or be guaranteed by, any of the following:
(a) An international bank of which the United States is a member.
(b) A bank organized under the laws of the United States.
(c) A member bank of the Federal Reserve System.
(d) A depository institution, when a substantial portion of its business consists of or will consist of receiving deposits or share accounts that are insured to the maximum amount authorized by statute by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund.
(4) A security issued or guaranteed, as to principal, interest, or dividend, by a business entity owning or operating a railroad, another common carrier, or any other public service utility; provided that such business entity is subject to regulation or supervision whether as to its rates and charges or as to the issue of its own securities by a public commission, board, or officer of the government of the United States, of any state, territory, or insular possession of the United States, of any municipality located therein, of the District of Columbia, or of the Dominion of Canada or of any province thereof; also equipment securities based on chattel mortgages, leases, or agreements for conditional sale of cars, motive power, or other rolling stock mortgaged, leased, or sold to or furnished for the use of or upon such railroad or other public service utility corporation or where the ownership or title of such equipment is pledged or retained in accordance with the laws of the United States or of any state or of the Dominion of Canada to secure the payment of such equipment securities; and also bonds, notes, or other evidences of indebtedness issued by a holding corporation and secured by collateral consisting of any securities hereinabove described; provided, further, that the collateral securities equal in fair value at least 125 percent of the par value of the bonds, notes, or other evidences of indebtedness so secured.
(5) A security issued or guaranteed by any of the following which are subject to the examination, supervision, or control of this state or of the Federal Deposit Insurance Corporation or the National Credit Union Association:
(a) A bank,
(b) A trust company,
(c) A savings institution,
(d) A building or savings and loan association,
(e) An international development bank, or
(f) A credit union;
or the initial subscription for equity securities of any institution listed in paragraphs (a)-(f), provided such institution is subject to the examination, supervision, or control of this state.
(6) A security, other than common stock, providing for a fixed return, which security has been outstanding in the hands of the public for a period of not less than 5 years, and upon which security no default in payment of principal or failure to pay the fixed return has occurred for an immediately preceding period of 5 years.
(7) Securities of nonprofit agricultural cooperatives organized under the laws of this state when the securities are sold or offered for sale to persons principally engaged in agricultural production or selling agricultural products.
(8) Shares or other equity interests of a business entity which represent ownership or entitle the holders of such shares or other equity interests to possession and occupancy of specific apartment units in property owned by such business entity and organized and operated on a cooperative basis, solely for residential purposes.
(9) A member’s or owner’s interest in, or a retention certificate or like security given in lieu of a cash patronage dividend issued by, a not-for-profit membership entity operated either as a cooperative under the cooperative laws of a state or in accordance with the cooperative provisions of subchapter T of chapter 1 of subtitle A of the United States Internal Revenue Code, as amended, but not a member’s or owner’s interest, retention certificate, or like security sold or transferred to a person other than:
(a) A bona fide member of the not-for-profit membership entity; or
(b) A person who becomes a bona fide member of the not-for-profit membership entity at the time of or in connection with the sale or transfer.
(10) A security issued by a business entity organized and operated exclusively for religious, educational, benevolent, fraternal, charitable, or reformatory purposes and not for pecuniary profit, no part of the net earnings of which inures to the benefit of any private stockholder or individual, or any security of a fund that is excluded from the definition of an investment company under s. 3(c)(10)(B) of the Investment Company Act of 1940, as amended; provided that a person may not directly or indirectly offer or sell securities under this subsection except by an offering circular containing full and fair disclosure, as prescribed by the rules of the commission, of all material information, including, but not limited to, a description of the securities offered and terms of the offering, a description of the nature of the issuer’s business, a statement of the purpose of the offering and the intended application by the issuer of the proceeds thereof, and financial statements of the issuer prepared in conformance with United States generally accepted accounting principles. Section 6(c) of the Philanthropy Protection Act of 1995, Pub. L. No. 104-62, does not preempt any provision of this chapter.
(11) Any insurance or endowment policy or annuity contract or optional annuity contract or self-insurance agreement issued by a business entity, insurance company, reciprocal insurer, or risk retention group subject to the supervision of the insurance regulator or bank regulator, or any agency or officer performing like functions, of any state or territory of the United States or the District of Columbia.
517.061 Exempt transactions.—Except as otherwise provided in subsection (11), the exemptions provided herein from the registration requirements of s. 517.07 are self-executing and do not require any filing with the office before being claimed. Any person who claims entitlement to an exemption under this section bears the burden of proving such entitlement in any proceeding brought under this chapter. The registration provisions of s. 517.07 do not apply to any of the following transactions; however, such transactions are subject to s. 517.301:
(1)(a) Any judicial sale or any sale by an executor, an administrator, a guardian, or a conservator; any sale by a receiver or trustee in insolvency or bankruptcy; any sale by an assignee as defined in s. 727.103, with respect to an assignment as defined in that section; or any transaction incident to a judicially approved reorganization in which a security is issued in exchange for one or more outstanding securities, claims, or property interests.
(b) Except for a security exchanged in a case brought under Title 11 of the United States Code, a security issued in exchange for one or more bona fide outstanding securities, claims, or property interests, or partly in such exchange and partly for cash, if the terms and conditions of such issuance and exchange are approved:
1. By a court, an official or agency of the United States, a banking or insurance commission of a state or territory of the United States, or another governmental authority expressly authorized by law to grant such approval.
2. After a hearing upon the fairness of such terms and conditions and at which all persons to whom issuance of securities in such exchange is proposed have the right to appear.
(2) The issuance of notes or bonds in connection with the acquisition of real property or renewals thereof, if such notes or bonds are issued to the sellers of, and are secured by all or part of, the real property so acquired.
(3) A transaction involving a stock dividend or equivalent equity distribution, regardless of whether the business entity distributing the dividend or equivalent equity distribution is the issuer, if nothing of value is given by stockholders or other equity holders for the dividend or equivalent equity distribution other than the surrender of a right to a cash or property dividend in the event that each stockholder or other equity holder may elect to take the dividend or equivalent equity distribution in cash, property, or stock.
(4) A transaction under an offer to existing security holders of the issuer, including persons that at the date of the transaction are holders of convertible securities, options, or warrants, if a commission or other remuneration is not paid or given, directly or indirectly, for soliciting a security holder in this state.
(5) The issuance of securities to such equity security holders or creditors of a business entity in the process of a reorganization of such business entity, made in good faith and not for the purpose of evading this chapter, either in exchange for the securities of such equity security holders or claims of such creditors or partly for cash and partly in exchange for the securities or claims of such equity security holders or creditors.
(6) A transaction involving the distribution of the securities of an issuer to the security holders of another person in connection with a merger, consolidation, exchange of securities, sale of assets, or other reorganization to which the issuer, or the issuer’s parent or subsidiary, and the other person, or the person’s parent or subsidiary, are parties.
(7) The offer or sale of securities, solely in connection with the transfer of ownership of an eligible privately held company, through a merger and acquisition broker in accordance with s. 517.12(21).
(8) The offer or sale of securities under a bona fide employee stock purchase, savings, option, profit-sharing, pension, or similar employee benefit plan, including any securities, plan interests, and guarantees issued under a compensatory benefit plan or compensation contract, contained in a record, established by the issuer, its parents, its majority-owned subsidiaries, or the majority-owned subsidiaries of the issuer’s parent for the participation of the issuer’s employees, directors, managers, managing members, general partners, trustees, officers, consultants, or advisors, and their family members who acquire such securities from such persons through gifts or domestic relations orders. This includes offers or sales of such securities to all of the following persons:
(a) Former employees, directors, managers, managing members, general partners, trustees, officers, consultants, or advisors, provided that the securities are issued to such persons in connection with their prior employment by or services provided to the issuer.
(b) Insurance agents who are exclusive insurance agents of the issuer, or of the issuer’s parents or subsidiaries, or who derive more than 50 percent of their annual income from such persons.
(9) The offer or sale of securities to a bank, trust company, savings institution, insurance company, dealer, investment company as defined in the Investment Company Act of 1940, 15 U.S.C. s. 80a-3, as amended, pension or profit-sharing trust, or qualified institutional buyer, whether any of such entities is acting in its individual or fiduciary capacity.
(10)(a) The offer or sale, by or on behalf of an issuer, of its own securities if the offer or sale is part of an offering made in accordance with all of the following conditions:
1. There are no more than 35 purchasers, or the issuer reasonably believes that there are no more than 35 purchasers, of the securities of the issuer in this state during an offering made in reliance upon this subsection or, if such offering continues for a period in excess of 12 months, in any consecutive 12-month period.
2. Neither the issuer nor any person acting on behalf of the issuer offers or sells securities pursuant to this subsection by means of any form of general solicitation or general advertising in this state.
3. Before the sale, each purchaser or the purchaser’s representative, if any, is provided with, or given reasonable access to, full and fair disclosure of all material information, which must include written notification of a purchaser’s right to void the sale under subparagraph 4.
4. Any sale made pursuant to this subsection is voidable by the purchaser within 3 days after the first tender of consideration is made by such purchaser to the issuer by notifying the issuer that the purchaser expressly voids the purchase. The purchaser’s notice to the issuer must be sent by e-mail to the issuer’s e-mail address set forth in the disclosure document provided to the purchaser or purchaser’s representative or by hand delivery, courier service, or other method by which written proof of delivery to the issuer of the purchaser’s election to rescind the purchase is evidenced.
(b) The following purchasers are excluded from the calculation of the number of purchasers under subparagraph (a)1.:
1. Any spouse or child of the purchaser or any related family member who has the same principal residence as such purchaser.
2. A trust or estate in which a purchaser, any of the persons related to such purchaser specified in subparagraph 1., and any business entity specified in subparagraph 3., collectively, have more than 50 percent of the beneficial interest, excluding any contingent interest.
3. A business entity in which a purchaser, any of the persons related to such purchaser specified in subparagraph 1., and any trust or estate specified in subparagraph 2., collectively, are beneficial owners of more than 50 percent of the equity securities or equity interest.
4. An accredited investor.
A business entity must be counted as one purchaser. However, if the business entity is organized for the specific purpose of acquiring the securities offered and is not an accredited investor, each beneficial owner of equity securities or equity interests in the business entity must be counted as a separate purchaser. A noncontributory employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974 must be counted as one purchaser if the trustee makes all investment decisions for the plan.
(11) Offers or sales of securities by an issuer in a transaction that meets all of the following conditions:
(a) The offers or sales of securities are made only to persons who are, or who the issuer reasonably believes are, accredited investors.
(b) The issuer is not a business entity that has an undefined business operation, lacks a business plan, lacks a stated investment goal for the funds being raised, or plans to engage in a merger or acquisition with an unspecified business entity.
(c) The issuer reasonably believes that all purchasers are purchasing for investment and not with the view to or for sale in connection with a distribution of the security. Any resale of a security sold in reliance on this exemption within 12 months after sale is presumed to be with a view to distribution and not for investment, except a resale pursuant to a registration statement effective under this chapter or pursuant to an exemption available under this chapter, the Securities Act of 1933, as amended, or the rules and regulations adopted thereunder.
(d)1. A general announcement of the proposed offering, made by any means, includes only the following information:
a. The name, address, and telephone number of the issuer of the securities.
b. The name, a brief description, and price, if known, of any security to be issued.
c. A brief description of the business.
d. The type, number, and aggregate amount of securities being offered.
e. The name, address, and telephone number of the person to contact for additional information.
f. A statement that:
(I) Sales will be made only to accredited investors;
(II) Money or other consideration is not being solicited and will not be accepted by way of this general announcement; and
(III) The securities have not been registered with or approved by any state securities agency or the Securities and Exchange Commission and are being offered and sold pursuant to an exemption from registration.
2. The issuer may, in connection with an offer, provide information in addition to the information provided in the general announcement as specified in subparagraph 1. if such information is delivered:
a. Through an electronic database that is restricted to persons who have been prequalified as accredited investors; or
b. After the issuer reasonably believes that the prospective purchaser is an accredited investor.
(e) The issuer does not use telephone solicitation unless, before placing the call, the issuer reasonably believes that the prospective purchaser to be solicited is an accredited investor.
(f) The issuer files with the office a notice of transaction, a consent to service of process, and a copy of the general announcement within 15 days after the first sale is made in this state. The commission may adopt by rule procedures for filing documents by electronic means.
(g) Dissemination of the general announcement of the proposed offering to persons who are not accredited investors does not disqualify the issuer from claiming the exemption under this subsection.
(12) The isolated sale or offer for sale of securities when made by or on behalf of a bona fide owner, not the issuer or underwriter, of the securities, who disposes of such securities for the owner’s own account, and such sale is not made directly or indirectly for the benefit of the issuer or an underwriter of such securities or for the direct or indirect promotion of any scheme or enterprise with the intent of violating or evading this chapter. For purposes of this subsection, isolated offers or sales include, but are not limited to, an isolated offer or sale made by or on behalf of a bona fide owner, rather than the issuer or underwriter, of the securities if:
(a) The offer or sale of securities is in a transaction satisfying all of the conditions specified in paragraphs (10)(a) and (b); or
(b) The offer or sale of securities is in a transaction exempt under s. 4(a)(1) of the Securities Act of 1933, as amended, or under Securities and Exchange Commission rules or regulations.
(13) By or for the account of a pledgeholder, a secured party as defined in s. 679.1021(1)(ttt), or a mortgagee selling or offering for sale or delivery in the ordinary course of business and not for the purposes of avoiding the provisions of this chapter, to liquidate a bona fide debt, a security pledged in good faith as security for such debt.
(14) An unsolicited purchase or sale of securities on order of, and as the agent for, another solely and exclusively by a dealer registered pursuant to s. 517.12; provided that this exemption applies solely and exclusively to such registered dealers and does not authorize or permit the purchase or sale of securities at the direction of, and as agent for, another by any person other than a dealer so registered; and provided further that such purchase or sale may not be directly or indirectly for the benefit of the issuer or an underwriter of such securities or for the direct or indirect promotion of any scheme or enterprise with the intent of violating or evading this chapter.
(15) A nonissuer transaction with a federal covered adviser with investments under management in excess of $100 million acting in the exercise of discretionary authority in a signed record for the account of others.
(16) The sale by or through a registered dealer of any securities option if, at the time of the sale of the option:
(a) The performance of the terms of the option is guaranteed by any dealer registered under the Securities Exchange Act of 1934, as amended, which guaranty and dealer are in compliance with such requirements or rules as may be approved or adopted by the commission; or
(b)1. Such options transactions are cleared by the Options Clearing Corporation or any other clearinghouse recognized by commission rule;
2. The option is not sold by or for the benefit of the issuer of the underlying security; and
3. The underlying security may be purchased or sold on a recognized securities exchange registered under the Securities Exchange Act of 1934, as amended.
(17)(a) The offer or sale of securities, as agent or principal, by a dealer registered pursuant to s. 517.12, when such securities are offered or sold at a price reasonably related to the current market price of such securities, provided that such securities are:
1. Securities of an issuer for which reports are required to be filed by s. 13 or s. 15(d) of the Securities Exchange Act of 1934, as amended;
2. Securities of a company registered under the Investment Company Act of 1940, as amended;
3. Securities of an insurance company, as that term is defined in s. 2(a)(17) of the Investment Company Act of 1940, as amended; or
4. Securities, other than any security that is a federal covered security and is not subject to any registration or filing requirements under this chapter, that have been listed or approved for listing upon notice of issuance by a securities exchange registered under the Securities Exchange Act of 1934, as amended; and all securities senior to any securities so listed or approved for listing upon notice of issuance, or represented by subscription rights which have been so listed or approved for listing upon notice of issuance, or evidences of indebtedness guaranteed by an issuer with a class of securities listed or approved for listing upon notice of issuance by such securities exchange, such securities to be exempt only so long as such listings or approvals remain in effect. The exemption provided in this subparagraph does not apply when the securities are suspended from listing approval for listing or trading.
(b) The exemption provided in this subsection does not apply if the sale is made for the direct or indirect benefit of an issuer or a control person of such issuer or if such securities constitute the whole or part of an unsold allotment to, or subscription or participation by, a dealer as an underwriter of such securities.
(c) The exemption provided in this subsection is not available for any securities that have been denied registration pursuant to s. 517.111. Additionally, the office may deny this exemption with reference to any particular security, other than a federal covered security, by order published in such manner as the office finds proper.
(18) Any nonissuer transaction by a registered dealer, and any resale transaction by a sponsor of a unit investment trust registered under the Investment Company Act of 1940, as amended, in a security of a class that has been outstanding in the hands of the public for at least 90 days; provided that, at the time of the transaction, the following conditions in paragraphs (a), (b), and (c) and either paragraph (d) or paragraph (e) are met:
(a) The issuer of the security is actually engaged in business and is not in the organizational stage or in bankruptcy or receivership and is not a blank check, blind pool, or shell company whose primary plan of business is to engage in a merger or combination of the business with, or an acquisition of, an unidentified person.
(b) The security is sold at a price reasonably related to the current market price of the security.
(c) The security does not constitute the whole or part of an unsold allotment to, or a subscription or participation by, the dealer as an underwriter of the security.
(d) The security is listed in a nationally recognized securities manual designated by rule of the commission or a document filed with and publicly viewable through the Securities and Exchange Commission electronic data gathering and retrieval system and contains:
1. A description of the business and operations of the issuer;
2. The names of the issuer’s officers and directors, if any, or, in the case of an issuer not domiciled in the United States, the corporate equivalents of such persons in the issuer’s country of domicile;
3. An audited balance sheet of the issuer as of a date within 18 months before such transaction or, in the case of a reorganization or merger in which parties to the reorganization or merger had such audited balance sheet, a pro forma balance sheet; and
4. An audited income statement for each of the issuer’s immediately preceding 2 fiscal years, or for the period of existence of the issuer, if in existence for less than 2 years or, in the case of a reorganization or merger in which the parties to the reorganization or merger had such audited income statement, a pro forma income statement.
(e)1. The issuer of the security has a class of equity securities listed on a national securities exchange registered under the Securities Exchange Act of 1934, as amended;
2. The class of security is quoted, offered, purchased, or sold through an alternative trading system registered under Securities and Exchange Commission Regulation ATS, 17 C.F.R. s. 242.301, as amended, and the issuer of the security has made current information publicly available in accordance with Securities and Exchange Commission Rule 15c2-11, 17 C.F.R. s. 240.15c2-11, as amended;
3. The issuer of the security is a unit investment trust registered under the Investment Company Act of 1940, as amended;
4. The issuer of the security has been engaged in continuous business, including predecessors, for at least 3 years; or
5. The issuer of the security has total assets of at least $2 million based on an audited balance sheet as of a date within 18 months before such transaction or, in the case of a reorganization or merger in which parties to the reorganization or merger had such audited balance sheet, a pro forma balance sheet.
(19) The offer or sale of any security effected by or through a person in compliance with s. 517.12(16).
(20) A nonissuer transaction in an outstanding security by or through a dealer registered or exempt from registration under this chapter, if all of the following are true:
(a) The issuer is a reporting issuer in a foreign jurisdiction designated by this subsection or by commission rule, and the issuer has been subject to continuous reporting requirements in such foreign jurisdiction for not less than 180 days before the transaction.
(b) The security is listed on the securities exchange designated by this subsection or by commission rule, is a security of the same issuer which is of senior or substantially equal rank to the listed security, or is a warrant or right to purchase or subscribe to any such security.
For purposes of this subsection, Canada, together with its provinces and territories, is designated as a foreign jurisdiction, and Toronto Stock Exchange, Inc., is designated as a securities exchange. If, after an administrative hearing in compliance with ss. 120.569 and 120.57, the office finds that revocation is necessary or appropriate in furtherance of the public interest and for the protection of investors, it may revoke the designation of a securities exchange under this subsection.
(21) Other transactions exempted by commission rule upon a finding by the office that the application of s. 517.07 to a particular transaction is not necessary or appropriate in furtherance of the public interest and for the protection of investors due to the small dollar amount of the securities involved or the limited character of the offering. In conjunction with its adoption by rule of such exemptions, the commission may exempt persons selling or offering for sale securities in such a transaction from the registration requirements of s. 517.12. A rule adopted by the commission under this subsection may not have the effect of narrowing or limiting any exemption specified in this section.
(1) This section may be cited as “The Florida Limited Offering Exemption.”
(2) The registration provisions of s. 517.07 do not apply to a securities transaction conducted in accordance with this section; however, such transaction is subject to s. 517.301.
(3) The offer or sale of securities under this section must be conducted in accordance with the requirements of the federal exemption for intrastate offerings in s. 3(a)(11) of the Securities Act of 1933, 15 U.S.C. s. 77c(a)(11), as amended; Securities and Exchange Commission Rule 147, 17 C.F.R. s. 230.147, as amended; or Securities and Exchange Commission Rule 147A, 17. C.F.R. s. 230.147A, as amended.
(4) An issuer:
(a) Must be a for-profit business entity that maintains its principal place of business and derives its revenues primarily from operations in this state.
(b) Must conduct transactions for an offering of $2.5 million or more through a dealer registered with the office or an intermediary registered under s. 517.12. For an offering of less than $2.5 million, the issuer may, but is not required to, use such a dealer or intermediary.
(c) May not be, before or as a result of the offering, an investment company as defined in s. 3 of the Investment Company Act of 1940, 15 U.S.C. s. 80a-3, as amended, or subject to the reporting requirements of s. 13 or s. 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78m or s. 78o(d), as amended.
(d) May not be a business entity that has an undefined business operation, lacks a business plan, lacks a stated investment goal for the funds being raised, or plans to engage in a merger or acquisition with an unspecified business entity.
(e) May not be subject to a disqualification established by the commission or a disqualification described in s. 517.0616 or s. 517.1611. Each director, officer, manager, managing member, or general partner, or person occupying a similar status or performing a similar function, or person holding more than 20 percent of the equity interest of the issuer, is subject to this paragraph.
(f) Must deposit all funds received from investors in an account in a federally insured financial institution authorized to do business in this state and maintain all such funds in the account until the target offering amount has been reached or the offering has been terminated or has expired. If the target offering amount has not been reached within the period specified by the issuer in the disclosure statement provided to investors, or if the offering is terminated or expires, the issuer must refund invested funds to all investors within 10 business days after such occurrence.
(g) Must use all funds in accordance with the use of proceeds as disclosed to prospective investors.
(5) The issuer must file a notice of the offering with the office, in writing or in electronic form, in a format prescribed by commission rule, together with a nonrefundable filing fee of $200. The filing fee must be deposited into the Regulatory Trust Fund of the office. The commission may adopt rules establishing procedures for the deposit of fees and the filing of documents by electronic means if the procedures provide the office with the information and data required by this section. A notice is effective upon receipt, by the office, of the completed form, filing fee, and an irrevocable written consent to service of civil process, similar to that provided for in s. 517.101. The notice may be terminated by filing with the office a notice of termination. The notice and offering expire 12 months after filing the notice with the office and are not eligible for renewal. The notice must:
(a) Be filed with the office at least 10 days before the issuer commences an offering of securities or the offering is displayed on a website of an intermediary in reliance upon the exemption provided by this section.
(b) Indicate that the issuer is conducting an offering in reliance upon the exemption provided by this section.
(c) Contain the name and contact information, including an e-mail address, of the issuer.
(d) Identify any predecessors, owners, officers, directors, general partners, managers, managing members, or any person occupying a similar status or performing a similar function of the issuer, including that person’s title, status as a partner, trustee, or sole proprietor or a similar role, and ownership percentage.
(e) Identify the federally insured financial institution into which investor funds will be deposited.
(f) If applicable, include the intermediary’s website address where the issuer’s securities will be offered.
(g) State the target offering amount and the date, not to exceed 365 days, by which the target amount must be reached in order to avoid termination of the offering.
(6) The issuer must amend the notice form within 10 business days after any material information contained in the notice becomes inaccurate. The commission may require, by rule, an issuer who has filed a notice under this section to file amendments with the office.
(7) The issuer may engage in general advertising and general solicitation of the offering to prospective investors. Any oral or written statements in advertising or solicitation of the offering which contain a material misstatement, or which fail to disclose material information, are subject to enforcement under this chapter. Any general advertising or other general announcement must state that the offering is limited and open only to residents of this state.
(8) The issuer must provide a disclosure statement to the dealer or intermediary, as applicable; to the office at the time that the notice is filed; and to each prospective investor at least 3 days before the investor’s commitment to purchase or payment of any consideration. The disclosure statement must contain material information about the issuer and the offering, including all of the following:
(a) The name, legal status, physical address, e-mail address, and website address of the issuer.
(b) The names of the directors, officers, managers, managing members, and general partners and any person occupying a similar status or performing a similar function, and the name and ownership percentage of each person holding more than 20 percent of the issuer’s equity interests.
(c) A description of the current business and anticipated business plan of the issuer.
(d) A description of the stated purpose and intended use of the proceeds of the offering.
(e) The target offering amount and the deadline to reach the target offering amount.
(f) The price to the public of the securities.
(g) A description of the ownership and capital structure of the issuer, including:
1. Terms of the securities being offered and each class of security of the issuer, including how those terms may be modified, and a summary of the differences between such securities, including how the rights of the securities being offered may be materially limited, diluted, or qualified by rights of any other class of security of the issuer.
2. A description of how the exercise of the rights held by the principal equity holders of the issuer could negatively impact the purchasers of the securities being offered.
(h) A statement that the security being offered is not registered under federal or state securities laws and that the securities are subject to the limitation on resale contained in Securities and Exchange Commission Rule 147 or Rule 147A.
(i) Any issuer plans, formal or informal, to offer additional securities in the future.
(j) The risks to purchasers of the securities relating to minority ownership in the issuer.
(k) A description of the financial condition of the issuer.
1. For offerings that, in combination with all other offerings of the issuer within the preceding 12-month period, have offering amounts of $500,000 or less, the financial statements of the issuer may be, but are not required to be, included.
2. For offerings that, in combination with all other offerings of the issuer within the preceding 12-month period, have offering amounts of more than $500,000, but not more than $2.5 million, the description must include financial statements prepared in accordance with generally accepted accounting principles and reviewed by a certified public accountant, as defined in s. 473.302, who is independent of the issuer, using professional standards and procedures or standards and procedures established by commission rule for such purpose.
3. For offerings that, in combination with all other offerings of the issuer within the preceding 12-month period, have offering amounts of more than $2.5 million, the description must include audited financial statements prepared in accordance with generally accepted accounting principles by a certified public accountant, as defined in s. 473.302, who is independent of the issuer, and other requirements as the commission may establish by rule.
(l) The following statement in boldface, conspicuous type on the front page of the disclosure statement:
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this disclosure statement is truthful or complete. Any representation to the contrary is a criminal offense.
These securities are offered under, and will be sold in reliance upon, an exemption from the registration requirements of federal and Florida securities laws. Neither the Federal Government nor the State of Florida has reviewed the accuracy or completeness of any offering materials. In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities are subject to restrictions on transferability and resale and may not be transferred or resold except as specifically authorized by applicable federal and state securities laws. Investing in these securities involves a speculative risk, and investors should be able to bear the loss of their entire investment.
(9) The sum of all cash and other consideration received for sales of a security under this section may not exceed $5 million, less the aggregate amount received for all sales of securities by the issuer within the 12 months preceding the first offer or sale made in reliance upon this exemption. Offers or sales to a person owning 20 percent or more of the outstanding equity interests of any class or classes of securities or to an officer, director, manager, managing member, general partner, or trustee, or a person occupying a similar status, do not count toward this limitation.
(10) Unless the investor is an accredited investor, or the issuer reasonably believes that the investor is an accredited investor, the aggregate amount of securities sold by an issuer to an investor in a 12-month period may not exceed $10,000.
(11) A notice-filing under this section must be summarily suspended by the office if:
(a) The payment for the filing is dishonored by the financial institution upon which the funds are drawn. For purposes of s. 120.60(6), failure to pay the required notice filing fee constitutes an immediate and serious danger to the public health, safety, and welfare. The office shall enter a final order revoking a notice-filing in which the payment for the filing is dishonored by the financial institution upon which the funds are drawn; or
(b) The issuer made a material false statement in the issuer’s notice-filing. The summary suspension remains in effect until a final order is entered by the office. For purposes of s. 120.60(6), a material false statement made in the issuer’s notice-filing constitutes an immediate and serious danger to the public health, safety, and welfare. If an issuer made a material false statement in the issuer’s notice-filing, the office must enter a final order revoking the notice-filing, issue a fine as prescribed by s. 517.191(9), and issue permanent bars under s. 517.191(10) to the issuer and all owners, officers, directors, managers, managing members, general partners, and control persons, or any person occupying a similar status or performing a similar function of the issuer, including title; status as a partner, trustee, sole proprietor, or similar role; and ownership percentage.
(12) If the issuer employs the services of an intermediary, the intermediary must:
(a) Take measures, as established by commission rule, to reduce the risk of fraud with respect to the offering.
(b) Provide information on its website regarding the high risk of investment in and limitation on the resale of exempt securities and the potential for loss of an entire investment. The information must include, but need not be limited to, all of the following:
1. A description of the financial institution into which investor funds will be deposited and the conditions for the use of such funds by the issuer.
2. A description of whether financial information provided by the issuer has been audited by an independent certified public accountant, as defined in s. 473.302.
(c) Obtain from each prospective investor a zip code or residence address, a copy of a driver license, and any other proof of residency in order for the issuer or intermediary to reasonably believe that the potential investor is a resident of this state. The commission may adopt rules authorizing additional forms of identification and prescribing the process for verifying any identification presented by the prospective investor.
(d) Obtain information sufficient for the issuer or intermediary to reasonably believe that a particular prospective investor is an accredited investor.
(e) Provide a monthly update for each offering, after the first full month after the date of the offering. The update must be accessible on the intermediary’s website and must display the date and amount of each sale of securities, and each cancellation of commitment to invest, in the previous calendar month.
(f) Take reasonable steps to protect personal information collected from investors, as required by s. 501.171.
(g) Prohibit its directors, officers, managers, managing members, general partners, employees, and agents from having any financial interest in the issuer using its services.
(13) An intermediary not registered as a dealer under s. 517.12(5) may not:
(a) Offer investment advice or recommendations. A refusal by an intermediary to post an offering that it deems not credible or that represents a potential for fraud may not be construed as an offer of investment advice or recommendation.
(b) Solicit purchases, sales, or offers to buy securities offered or displayed on its website.
(c) Compensate employees, agents, or other persons for the solicitation of, or based on the sale of, securities offered or displayed on its website.
(d) Hold, manage, possess, or otherwise handle investor funds or securities.
(e) Compensate promoters, finders, or lead generators for providing the intermediary with the personal identifying information of any prospective investor.
(f) Engage in any other activities set forth by commission rule.
(14) If the issuer does not employ a dealer or an intermediary for an offering pursuant to the exemption created under this section, the issuer must fulfill each of the obligations specified in paragraphs (12)(c)-(f).
(15) Any sale made pursuant to the exemption created under this section is voidable by the purchaser within 3 days after the first tender of consideration is made by such purchaser to the issuer by notifying the issuer that the purchaser expressly voids the purchase. The purchaser’s notice to the issuer must be sent by e-mail to the issuer’s e-mail address set forth in the disclosure statement that is provided to the purchaser or purchaser’s representative or by certified mail or overnight delivery service with proof of delivery to the mailing address set forth in the disclosure statement.
(1) This section may be cited as the “Florida Invest Local Exemption.”
(2) The registration provisions of s. 517.07 do not apply to a securities transaction conducted in accordance with this section; however, such transaction is subject to s. 517.301.
(3) The offer or sale of securities under this section must meet the requirements of the federal exemption for intrastate offerings in s. 3(a)(11) of the Securities Act of 1933, Securities and Exchange Commission Rule 147, or Securities and Exchange Commission Rule 147A, as amended.
(4) The issuer must be a for-profit business entity registered with the Department of State which has its principal place of business in this state. The issuer may not be, before or as a result of the offering:
(a) An investment company as defined in the Investment Company Act of 1940, as amended;
(b) Subject to the reporting requirements of the Securities and Exchange Act of 1934, as amended;
(c) A business entity that has an undefined business operation, lacks a business plan, lacks a stated investment goal for the funds being raised, or plans to engage in a merger or an acquisition with an unspecified business entity; or
(d) Subject to a disqualification as provided in s. 517.0616.
(5) The sum of all cash and other consideration received from all sales of the securities in reliance upon the exemption under this section may not exceed $500,000, less the aggregate amount received for all sales of securities by the issuer within the 12 months before the first offer or sale made in reliance on this exemption.
(6)(a) The issuer may not accept more than $10,000 from any single purchaser unless any of the following apply:
1. The issuer reasonably believes that the purchaser is an accredited investor.
2. The purchaser is an officer, director, partner, or trustee, or an individual occupying a similar status or performing similar functions, of the issuer.
3. The purchaser is an owner of 10 percent or more of the issuer’s outstanding equity.
(b) For purposes of this subsection, the following persons must be treated collectively as a single purchaser:
1. Any spouse or child of the purchaser or any related family member who has the same primary residence as the purchaser.
2. Any business entity of which the purchaser and any person related to the purchaser as provided in subparagraph 1. collectively own more than 50 percent of the equity interest.
(7) The issuer may engage in general advertising and general solicitation of the offering. Any general advertising or other general announcement must state that the offer is limited and open only to residents of this state. Any oral or written statements in advertising or solicitation of the offer which contain a material misstatement, or which fail to disclose material information, are subject to enforcement under this chapter.
(8) A purchaser must receive, at least 3 business days before any binding commitment to purchase or consideration paid, a disclosure statement that provides material information regarding the issuer, including, but not limited to, all of the following information:
(a) The issuer’s name, type of entity, and contact information.
(b) The name and contact information of each director, officer, or other manager of the issuer.
(c) A description of the issuer’s business.
(d) A description of the security being offered.
(e) The total amount of the offering.
(f) The intended use of proceeds from the sale of the securities.
(g) The target offering amount.
(h) A statement that if the target offering amount is not obtained in cash or in the value of other tangible consideration received on a date that is no more than 180 days after the commencement of the offering, the offering will be terminated, and any funds or other consideration received from purchasers must be promptly returned.
(i) A statement that the security being offered is not registered under federal or state securities laws and that the securities are subject to the limitation on resale contained in Securities and Exchange Commission Rule 147 or Rule 147A.
(j) The names and addresses of all persons who will be involved in the offer and sale of securities on behalf of the issuer.
(k) The name of the bank or other depository institution into which investor funds will be deposited.
(l) The following statement in boldface, conspicuous type:
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined that this disclosure statement is truthful or complete. Any representation to the contrary is a criminal offense.
(9) All funds received from investors must be deposited into a bank or depository institution authorized to do business in this state. The issuer may not withdraw any amount of the offering proceeds unless the target offering amount has been received.
(10) The issuer must file a notice of the offering with the office, in writing or in electronic form, in a format prescribed by commission rule, no less than 5 business days before the offering commences, along with the disclosure statement described in subsection (8). If there are any material changes to the information previously submitted, the issuer must, within 3 business days after such material change, file an amended notice.
(11) An individual, entity, or entity employee who acts as an agent for the issuer in the offer or sale of securities and is not registered as a dealer under this chapter may not do either of the following:
(a) Receive compensation based upon the solicitation of purchases, sales, or offers to purchase the securities.
(b) Take custody of investor funds or securities.
(12) Any sale made pursuant to the exemption created under this section is voidable by the purchaser within 3 days after the first tender of consideration is made by such purchaser to the issuer by notifying the issuer that the purchaser expressly voids the purchase. The purchaser’s notice to the issuer must be sent by e-mail to the issuer’s e-mail address set forth in the disclosure statement that is provided to a purchaser or the purchaser’s representative or by hand delivery, courier service, or other method by which written proof of delivery to the issuer of the purchaser’s election to rescind the purchase is evidenced.
517.0613 Failure to comply with a securities registration exemption.—
(1) Failure to meet the requirements for any exemption from securities registration does not preclude the issuer from claiming the availability of any other applicable state or federal exemption.
(2) The exemptions created under ss. 517.061, 517.0611, and 517.0612 are not available to an issuer for any transaction or series of transactions that, although in technical compliance with the applicable provisions, is part of a plan or scheme to evade the registration provisions of s. 517.07, and registration under s. 517.07 is required in connection with such transactions.
(1) If the safe harbors in subsection (2) do not apply in determining whether two or more offerings are to be treated as one for the purpose of registration or qualifying for an exemption from registration under this chapter, offers and sales may not be integrated if, based on the particular facts and circumstances, the issuer can establish either that each offering complies with the registration requirements of this chapter, or that an exemption from registration is available for the particular offering, provided that any transaction or series of transactions that, although in technical compliance with this chapter, is part of a plan or scheme to evade the registration requirements of this chapter will not have the effect of avoiding integration. In making this determination:
(a) For an exempt offering prohibiting general solicitation, the issuer must have a reasonable belief, based on the facts and circumstances, with respect to each purchaser in the exempt offering prohibiting general solicitation, that the issuer or any person acting on the issuer’s behalf:
1. Did not solicit such purchaser through the use of general solicitation; or
2. Established a substantive relationship with such purchaser before the commencement of the exempt offering prohibiting general solicitation, provided that a purchaser previously solicited through the use of general solicitation is not deemed to have been solicited through the use of general solicitation in the current offering if, during the 45 calendar days following such previous general solicitation:
a. No offer or sale of the same or similar class of securities has been made by or on behalf of the issuer, including to such purchaser; and
b. The issuer or any person acting on the issuer’s behalf has not solicited such purchaser through the use of general solicitation for any other security.
(b) For two or more concurrent exempt offerings permitting general solicitation, in addition to satisfying the requirements of the particular exemption relied on, general solicitation offering materials for one offering that includes information about the material terms of a concurrent offering under another exemption may constitute an offer of securities in such other offering, and therefore the offer must comply with all the requirements for, and restrictions on, offers under the exemption being relied on for such other offering, including any legend requirements and communications restrictions.
(2) The integration analysis required by subsection (1) is not required if any of the following nonexclusive safe harbors apply:
(a) An offering commenced more than 30 calendar days before the commencement of any other offering, or more than 30 calendar days after the termination or completion of any other offering, may not be integrated with such other offering, provided that for an exempt offering for which general solicitation is not permitted which follows by 30 calendar days or more an offering that allows general solicitation, paragraph (1)(a) applies.
(b) Offers and sales made in compliance with any of the following provisions are not subject to integration with other offerings:
1. Section 517.051 or s. 517.061, except s. 517.061(9), (10), or (11).
(1) A communication will not be deemed to constitute general solicitation or general advertising if the communication is made in connection with a seminar or meeting in which more than one issuer participates and which is sponsored by a college, a university, or another institution of higher education; a state or local government or an instrumentality thereof; a nonprofit chamber of commerce or other nonprofit organization; or an angel investor group, incubator, or accelerator, if all of the following apply:
(a) Advertising for the seminar or meeting does not reference a specific offering of securities by the issuer.
(b) The sponsor of the seminar or meeting does not do any of the following:
1. Make investment recommendations or provide investment advice to attendees of the seminar or meeting.
2. Engage in any investment negotiations between the issuer and investors attending the seminar or meeting.
3. Charge attendees of the seminar or meeting any fees, other than reasonable administrative fees.
4. Receive any compensation for making introductions between seminar or meeting attendees and issuers or for investment negotiations between such parties.
5. Receive any compensation with respect to the seminar or meeting, which compensation would require registration or notice-filing under this chapter, the Securities Exchange Act of 1934, 15 U.S.C. ss. 78a et seq., as amended, or the Investment Advisers Act of 1940, 15 U.S.C. ss. 80b-1 et seq., as amended. The sponsorship or participation in the seminar or meeting does not by itself require registration or notice-filing under this chapter.
(c) The type of information regarding an offering of securities by the issuer which is communicated or distributed by or on behalf of the issuer in connection with the seminar or meeting is limited to a notification that the issuer is in the process of offering or planning to offer securities, the type and amount of securities being offered, the intended use of proceeds of the offering, and the unsubscribed amount in an offering.
(d) If the event allows attendees to participate virtually, rather than in person, online participation in the event is limited to:
1. Individuals that are members of, or otherwise associated with, the sponsor organization;
2. Individuals that the sponsor reasonably believes are accredited investors; or
3. Individuals that have been invited to the event by the sponsor based on industry or investment-related experience reasonably selected by the sponsor in good faith and disclosed in the public communications about the event.
(2) Before any offers or sales are made in connection with an offering, communications by an issuer or any person authorized to act on behalf of the issuer are not deemed to constitute general solicitation or general advertising if the communication is solely for the purpose of determining whether there is any interest in a contemplated securities offering. Requirements imposed under this chapter on written or oral statements made in the course of such communication may be enforced as provided in this chapter. The solicitation or acceptance of money or other consideration or of any commitment, binding or otherwise, from any person is prohibited.
(a) The communication must state all of the following:
1. Money or other consideration is not being solicited and, if sent in response, will not be accepted.
2. Any offer to buy the securities will not be accepted, and no part of the purchase price will be accepted.
3. A person’s indication of interest does not involve obligation or commitment of any kind.
(b) Any written communication under this subsection may include a means by which a person may indicate to the issuer that the person is interested in a potential offering. The issuer may require the name, address, telephone number, or e-mail address in any response form included in the written communication under this paragraph.
(c) A communication in accordance with this subsection is not subject to s. 501.059, regarding telephone solicitations.
517.0616 Disqualification.—A registration exemption under s. 517.061(9), (10), and (11), s. 517.0611, or s. 517.0612 is not available to an issuer that would be disqualified under Securities and Exchange Commission Rule 506(d), 17 C.F.R. s. 230.506(d), as amended, at the time the issuer makes an offer for the sale of a security.
(1) It is unlawful and a violation of this chapter for any person to sell or offer to sell a security within this state unless the security is exempt under s. 517.051, is sold in a transaction exempt under s. 517.061, is a federal covered security, or is registered pursuant to this chapter.
(2) No securities that are required to be registered under this chapter shall be sold or offered for sale within this state unless such securities have been registered pursuant to this chapter and unless prior to each sale the purchaser is furnished with a prospectus meeting the requirements of rules adopted by the commission.
(3) The office shall issue a permit when registration has been granted by the office. A permit to sell securities is effective for 1 year from the date it was granted. Registration of securities shall be deemed to include the registration of rights to subscribe to such securities if the application under s. 517.081 or s. 517.082 for registration of such securities includes a statement that such rights are to be issued.
(4) A record of the registration of securities shall be kept by the office, in which register of securities shall also be recorded any orders entered by the office with respect to such securities. Such register, and all information with respect to the securities registered therein, shall be open to public inspection.
(5) Notwithstanding any other provision of this section, offers of securities required to be registered by this section may be made in this state before the registration of such securities if the offers are made in conformity with rules adopted by the commission.
History.—s. 6, ch. 14899, 1931; CGL 1936 Supp. 6002(7); s. 3, ch. 24066, 1947; s. 11, ch. 25035, 1949; ss. 12, 35, ch. 69-106; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 2, ch. 78-435; ss. 5, 15, ch. 79-381; ss. 4, 5, ch. 80-254; ss. 2, 3, ch. 81-318; s. 1, ch. 83-201; s. 5, ch. 85-165; s. 6, ch. 86-85; ss. 14, 15, ch. 90-362; s. 4, ch. 91-429; s. 4, ch. 97-224; s. 587, ch. 2003-261.
517.072 Viatical settlement investments.—
(1) The exemptions provided for by s. 517.051(6) and (11) do not apply to a viatical settlement investment.
(2) The offering of a viatical settlement investment is not an exempt transaction under s. 517.061(10), (12), (13), and (18), regardless of whether the offering otherwise complies with the conditions of that section, unless such offering is to a qualified institutional buyer.
(3) The registration provisions of ss. 517.07 and 517.12 do not apply to any of the following transactions in viatical settlement investments; however, such transactions in viatical settlement investments are subject to s. 517.301:
(a) The transfer or assignment of an interest in a previously viaticated policy from a natural person who transfers or assigns no more than one such interest in a single calendar year.
(b) The provision of stop-loss coverage to a viatical settlement provider, financing entity, or related provider trust, as those terms are defined in s. 626.9911, by an authorized or eligible insurer.
(c) The transfer or assignment of a viaticated policy from a licensed viatical settlement provider to another licensed viatical settlement provider, a related provider trust, a financing entity, or a special purpose entity, as those terms are defined in s. 626.9911, or to a contingency insurer, provided that such transfer or assignment is not the direct or indirect promotion of any scheme or enterprise with the intent of violating or evading this chapter.
(d) The transfer or assignment of a viaticated policy to a bank, trust company, savings institution, insurance company, dealer, investment company as defined in the Investment Company Act of 1940, as amended, pension or profit-sharing trust, qualified institutional buyer, or an accredited investor, provided such transfer or assignment is not for the direct or indirect promotion of any scheme or enterprise with the intent of violating or evading any provision of this chapter.
(e) The transfer or assignment of a viaticated policy by a conservator of a viatical settlement provider appointed by a court of competent jurisdiction who transfers or assigns ownership of viaticated policies pursuant to that court’s order.
(4) The commission may establish by rule requirements and standards for disclosures to purchasers of viatical settlement investments and recordkeeping requirements for sellers of viatical settlement investments.
517.075 Cuba, prospectus disclosure of doing business with, required.—
(1) Any issuer of securities that will be sold in this state pursuant to a prospectus must disclose in the prospectus if the issuer or any affiliate thereof does business with the government of Cuba or with any person or affiliate located in Cuba. The prospectus disclosure required by this subsection does not apply with respect to prospectuses prepared before April 10, 1992.
(2) Any disclosure required by subsection (1) must include:
(a) The name of such person, affiliate, or government with which the issuer does business and the nature of that business;
(b) A statement that the information is accurate as of the date the securities were effective with the United States Securities and Exchange Commission or with the office, whichever date is later; and
(c) A statement that current information concerning the issuer’s business dealings with the government of Cuba or with any person or affiliate located in Cuba may be obtained from the office, which statement must include the address and phone number of the office.
(3) If an issuer commences engaging in business with the government of Cuba or with any person or affiliate located in Cuba, after the date issuer’s securities become effective with the Securities and Exchange Commission or with the office, whichever date is later, or if the information reported in the prospectus concerning that business changes in any material way, the issuer must provide the office notice of that business or change, as appropriate, in a manner acceptable to the office. The commission shall prescribe by rule a form for persons to use to report the commencement of such business or any change in such business which occurs after the effective registration of such securities. This form must include, at a minimum, the information required by subsection (2). The information reported on the form must be kept current. Information is current if reported to the office within 90 days after the commencement of business or within 90 days after the change occurs with respect to previously reported information.
(4) The office shall provide, upon request, a copy of any form filed with the office under subsection (3) to any person requesting the form.
(5) Each securities offering sold in violation of this section, and each failure of an issuer to timely file the form required by subsection (3), subjects the issuer to a fine of up to $5,000. Any fine collected under this section shall be deposited into the Anti-Fraud Trust Fund of the office.
(6)(a) Any person who has purchased securities sold in violation of this section may commence a civil action against the issuer. Any court of competent jurisdiction in which the suit is filed may require the issuer to comply with this section and may also require the issuer to pay monetary damages to the purchaser of up to $5,000.
(b) Any person may bring an action in circuit court against the issuer to seek the imposition of a fine or injunction, or both, to ensure the issuer’s compliance with this section. Proceeds from fines imposed pursuant to an action under this subsection shall be deposited into the General Revenue Fund.
(7) A broker, dealer, or agent is deemed to have complied with this section by obtaining from the issuer a written statement, at or prior to the sale of such securities, that the issuer has complied with all provisions of this section. A broker, dealer, or agent who sells any securities offered by an issuer in violation of this section and who has obtained a statement of compliance from the issuer shall be indemnified by the issuer for all losses, including attorney’s fees, incurred by the broker, dealer, or agent as a result of the issuer’s violation of this section.
(8) This section does not apply to securities or transactions that are exempt from registration under federal or state law or to investment companies registered under the Investment Company Act of 1940, as amended.
(1) All securities required by this chapter to be registered before being sold in this state and not entitled to registration by notification shall be registered in the manner provided by this section.
(2) The office shall receive and act upon applications for the registration of securities. Applications must be duly signed by the applicant, sworn to by any person having knowledge of the facts, and filed with the office. An application may be made either by the issuer of the securities for which registration is applied or by any registered dealer desiring to sell such securities within the state.
(3) The office may require the applicant to submit to the office the following information concerning the issuer and such other relevant information as the office may in its judgment deem necessary to enable it to ascertain whether such securities shall be registered pursuant to the provisions of this section:
(a) The names and addresses of:
1. All the directors, trustees, and officers, if the issuer is a corporation, association, or trust.
2. All the managers or managing members, if the issuer is a limited liability company.
3. All the partners, if the issuer is a partnership.
4. The issuer, if the issuer is a sole proprietorship or natural person.
(b) The location of the issuer’s principal business office and of its principal office in this state, if any.
(c) The general character of the business actually to be transacted by the issuer and the purposes of the proposed issue.
(d) A statement of the capitalization of the issuer.
(e) A balance sheet showing the amount and general character of its assets and liabilities on a day not more than 90 days prior to the date of filing such balance sheet or such longer period of time, not exceeding 6 months, as the office may permit at the written request of the issuer on a showing of good cause therefor.
(f) A detailed statement of the plan upon which the issuer proposes to transact business.
(g) A specimen copy of the securities certificate, if applicable, and a copy of any circular, prospectus, advertisement, or other description of such securities.
(h) A statement of the amount of the issuer’s income, expenses, and fixed charges during the last fiscal year or, if in actual business less than 1 year, then for such time as the issuer has been in actual business.
(i) A statement of the issuer’s cash sources and application during the last fiscal year or, if in actual business less than 1 year, then for such time as the issuer has been in actual business.
(j) A statement showing the maximum price at which such security is proposed to be sold, together with the maximum amount of commission, including expenses, or other form of remuneration to be paid in cash or otherwise, directly or indirectly, for or in connection with the sale or offering for sale of such securities.
(k) A copy of the opinion or opinions of counsel concerning the legality of the issue or other matters which the office may determine to be relevant to the issue.
(l) A detailed statement showing the items of cash, property, services, patents, good will, and any other consideration in payment for which such securities have been or are to be issued.
(m) The amount of securities to be set aside and disposed of and a statement of all securities issued from time to time for promotional purposes.
(n) If the issuer is a corporation, there shall be filed with the application a copy of its articles of incorporation with all amendments and of its existing bylaws, if not already on file in the office. If the issuer is a limited liability company, there shall be filed with the application a copy of the articles of organization with all the amendments and a copy of the company’s operating agreement as may be amended, if not already on file with the office. If the issuer is a trustee, there shall be filed with the application a copy of all instruments by which the trust is created or declared and in which it is accepted and acknowledged. If the issuer is a partnership, unincorporated association, joint-stock company, or any other form of organization whatsoever, there shall be filed with the application a copy of its articles of partnership or association and all other papers pertaining to its organization, if not already on file in the office.
(4) The commission may, by rule:
(a) Establish criteria relating to the issuance of equity securities, debt securities, insurance company securities, real estate investment trusts, oil and gas investments, and other investments. In establishing these criteria, the commission may consider the rules and regulations of the Securities and Exchange Commission and statements of policy by the North American Securities Administrators Association, Inc., relating to the registration of securities offerings. The criteria must include all of the following:
1. The promoter’s equity investment ratio.
2. The financial condition of the issuer.
3. The voting rights of shareholders.
4. The grant of options or warrants to underwriters and others.
5. Loans and other transactions with affiliates of the issuer.
6. The use, escrow, or refund of proceeds of the offering.
(b) Prescribe forms requiring applications for the registration of securities to be submitted to the office, including a simplified offering circular to register, under this section, securities that are sold in offerings in which the aggregate offering price in any consecutive 12-month period does not exceed the amount provided in s. 3(b) of the Securities Act of 1933, as amended.
(c) Establish procedures for depositing fees and filing documents by electronic means, provided that such procedures provide the office with the information and data required by this section.
(d) Establish requirements and standards for the filing, content, and circulation of a preliminary, final, or amended prospectus; advertisements; and other sales literature. In establishing such requirements and standards, the commission shall consider the rules and regulations of the Securities and Exchange Commission relating to requirements for preliminary, final, or amended or supplemented prospectuses and the rules of the Financial Industry Regulatory Authority relating to advertisements and sales literature.
(5) All of the following issuers are not eligible to submit a simplified offering circular:
(a) An issuer that is subject to any of the disqualifications described in Securities and Exchange Commission Rule 262, 17 C.F.R. s. 230.262, as amended, or that has been or is engaged or is about to engage in an activity that would be grounds for denial, revocation, or suspension under s. 517.111. For purposes of this paragraph, an issuer includes an issuer’s director, officer, general partner, manager or managing member, trustee, or a person owning at least 10 percent of the ownership interests of the issuer; a promoter or selling agent of the securities to be offered; or any officer, director, partner, or manager or managing member of such selling agent.
(b) An issuer that is a development-stage company that either has no specific business plan or purpose or has indicated that its business plan is to merge with an unidentified business entity or entities.
(c) An issuer of offerings in which the specific business or properties cannot be described.
(d) An issuer that the office determines is ineligible because the simplified circular does not provide full and fair disclosure of material information for the type of offering to be registered by the issuer.
(6) All of the statements, exhibits, and documents of every kind required under this section, except properly certified public documents, shall be verified by the oath of the applicant or of the issuer in such manner and form as may be required by the commission.
(7) The commission may by rule fix the maximum discounts, commissions, expenses, remuneration, and other compensation to be paid in cash or otherwise, not to exceed 20 percent, directly or indirectly, for or in connection with the sale or offering for sale of such securities in this state.
(8) An issuer filing an application under this section shall, at the time of filing, pay the office a nonreturnable fee of $1,000 per application for each offering that exceeds the amount provided in s. 3(b) of the Securities Act of 1933, as amended, or $200 per application for each offering that does not exceed the amount provided in s. 3(b) of the Securities Act of 1933, as amended.
(9)(a) The office shall record the registration of a security in the register of securities if, upon examination of an application, it finds that all of the following requirements are met:
1. The application is complete.
2. The fee imposed in subsection (8) has been paid.
3. The sale of the security would not be fraudulent and would not work or tend to work a fraud upon the purchaser.
4. The terms of the sale of such securities would be fair, just, and equitable.
5. The enterprise or business of the issuer is not based upon unsound business principles.
(b) Upon registration, the security may be sold by the issuer or any registered dealer, subject, however, to the further order of the office.
(10) The office shall deem an application to register securities filed with the office abandoned if the issuer or any person acting on behalf of the issuer has failed to timely complete an application specified by commission rule.
517.082 Registration by notification; federal registration statements.—
(1) Securities offered or sold pursuant to a registration statement filed under the Securities Act of 1933, as amended, are entitled to registration by notification in the manner provided in subsection (2), provided that before the offer or sale the registration statement has become effective.
(2) An application for registration by notification shall be filed with the office, shall contain the following information, and shall be accompanied by all of the following:
(a) An application to sell executed by the issuer, any person on whose behalf the offering is made, a dealer registered under this chapter, or any duly authorized agent of any such person, setting forth the name and address of the applicant, the name and address of the issuer, and the title of the securities to be offered and sold.
(b) Copies of such documents filed with the Securities and Exchange Commission as the Financial Services Commission may by rule require.
(c) An irrevocable written consent to service as required by s. 517.101.
(d) A nonreturnable fee of $1,000 per application.
A registration under this section becomes effective when the federal registration statement becomes effective or as of the date the application is filed with the office, whichever is later, provided that, in addition to the items listed in paragraphs (a)-(d), the office has received written notification of effective registration under the Securities Act of 1933, as amended, or the Investment Company Act of 1940, as amended, within 10 business days after the date federal registration is granted. Failure to provide all the information required by this subsection to the office within 60 days after the date the registration statement becomes effective with the Securities and Exchange Commission shall be a violation of this chapter.
(3) Except for units of limited partnership interests or such other securities as the commission describes by rule as exempt from this subsection due to high investment quality, the provisions of this section may not be used to register securities if the offering price at the time of effectiveness with the Securities and Exchange Commission is $5 or less per share, unless such securities are listed or designated, or approved for listing or designation upon notice of issuance, on a stock exchange registered pursuant to the Securities Exchange Act of 1934, as amended, or on the National Association of Securities Dealers Automated Quotation (NASDAQ) System, or unless such securities are of the same issuer and of senior or substantially equal rank to securities so listed or designated.
(4) In lieu of filing with the office the application, fees, and documents for registration required by subsection (2), the commission may establish, by rule, procedures for depositing fees and filing documents by electronic means, provided such procedures provide the office with the information and data required by this section.
(5) If the Securities and Exchange Commission has not declared effective the applicant’s federal registration statement within 180 days after the applicant’s filing with the office of an application for registration by notification, the office must deem the application abandoned.
(1) Upon any initial application for registration under s. 517.081 or s. 517.082 or upon request of the office, the issuer shall file with such application the irrevocable written consent of the issuer that in suits, proceedings, and actions growing out of the violation of any provision of this chapter, the service on the office of a notice, process, or pleading therein, authorized by the laws of this state, shall be as valid and binding as if due service had been made on the issuer.
(2) Any such action must be brought either in the county of the plaintiff’s residence or in the county in which the office has its official headquarters. The written consent must be authenticated by the seal of the issuer, if it has a seal, and by the acknowledged signature of a director, manager, managing member, general partner, trustee, or officer of the issuer and must be accompanied by a duly certified copy of the resolution of the issuer’s board of directors, trustees, managers, managing members, or general partners authorizing the signer to execute the consent. In case any process or pleadings mentioned in this chapter are served upon the office, service must be by duplicate copies, one of which must be filed in the office and the other immediately forwarded by the office by registered mail to the principal office of the issuer against which the process or pleadings are directed.
517.111 Revocation or denial of registration of securities.—
(1) The office may revoke or suspend the registration of any security, or may deny any application to register securities, if, upon examination or investigation into the affairs of the issuer of such security, the office determines that:
(a) The issuer cannot pay its debts as they become due in the usual course of business;
(b) The issuer or any officer, director, manager or managing member, or control person of the issuer has violated any provision of this chapter or any rule made hereunder or any order of the office of which such issuer has notice;
(c) The issuer or any officer, director, manager or managing member, or control person of the issuer has been or is engaged or is about to engage in fraudulent transactions;
(d) The issuer or any officer, director, manager or managing member, or control person of the issuer has been found guilty of a fraudulent act in connection with any sale of securities, has engaged, is engaged, or is about to engage, in making a fictitious sale or purchase of any security, or in any practice or sale of any security which is fraudulent or a violation of any law;
(e) The issuer or any officer, director, manager or managing member, or control person of the issuer has had a final judgment entered against such issuer or person in a civil action on the grounds of fraud, embezzlement, misrepresentation, or deceit;
(f) The issuer or any officer, director, manager or managing member, or control person of the issuer has engaged in any action that would be grounds for revocation, denial, or suspension under s. 517.161(1);
(g) The issuer or any officer, director, manager or managing member, or control person of the issuer has made any fraudulent representations or failed to disclose any material information in any prospectus or in any circular or other literature that has been distributed concerning the issuer or its securities;
(h) The security registered or sought to be registered is the subject of an injunction entered by a court of competent jurisdiction or is the subject of an administrative stop-order or similar order prohibiting the offer or sale of the security; or
(i) For any security for which registration has been applied pursuant to s. 517.081, the terms of the offer or sale of such securities would not be fair, just, or equitable.
(2) In making such examination or investigation, the office shall have access to and may compel the production of all the books and papers of such issuer and may administer oaths to and examine the officers of such issuer or any other person connected therewith as to its business and affairs and may also require a balance sheet exhibiting the assets and liabilities of any such issuer or its income statement, or both, to be certified to by a public accountant either of this state or of any other state where the issuer’s business is located. Whenever the office deems it necessary, it may also require such balance sheet or income statement, or both, to be made more specific in such particulars as the office may require.
(3) If any issuer refuses to permit an examination or investigation to be made by the office, it shall be proper ground for revocation of registration.
(4) If the office deems it necessary, it may enter an order suspending the right to sell securities pending any examination or investigation, provided that the order shall state the office’s grounds for taking such action.
(5) Notice of the entry of such order shall be given personally or by mail to the issuer. Before such order is made final, the issuer shall, on application, be entitled to a hearing.
(6) The office may deny any request to terminate any registration or to withdraw any application for registration if the office believes that an act which would be grounds for denial, suspension, or revocation under this chapter has been committed.
517.12 Registration of dealers, associated persons, intermediaries, and investment advisers.—
(1) No dealer or associated person shall sell or offer for sale any securities in or from offices in this state or sell securities to persons in this state from offices outside this state, by mail or otherwise, unless the person is registered with the office as a dealer or as an associated person of a dealer pursuant to this section. The office shall not register any person as an associated person of a dealer unless the dealer with which the applicant seeks registration is lawfully registered with the office pursuant to this chapter.
(2) The registration requirements of this section do not apply in a transaction exempted by s. 517.061(1)-(6), (8), (9), (12), and (13).
(3) No investment adviser or associated person of an investment adviser or federal covered adviser shall engage in business from offices in this state, or render investment advice to persons of this state, by mail or otherwise, unless the federal covered adviser has made a notice-filing with the office pursuant to s. 517.1201 or the investment adviser is registered pursuant to the provisions of this chapter and associated persons of the federal covered adviser or investment adviser have been registered with the office pursuant to this section. The office shall not register any person or an associated person of a federal covered adviser or an investment adviser unless the federal covered adviser or investment adviser with which the applicant seeks registration is in compliance with the notice-filing requirements of s. 517.1201 or is lawfully registered with the office pursuant to this chapter. A dealer or associated person who is registered pursuant to this section may render investment advice upon notification to and approval from the office.
(4) No dealer or investment adviser shall conduct business from a branch office within this state unless the branch office is notice-filed with the office pursuant to s. 517.1202.
(5) A dealer, associated person, or investment adviser, in order to obtain registration, must file with the office a written application, on a form which the commission may by rule prescribe. The commission may establish, by rule, procedures for depositing fees and filing documents by electronic means provided such procedures provide the office with the information and data required by this section. Each dealer or investment adviser must also file an irrevocable written consent to service of civil process similar to that provided for in s. 517.101. The application shall contain such information as the commission or office may require concerning such matters as:
(a) The name of the applicant and the address of its principal office and each office in this state.
(b) The applicant’s form and place of organization; and, if the applicant is:
1. A corporation, a copy of its articles of incorporation and amendments to the articles of incorporation;
2. A limited liability company, a copy of its articles of organization with amendments to its articles; or
3. A partnership, a copy of the partnership agreement.
(c) The applicant’s proposed method of doing business and financial condition and history, including a certified financial statement showing all assets and all liabilities, including contingent liabilities of the applicant as of a date not more than 90 days prior to the filing of the application.
(d) The names and addresses of all associated persons of the applicant to be employed in this state and the offices to which they will be assigned.
(6) The application must also contain such information as the commission or office may require about the applicant; any member, principal, or director of the applicant or any person having a similar status or performing similar functions; any person directly or indirectly controlling the applicant; or any employee of a dealer or of an investment adviser rendering investment advisory services. Each applicant and any direct owners, principals, or indirect owners that are required to be reported on Form BD or Form ADV pursuant to subsection (14) shall submit fingerprints for live-scan processing in accordance with rules adopted by the commission. The fingerprints may be submitted through a third-party vendor authorized by the Department of Law Enforcement to provide live-scan fingerprinting. The costs of fingerprint processing shall be borne by the person subject to the background check. The Department of Law Enforcement shall conduct a state criminal history background check, and a federal criminal history background check must be conducted through the Federal Bureau of Investigation. The office shall review the results of the state and federal criminal history background checks and determine whether the applicant meets licensure requirements. The commission may waive, by rule, the requirement that applicants, including any direct owners, principals, or indirect owners that are required to be reported on Form BD or Form ADV pursuant to subsection (14), submit fingerprints or the requirement that such fingerprints be processed by the Department of Law Enforcement or the Federal Bureau of Investigation. The commission or office may require information about any such applicant or person concerning such matters as:
(a) The applicant’s or person’s full name, and any other names by which the applicant or person may have been known, and the applicant’s or person’s age, social security number, photograph, qualifications, and educational and business history.
(b) Any injunction or administrative order by a state or federal agency, national securities exchange, or national securities association involving a security or any aspect of a dealer’s or investment adviser’s regulated business and any injunction or administrative order by a state or federal agency regulating banking, insurance, finance, or small loan companies, real estate, mortgage brokers, or other related or similar industries, which injunctions or administrative orders relate to such person.
(c) The applicant’s or person’s conviction of, or plea of nolo contendere to, a criminal offense or the applicant’s or person’s commission of any acts which would be grounds for refusal of an application under s. 517.161.
(d) The names and addresses of other persons of whom the office may inquire as to the applicant’s or person’s character, reputation, and financial responsibility.
(7) The commission or office may require the applicant or one or more principals or general partners, or natural persons exercising similar functions, or any associated person applicant to successfully pass oral or written examinations. Because any principal, manager, supervisor, or person exercising similar functions shall be responsible for the acts of the associated persons affiliated with a dealer, the examination standards may be higher for a dealer, office manager, principal, or person exercising similar functions than for a nonsupervisory associated person. The commission may waive the examination process when it determines that such examinations are not in the public interest. The office shall waive the examination requirements for any person who has passed any tests as prescribed in s. 15(b)(7) of the Securities Exchange Act of 1934 that relates to the position to be filled by the applicant.
(8)(a) All dealers, except securities dealers who are designated by the Federal Reserve Bank of New York as primary government securities dealers or securities dealers registered as issuers of securities, shall comply with the net capital and ratio requirements imposed pursuant to the Securities Exchange Act of 1934. The commission may by rule require a dealer to file with the office any financial or operational information that is required to be filed by the Securities Exchange Act of 1934 or any rules adopted under such act.
(b) The commission may by rule require the maintenance of a minimum net capital for securities dealers who are designated by the Federal Reserve Bank of New York as primary government securities dealers and securities dealers registered as issuers of securities and investment advisers, or prescribe a ratio between net capital and aggregate indebtedness, to assure adequate protection for the investing public. The provisions of this section shall not apply to any investment adviser that maintains its principal place of business in a state other than this state, provided such investment adviser is registered in the state where it maintains its principal place of business and is in compliance with such state’s net capital requirements.
(9)(a) An applicant for registration shall pay an assessment fee of $200, in the case of a dealer or investment adviser, or $50, in the case of an associated person. An associated person may be assessed an additional fee to cover the cost for the fingerprints to be processed by the office. Such fee shall be determined by rule of the commission. Such fees become the revenue of the state, except for those assessments provided for under s. 517.131(2) until such time as the Securities Guaranty Fund satisfies the statutory limits, and are not returnable in the event that registration is withdrawn or not granted.
(b) The office shall waive the $50 assessment fee for an associated person required by paragraph (a) for an applicant who:
1. Is or was an active duty member of the United States Armed Forces. To qualify for the fee waiver, an applicant who is a former member of the United States Armed Forces must have received an honorable discharge upon separation or discharge from the United States Armed Forces;
2. Is married to a current or former member of the United States Armed Forces and is or was married to the member during any period of active duty; or
3. Is the surviving spouse of a member of the United States Armed Forces if the member was serving on active duty at the time of death.
An applicant seeking such fee waiver must submit proof, in a form prescribed by commission rule, that the applicant meets one of the qualifications in this paragraph.
(10)(a) If the office finds that the applicant has complied with the applicable registration provisions of this chapter and the rules made pursuant hereto, it shall register the applicant unless the applicant is otherwise disqualified for registration pursuant to law. The registration of each dealer, investment adviser, and associated person expires on December 31 of the year the registration became effective unless the registrant has renewed its registration on or before that date. Registration may be renewed by furnishing such information as the commission may require, together with payment of the fee required in paragraph (9)(a) for dealers, investment advisers, or associated persons and the payment of any amount lawfully due and owing to the office pursuant to any order of the office or pursuant to any agreement with the office. Any dealer, investment adviser, or associated person who has not renewed a registration by the time the current registration expires may request reinstatement of such registration by filing with the office, on or before January 31 of the year following the year of expiration, such information as may be required by the commission, together with payment of the fee required in paragraph (9)(a) for dealers, investment advisers, or associated persons and a late fee equal to the amount of such fee. Any reinstatement of registration granted by the office during the month of January shall be deemed effective retroactive to January 1 of that year.
(b) The office shall waive the $50 assessment fee for an associated person required by paragraph (9)(a) for a registrant renewing his or her registration who:
1. Is an active duty member of the United States Armed Forces or the spouse of such member;
2. Is or was a member of the United States Armed Forces and served on active duty within the 2 years preceding the expiration date of the registration pursuant to paragraph (a). To qualify for the fee waiver, a registrant who is a former member of the United States Armed Forces who served on active duty within the 2 years preceding the expiration date of the registration must have received an honorable discharge upon separation or discharge from the United States Armed Forces; or
3. Is the surviving spouse of a member of the United States Armed Forces if the member was serving on active duty at the time of death and died within the 2 years preceding the surviving spouse’s registration expiration date pursuant to paragraph (a).
A registrant seeking such fee waiver must submit proof, in a form prescribed by commission rule, that the registrant meets one of the qualifications in this paragraph.
(11)(a) The office may issue a license to a dealer, investment adviser, or associated person to evidence registration under this chapter. The office may require the return to the office of any license it may issue prior to issuing a new license.
(b) Every dealer, investment adviser, or federal covered adviser shall promptly file with the office, as prescribed by rules adopted by the commission, notice as to the termination of employment of any associated person registered for such dealer or investment adviser in this state and shall also furnish the reason or reasons for such termination.
(c) Each dealer or investment adviser shall designate in writing to, and register with, the office a manager for each office the dealer or investment adviser has in this state.
(12) Changes in registration occasioned by changes in personnel of a partnership or in the principals, copartners, officers, or directors of any dealer or investment adviser or by changes of any material fact or method of doing business shall be reported by written amendment in such form and at such time as the commission may specify. In any case in which a person or a group of persons, directly or indirectly or acting by or through one or more persons, proposes to purchase or acquire a controlling interest in a registered dealer or investment adviser, such person or group shall submit an initial application for registration as a dealer or investment adviser prior to such purchase or acquisition. The commission shall adopt rules providing for waiver of the application required by this subsection where control of a registered dealer or investment adviser is to be acquired by another dealer or investment adviser registered under this chapter or where the application is otherwise unnecessary in the public interest.
(13) Every dealer or investment adviser registered or required to be registered or branch office notice-filed or required to be notice-filed with the office shall keep records of all currency transactions in excess of $10,000 and shall file reports, as prescribed under the financial recordkeeping regulations in 31 C.F.R. part 103, with the office when transactions occur in or from this state. All reports required by this subsection to be filed with the office shall be confidential and exempt from s. 119.07(1) except that any law enforcement agency or the Department of Revenue shall have access to, and shall be authorized to inspect and copy, such reports.
(14)(a) In order to facilitate uniformity and streamline procedures for persons who are subject to registration or notification in multiple jurisdictions, the commission may adopt by rule uniform forms that have been approved by the Securities and Exchange Commission, and any subsequent amendments to such forms, if the forms are substantially consistent with the provisions of this chapter. Uniform forms that the commission may adopt to administer this section include, but are not limited to:
1. Form BR, Uniform Branch Office Registration Form, adopted October 2005.
2. Form U4, Uniform Application for Securities Industry Registration or Transfer, adopted October 2005.
3. Form U5, Uniform Termination Notice for Securities Industry Registration, adopted October 2005.
4. Form ADV, Uniform Application for Investment Adviser Registration, adopted October 2003.
5. Form ADV-W, Notice of Withdrawal from Registration as an Investment Adviser, adopted October 2003.
6. Form BD, Uniform Application for Broker-Dealer Registration, adopted July 1999.
7. Form BDW, Uniform Request for Broker-Dealer Withdrawal, adopted August 1999.
(b) In lieu of filing with the office the applications specified in subsection (5), the fees required by subsection (9), the renewals required by subsection (10), and the termination notices required by subsection (11), the commission may by rule establish procedures for the deposit of such fees and documents with the Central Registration Depository or the Investment Adviser Registration Depository of the Financial Industry Regulatory Authority, as developed under contract with the North American Securities Administrators Association, Inc.
(15) Except for securities dealers who are designated by the Federal Reserve Bank of New York as primary government securities dealers or securities dealers registered as issuers of securities, every applicant for initial or renewal registration as a securities dealer and every person registered as a securities dealer shall be registered as a broker or dealer with the Securities and Exchange Commission and shall be subject to insurance coverage by the Securities Investor Protection Corporation.
(16)(a) A dealer that is located in Canada, does not have an office or other physical presence in this state, and has made a notice-filing in accordance with this subsection is exempt from the registration requirements of this section and may effect transactions in securities with or for, or induce or attempt to induce the purchase or sale of any security by:
1. A person from Canada who is present in this state and with whom the Canadian dealer had a bona fide dealer-client relationship before the person entered the United States; or
2. A person from Canada who is present in this state and whose transactions are in a self-directed, tax-advantaged retirement plan in Canada of which the person is the holder or contributor.
(b) A notice-filing under this subsection must consist of documents the commission by rule requires to be filed, together with a consent to service of process and a nonrefundable filing fee of $200. The commission may establish by rule procedures for the deposit of fees and the filing of documents to be made by electronic means, if such procedures provide the office with the information and data required by this section.
(c) A Canadian dealer may make a notice-filing under this subsection if the dealer provides to the office:
1. A notice-filing in the form the commission requires by rule.
2. A consent to service of process.
3. Evidence that the Canadian dealer is registered as a dealer in the jurisdiction in which the dealer’s main office is located.
4. Evidence that the Canadian dealer is a member of a self-regulatory organization or stock exchange in Canada.
(d) The office may issue a permit to evidence the effectiveness of a notice-filing for a Canadian dealer.
(e) A notice-filing is effective upon receipt by the office. A notice-filing expires on December 31 of the year in which the filing becomes effective unless the Canadian dealer has renewed the filing on or before that date. A Canadian dealer may annually renew a notice-filing by furnishing to the office such information as the office requires together with a renewal fee of $200 and the payment of any amount due and owing the office pursuant to any agreement with the office. Any Canadian dealer who has not renewed a notice-filing by the time a current notice-filing expires may request reinstatement of such notice-filing by filing with the office, on or before January 31 of the year following the year the notice-filing expires, such information as the commission requires by rule, together with the payment of $200 and a late fee of $200. A reinstatement of a notice-filing granted by the office during the month of January is effective retroactively to January 1 of that year.
(f) An associated person who represents a Canadian dealer who has made a notice-filing under this subsection is exempt from the registration requirements of this section and may effect transactions in securities in this state as permitted for a dealer under paragraph (a) if such person is registered in the jurisdiction from which he or she is effecting transactions into this state.
(g) A Canadian dealer who has made a notice-filing under this subsection shall:
1. Maintain its provincial or territorial registration and its membership in a self-regulatory organization or stock exchange in good standing.
2. Provide the office upon request with its books and records relating to its business in this state as a dealer.
3. Provide the office upon request notice of each civil, criminal, or administrative action initiated against the dealer.
4. Disclose to its clients in this state that the dealer and its associated persons are not subject to the full regulatory requirements under this chapter.
5. Correct any inaccurate information within 30 days after the information contained in the notice-filing becomes inaccurate for any reason.
(h) An associated person representing a Canadian dealer who has made a notice-filing under this subsection shall:
1. Maintain provincial or territorial registration in good standing.
2. Provide the office upon request with notice of each civil, criminal, or administrative action initiated against such person.
(i) A notice-filing may be terminated by filing notice of such termination with the office. Unless another date is specified by the Canadian dealer, such notice is effective upon receipt of the notice by the office.
(j) All fees collected under this subsection become the revenue of the state, except those assessments provided for under s. 517.131(2), until the Securities Guaranty Fund has satisfied the statutory limits. Such fees are not returnable if a notice-filing is withdrawn.
(17) Every dealer or associated person registered or required to be registered with the office shall satisfy any continuing education requirements established by rule pursuant to law.
(18) The registration requirements of this section which apply to investment advisers and associated persons do not apply to a commodity trading adviser who:
(a) Is registered as such with the Commodity Futures Trading Commission pursuant to the Commodity Exchange Act.
(b) Advises or exercises trading discretion, with respect to foreign currency options listed and traded exclusively on the Philadelphia Stock Exchange, on behalf of an “appropriate person” as defined by the Commodity Exchange Act.
The exemption provided in this subsection does not apply to a commodity trading adviser who engages in other activities that require registration under this chapter.
(19) An intermediary may not engage in business in this state unless the intermediary is registered as a dealer or as an intermediary with the office pursuant to this section to facilitate the offer or sale of securities in accordance with s. 517.0611. An intermediary, in order to obtain registration, must file with the office a written application on a form prescribed by commission rule and pay a registration fee of $200. The fees under this subsection shall be deposited into the Regulatory Trust Fund of the office. The commission may establish by rule procedures for depositing fees and filing documents by electronic means if such procedures provide the office with the information and data required by this section. Each intermediary must also file an irrevocable written consent to service of civil process, as provided in s. 517.101.
(a) The application must contain such information as the commission or office may require concerning:
1. The name of the applicant and address of its principal office and each office in this state.
2. The applicant’s form and place of organization; and, if the applicant is:
a. A corporation, a copy of its articles of incorporation and amendments to the articles of incorporation;
b. A limited liability company, a copy of its articles of organization and amendments to the articles and a copy of the company’s operating agreement as may be amended; or
c. A partnership, a copy of the partnership agreement.
3. The website address where securities of the issuer will be offered.
4. Contact information.
(b) The application must also contain such information as the commission may require by rule about the applicant; any member, principal, or director of the applicant or any person having a similar status or performing similar functions; or any persons directly or indirectly controlling the applicant. Each applicant and any direct owners, principals, or indirect owners that are required to be reported on a form adopted by commission rule shall submit fingerprints for live-scan processing in accordance with rules adopted by the commission. The fingerprints may be submitted through a third-party vendor authorized by the Department of Law Enforcement to provide live-scan fingerprinting. The costs of fingerprint processing shall be borne by the person subject to the background check. The Department of Law Enforcement shall conduct a state criminal history background check, and a federal criminal history background check must be conducted through the Federal Bureau of Investigation. The office shall review the results of the state and federal criminal history background checks and determine whether the applicant meets registration requirements. The commission may waive, by rule, the requirement that applicants, including any direct owners, principals, or indirect owners, which are required to be reported on a form adopted by commission rule, submit fingerprints or the requirement that such fingerprints be processed by the Department of Law Enforcement or the Federal Bureau of Investigation. The commission, by rule, or the office may require information about any applicant or person, including:
1. The applicant’s or person’s full name and any other names by which the applicant or person may have been known and the applicant’s or person’s age, social security number, photograph, qualifications, and educational and business history.
2. Any injunction or administrative order by a state or federal agency, national securities exchange, or national securities association involving a security or any aspect of an intermediary’s regulated business and any injunction or administrative order by a state or federal agency regulating banking, insurance, finance, real estate, mortgage brokers, or other related or similar industries, which relate to such person.
3. The applicant’s or person’s conviction of, or plea of nolo contendere to, a criminal offense or the applicant’s or person’s commission of any acts that would be grounds for refusal of an application under s. 517.161.
(c) The application must be amended within 30 days if any information contained in the form becomes inaccurate for any reason.
(d) An intermediary or persons affiliated with the intermediary are not subject to any disqualification described in s. 517.1611 or Securities and Exchange Commission Rule 506(d), 17 C.F.R. 230.506(d), adopted pursuant to the Securities Act of 1933, as amended. Each director, officer, manager or managing member, control person of the issuer, any person occupying a similar status or performing a similar function, and each person holding more than 20 percent of the ownership interests of the intermediary is subject to this requirement.
(e) If the office finds that the applicant has complied with the applicable registration provisions of this chapter and the rules adopted thereunder, it shall register the applicant. The registration of each intermediary expires on December 31 of the year the registration became effective unless the registrant renews his or her registration on or before that date. Registration may be renewed by furnishing such information as the commission may require by rule, together with payment of a $200 fee and the payment of any amount due to the office pursuant to any order of the office or pursuant to any agreement with the office. An intermediary who has not renewed a registration by the time that the current registration expires may request reinstatement of such registration by filing with the office, on or before January 31 of the year following the year of expiration, such information as required by the commission, together with payment of the $200 fee and a late fee of $200. Any reinstatement of registration granted by the office during the month of January is deemed effective retroactive to January 1 of that year.
(20) The registration requirements of this section do not apply to any general lines insurance agent or life insurance agent licensed under chapter 626, with regard to the sale of a security as defined in s. 517.021(25)(g), if the individual is directly authorized by the issuer to offer or sell the security on behalf of the issuer and the issuer is a federally chartered savings bank subject to regulation by the Federal Deposit Insurance Corporation. Actions under this subsection constitute activity under the insurance agent’s license for purposes of ss. 626.611 and 626.621.
(21)(a) As used in this subsection, the term:
1. “Broker” has the same meaning as “dealer” as defined in s. 517.021.
2. “Control person” means an individual or entity that possesses the power, directly or indirectly, to direct the management or policies of a company through ownership of securities, by contract, or otherwise. A person is presumed to be a control person of a company if, with respect to a particular company, the person:
a. Is a director, a general partner, a member, or a manager of a limited liability company, or is an officer who exercises executive responsibility or has a similar status or function;
b. Has the power to vote 20 percent or more of a class of voting securities or has the power to sell or direct the sale of 20 percent or more of a class of voting securities; or
c. In the case of a partnership or limited liability company, may receive upon dissolution, or has contributed, 20 percent or more of the capital.
3. “Eligible privately held company” means a company that meets all of the following conditions:
a. The company does not have any class of securities which is registered, or which is required to be registered, with the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, 15 U.S.C. ss. 78a et seq., or with the office under s. 517.07, or for which the company files, or is required to file, summary and periodic information, documents, and reports under s. 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78o(d).
b. In the fiscal year immediately preceding the fiscal year during which the merger and acquisition broker begins to provide services for the securities transaction, the company, in accordance with its historical financial accounting records, has earnings before interest, taxes, depreciation, and amortization of less than $25 million or has gross revenues of less than $250 million. On July 1, 2021, and every 5 years thereafter, each dollar amount in this sub-subparagraph shall be adjusted by dividing the annual value of the Employment Cost Index for wages and salaries for private industry workers, or any successor index, as published by the Bureau of Labor Statistics, for the calendar year preceding the calendar year in which the adjustment is being made, by the annual value of such index or successor index for the calendar year ending December 31, 2012, and multiplying such dollar amount by the quotient obtained. Each dollar amount determined under this sub-subparagraph shall be rounded to the nearest multiple of $100,000.
4. “Merger and acquisition broker” means any broker and any person associated with a broker engaged in the business of effecting securities transactions solely in connection with the transfer of ownership of an eligible privately held company, regardless of whether that broker acts on behalf of a seller or buyer, through the purchase, sale, exchange, issuance, repurchase, or redemption of, or a business combination involving, securities or assets of the eligible privately held company.
5. “Public shell company” means a company that at the time of a transaction with an eligible privately held company:
a. Has any class of securities which is registered, or which is required to be registered, with the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, 15 U.S.C. ss. 78a et seq., or with the office under s. 517.07, or for which the company files, or is required to file, summary and periodic information, documents, and reports under s. 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78o(d);
b. Has nominal or no operations; and
c. Has nominal assets or no assets, assets consisting solely of cash and cash equivalents, or assets consisting of any amount of cash and cash equivalents and nominal other assets.
(b) Prior to the completion of any securities transaction described in s. 517.061(7), a merger and acquisition broker must receive written assurances from the control person with the largest percentage of ownership for both the buyer and seller engaged in the transaction that:
1. After the transaction is completed, any person who acquires securities or assets of the eligible privately held company, acting alone or in concert, will be a control person of the eligible privately held company or will be a control person for the business conducted with the assets of the eligible privately held company; and
2. If any person is offered securities in exchange for securities or assets of the eligible privately held company, such person will, before becoming legally bound to complete the transaction, receive or be given reasonable access to the most recent year-end financial statements of the issuer of the securities offered in exchange. The most recent year-end financial statements shall be customarily prepared by the issuer’s management in the normal course of operations. If the financial statements of the issuer are audited, reviewed, or compiled, the most recent year-end financial statements must include any related statement by the independent certified public accountant; a balance sheet dated not more than 120 days before the date of the exchange offer; and information pertaining to the management, business, results of operations for the period covered by the foregoing financial statements, and material loss contingencies of the issuer.
(c) A merger and acquisition broker engaged in a transaction exempt under s. 517.061(7) is exempt from registration under this section unless the merger and acquisition broker:
1. Directly or indirectly, in connection with the transfer of ownership of an eligible privately held company, receives, holds, transmits, or has custody of the funds or securities to be exchanged by the parties to the transaction;
2. Engages on behalf of an issuer in a public offering of any class of securities which is registered, or which is required to be registered, with the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, 15 U.S.C. ss. 78a et seq., or with the office under s. 517.07; or for which the issuer files, or is required to file, periodic information, documents, and reports under s. 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78o(d);
3. Engages on behalf of any party in a transaction involving a public shell company;
4. Is subject to a suspension or revocation of registration under s. 15(b)(4) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78o(b)(4);
5. Is subject to a statutory disqualification described in s. 3(a)(39) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78c(a)(39);
6. Is subject to a disqualification under the United States Securities and Exchange Commission Rule 506(d), 17 C.F.R. s. 230.506(d); or
7. Is subject to a final order described in s. 15(b)(4)(H) of the Securities Exchange Act of 1934, 15 U.S.C. s. 78o(b)(4)(H).
(22)(a) As used in this subsection, the term:
1. “Advisory affiliate” has the same meaning as in the Glossary of Terms to Form ADV, the uniform application for investment adviser registration, 17 C.F.R. s. 279.1.
2. “Exempt reporting adviser” has the same meaning as in the Glossary of Terms to Form ADV, the uniform application for investment adviser registration, 17 C.F.R. s. 279.1.
3. “Private fund adviser” means an investment adviser who provides advice to solely one or more qualifying private funds.
4. “Qualifying private fund” means:
a. A private fund that meets the definition of the term “qualifying private fund” in Securities and Exchange Commission Rule 203(m)-1, 17 C.F.R. s. 275.203(m)-1;
b. A private fund that meets the definition of the term “venture capital fund” in Securities and Exchange Commission Rule 203(l)-1, 17 C.F.R. s. 275.203(l)-1; or
c. A “venture capital operating company” as defined in 29 C.F.R. s. 2510.3-101(d) adopted by the United States Department of Labor under the Employee Retirement Income Security Act of 1974.
5. “3(c)(1) fund” means a qualifying private fund that is eligible for the exclusion from the definition of the term “investment company” under s. 3(c)(1) of the Investment Company Act of 1940, 15 U.S.C. s. 80a-3(c)(1), as amended.
(b) Subject to the additional requirements of paragraph (c), a private fund adviser is exempt from the registration requirements of this section if the private fund adviser satisfies the following conditions:
1. Neither the private fund adviser nor any of its advisory affiliates are subject to an event that would disqualify an issuer under Securities and Exchange Commission Rule 506(d)(1) of Regulation D, 17 C.F.R. s. 230.506(d)(1); and
2. The private fund adviser files with the office each report and amendment thereto that an exempt reporting adviser is required to file with the Securities and Exchange Commission pursuant to Securities and Exchange Commission Rule 204-4, 17 C.F.R. s. 275.204-4.
(c) In order to qualify for the exemption from the registration requirements of this section, a private fund adviser who advises at least one 3(c)(1) fund that is not a venture capital fund shall, in addition to satisfying the conditions specified in subparagraphs (b)1. and 2., comply with the following requirements:
1. The private fund adviser shall advise only those 3(c)(1) funds, other than venture capital funds, whose outstanding securities, other than short-term paper, are beneficially owned entirely by accredited investors; and
2. At the time of purchase, the private fund adviser shall disclose the following in writing to each beneficial owner of a 3(c)(1) fund that is not a venture capital fund:
a. All services, if any, to be provided to individual beneficial owners;
b. All duties, if any, the investment adviser owes to the beneficial owners; and
c. Any other material information affecting the rights or responsibilities of the beneficial owners.
(d) If a private fund adviser is registered with the Securities and Exchange Commission, the adviser is not eligible for the exemption from the registration requirements of this section and shall comply with the notice filing requirements applicable to federal covered advisers in s. 517.1201.
(e) A person is exempt from the registration requirements of this section if the person is employed by or associated with an investment adviser that is exempt from registration and does not otherwise act as an associated person of an investment adviser or federal covered adviser.
(f) The report filings and the amendments thereto described in subparagraph (b)2. shall be made electronically through the Investment Adviser Registration Depository of the Financial Industry Regulatory Authority. A report is deemed filed with the office when the report has been filed and accepted by the depository on the office’s behalf.
517.1201 Notice filing requirements for federal covered advisers.—
(1) It is unlawful for a person to transact business in this state as a federal covered adviser unless such person has made a notice filing with the office. A notice filing under this section shall consist of a copy of those documents that have been filed or are required to be filed by the federal covered adviser with the Securities and Exchange Commission that the Financial Services Commission by rule requires to be filed, together with a consent to service of process and a filing fee of $200. The commission may establish by rule procedures for the deposit of fees and the filing of documents to be made through electronic means, if the procedures provide to the office the information and data required by this section.
(2) A notice filing shall be effective upon receipt. A notice filing shall expire on December 31 of the year in which the filing became effective unless the federal covered adviser has renewed the filing on or before that date. A federal covered adviser may renew a notice filing by furnishing to the office such information that has been filed or is required to be filed with the Securities and Exchange Commission, as the Financial Services Commission or office may require, together with a renewal fee of $200 and the payment of any amount due and owing the office pursuant to any agreement with the office. Any federal covered adviser who has not renewed a notice filing by the time a current notice filing expires may request reinstatement of such notice filing by filing with the office, on or before January 31 of the year following the year the notice filing expires, such information that has been filed or is required to be filed with the Securities and Exchange Commission as may be required by the Financial Services Commission or office, together with the payment of $200 and a late fee equal to $200. Any reinstatement of a notice filing granted by the office during the month of January shall be deemed effective retroactive to January 1 of that year.
(3) The commission may require, by rule, a federal covered adviser who has made a notice filing pursuant to this section to file with the office copies of any amendments filed or required to be filed with the Securities and Exchange Commission.
(4) The office may issue a permit to evidence the effectiveness of a notice filing for a federal covered adviser.
(5) A notice filing may be terminated by filing notice of such termination with the office. Unless another date is specified by the federal covered adviser, such notice shall be effective upon its receipt by the office.
(6) All fees collected under this section become the revenue of the state, except for those assessments provided for under s. 517.131(2) until such time as the Securities Guaranty Fund satisfies the statutory limits, and are not returnable in the event that a notice filing is withdrawn.
517.1202 Notice-filing requirements for branch offices.—
(1) It is unlawful for a dealer or investment adviser to conduct business from a branch office in this state unless the dealer or investment adviser has made a branch office notice-filing with the office. A notice-filing under this section shall consist of a form that the commission may prescribe by rule. The commission may establish, by rule, procedures for the deposit of fees and filing of documents by electronic means if the procedures provide the office with the information and data required by this section.
(2) A notice-filing shall be effective upon receipt by the office of the form and filing fee. Each dealer and each investment adviser shall pay a filing fee of $100 for each branch office in this state.
(3) A notice-filing shall expire on December 31 of the year in which the filing became effective unless the dealer or investment adviser has renewed the filing on or before that date. A dealer or investment adviser may renew a branch office notice-filing by furnishing to the office such information as the commission or office may require, together with a renewal fee of $100 and the payment of any amount due and owing the office pursuant to any agreement with the office. Any dealer or investment adviser who has not renewed a branch office notice-filing by the time a current notice-filing expires may request reinstatement of such notice-filing by filing with the office, on or before January 31 of the year following the year the notice-filing expires, such information as the commission or office may require, together with the filing fee of $100 and a late fee equal to $100. Any reinstatement of a branch office notice-filing granted by the office during the month of January shall be deemed effective retroactive to January 1 of that year.
(4) A branch office notice-filing under this section shall be summarily suspended by the office if the notice-filer fails to provide to the office, within 30 days after a written request by the office, all of the information required by this section and the rules adopted under this section. The summary suspension shall be in effect for the branch office until such time as the notice-filer submits the requested information to the office, pays a fine as prescribed by s. 517.191(9), and a final order is entered. At such time, the suspension shall be lifted. For purposes of s. 120.60(6), failure to provide all information required by this section and the underlying rules constitutes immediate and serious danger to the public health, safety, and welfare. If the notice-filer fails to provide all of the requested information within a period of 90 days, the notice-filing shall be revoked by the office.
(5) Notification under this section may be revoked by the office if the notice-filer makes payment to the office for a branch office notice-filing with a check or electronic transmission of funds that is dishonored by the notice-filer’s financial institution.
(6) The commission may require, by rule, a dealer or investment adviser who has made a branch office notice-filing pursuant to this section to file amendments with the office.
(7) A branch office notice-filing may be terminated by filing notice of such termination with the office. Unless another date is specified by the dealer or investment adviser, such notice shall be effective upon its receipt by the office.
(8) All fees collected under this section become the revenue of the state, except for those assessments provided for under s. 517.131(2) until such time as the Securities Guaranty Fund satisfies the statutory limits, and are not returnable in the event that a branch office notice-filing is withdrawn.
517.1205 Registration of associated persons specific as to securities dealer, investment adviser, or federal covered adviser identified at time of registration approval.—Inasmuch as this chapter is intended to protect investors in securities offerings and other investment transactions regulated by that chapter, its provisions are to be construed to require full and fair disclosure of all, but only, those matters material to the investor’s evaluation of the offering or other transaction. It should, furthermore, be construed to impose the standards provided by law on all those seeking to participate in the state’s securities industry through registration as a securities dealer, investment adviser, or associated person. To this end, it is declared to be the intent of the Legislature that the registration of associated persons required by law is specific to the securities dealer, investment adviser, or federal covered adviser identified at the time such registration is approved. Notwithstanding any interpretation of law to the contrary, the historical practice of the Department of Banking and Finance, reflected in its rules, that requires a new application for registration from a previously registered associated person when that person seeks to be associated with a new securities dealer or investment adviser is hereby ratified and approved as consistent with legislative intent. It is, finally, declared to be the intent of the Legislature that while approval of an application for registration of a securities dealer, investment adviser, or associated person requires a finding of compliance with the applicable registration provisions of this chapter and applicable rules, such finding is precluded by a determination that the applicant may be denied registration on grounds provided by law.
517.121 Books and records requirements; examinations.—
(1) A dealer, investment adviser, branch office, associated person, or intermediary shall maintain such books and records as the commission may prescribe by rule.
(2) The office shall, at intermittent periods, examine the affairs and books and records of each registered dealer, investment adviser, associated person, intermediary, or branch office notice-filed with the office, or require such records and reports to be submitted to it as required by rule of the commission, to determine compliance with this act.
(3) Registration under s. 517.12 or notification under s. 517.1202 may be summarily suspended by the office pursuant to s. 120.60(6) if the registrant or notice-filed branch office fails to promptly provide to the office, after a written request, any of the records required by this section and the rules adopted under this section. The suspension may be rescinded if the registrant or notice-filed branch office submits the requested records to the office. For purposes of s. 120.60(6), failure to provide substantially all of such records constitutes immediate and serious danger to the public health, safety, and welfare.
517.1214 Continuing education requirements for associated persons of investment advisers and federal covered advisers.—
(1) As used in this section, the term:
(a) “Approved continuing education content” means the materials, written, oral, or otherwise, which have been approved by NASAA or its designee and which make up the educational program provided to an associated person under this section.
(b) “Credit” means a unit designated by NASAA or its designee as at least 50 minutes of educational instruction.
(c) “Home state” means the state in which an associated person of an investment adviser or a federal covered adviser has his or her principal office and place of business.
(d) “NASAA” means the North American Securities Administrators Association, Inc.
(e) “Reporting period” means one 12-month period beginning January 1 and ending December 31. An associated person’s initial reporting period with this state commences the first day of the first full reporting period after the individual is registered or required to be registered with this state.
(2) By December 31, 2024, and each December 31 thereafter, each associated person of an investment adviser or a federal covered adviser shall complete the following continuing education content requirements offered by a person that NASAA or its designee has authorized to provide the continuing education content required by this section:
(a) Six credits of approved continuing education content that addresses an associated person’s ethical and regulatory obligations, with at least 3 hours covering the topic of ethics; and
(b) Six credits of approved continuing education content that addresses an associated person’s skills and knowledge regarding financial products, investment features, and practices in the investment advisory industry.
(3) An associated person of an investment adviser or federal covered adviser who is also registered as an associated person of a Financial Industry Regulatory Authority (FINRA) member dealer and who complies with FINRA’s continuing education requirements is considered to be in compliance with this section’s products and practice requirement for each applicable reporting period, provided that the FINRA continuing education content is approved continuing education content.
(4) Credits of continuing education completed by an associated person who was awarded and currently holds a credential that qualifies for examination waiver by passing any tests as prescribed in s. 15(b)(7) of the Securities Exchange Act of 1934, as amended, comply with paragraphs (2)(a) and (b), provided all of the following conditions are met:
(a) The associated person completes the credits of continuing education as a condition of maintaining the credential for the relevant reporting period.
(b) The credits of continuing education completed during the relevant reporting period by the associated person are mandatory to maintain the credential.
(c) The continuing education content provided by the credentialing organization during the relevant reporting period is approved continuing education content.
(5) Each associated person is responsible for ensuring that the authorized provider reports the associated person’s completion of the applicable continuing education requirements.
(6) An associated person who completes credits of continuing education in excess of the credits required for the reporting period may not carry forward excess credits to a subsequent reporting period.
(7) An associated person who fails to comply with this section by the end of a reporting period shall renew as “CE inactive” at the close of the calendar year in this state until the associated person completes and reports all required continuing education credits for all reporting periods as required by this section. An associated person who is “CE inactive” at the close of the next calendar year is not eligible for associated person registration or renewal of associated person registration.
(8) An associated person registered or required to be registered in this state who is registered as an associated person of an investment adviser or federal covered adviser in the individual’s home state is considered to be in compliance with this section if:
(a) The associated person’s home state has a continuing education requirement of at least 12 hours annually; and
(b) The associated person is in compliance with the home state’s associated person of an investment adviser or federal covered adviser continuing education requirements.
(9) An associated person who was previously registered under s. 517.12 and became unregistered must complete continuing education for all reporting periods that occurred between the time that the associated person became unregistered and when the person became registered again under s. 517.12, unless the associated person takes and passes the required examinations or the examination requirements are waived in connection with the subsequent application for registration.
517.1215 Requirements, rules of conduct, and prohibited business practices for investment advisers and their associated persons.—
(1) The commission shall specify by rule requirements for investment advisers deemed to have custody of client funds which concern the following:
(a) Notification of custody of, maintenance of, and safeguards for client funds.
(b) Communications with clients and independent representatives.
(c) Requirements for investment advisers who have custody of pooled investments.
(d) Exceptions to the custody requirements.
In adopting the rules, the commission shall consider the rules and regulations of the federal regulatory authority and the North American Securities Administrators Association, Inc.
(2) The commission shall by rule establish rules of conduct and prohibited business practices for investment advisers and their associated persons. In adopting the rules, the commission shall consider general industry standards as expressed in the rules and regulations of the various federal and self-regulatory agencies and regulatory associations, including, but not limited to, the Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the North American Securities Administrators Association, Inc.
517.1217 Rules of conduct and prohibited business practices for dealers and their associated persons and for intermediaries.—The commission by rule may establish rules of conduct and prohibited business practices for dealers and their associated persons and for intermediaries. In adopting the rules, the commission shall consider general industry standards as expressed in the rules and regulations of the various federal and self-regulatory agencies and regulatory associations, including, but not limited to, the Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the North American Securities Administrators Association, Inc.
517.122 Arbitration.—Any agreement to provide services that are covered by this chapter, entered into after October 1, 1996, by a person required to register under this chapter, for arbitration of disputes arising under the agreement may provide to an aggrieved party the option of having arbitration before and pursuant to the rules of the American Arbitration Association or other independent nonindustry arbitration forum as well as any industry forum.
History.—ss. 9, 15, ch. 86-85; ss. 8, 14, 15, ch. 90-362; s. 4, ch. 91-429; s. 6, ch. 96-338.
517.131 Securities Guaranty Fund.—
(1) As used in this section, the term “final judgment” includes an arbitration award confirmed by a court of competent jurisdiction.
(2)(a) The Chief Financial Officer shall establish a Securities Guaranty Fund to provide monetary relief to victims of securities violations under this chapter who are entitled to monetary damages or restitution and cannot recover the full amount of such monetary damages or restitution from the wrongdoer. An amount not exceeding 20 percent of all revenues received as assessment fees pursuant to s. 517.12(9) and (10) for dealers and investment advisers or s. 517.1201 for federal covered advisers and an amount not exceeding 10 percent of all revenues received as assessment fees pursuant to s. 517.12(9) and (10) for associated persons must be part of the regular registration license fee and must be transferred to or deposited in the Securities Guaranty Fund.
(b) If the balance in the Securities Guaranty Fund at any time exceeds $1.5 million, transfer of assessment fees to the fund must be discontinued at the end of that registration year, and transfer of such assessment fees may not resume unless the fund balance is reduced below $1 million by disbursement made in accordance with s. 517.141.
(3) A person is eligible for payment from the Securities Guaranty Fund if the person:
(a)1. Holds an unsatisfied final judgment entered on or after October 1, 2024, in which a wrongdoer was found to have violated s. 517.07 or s. 517.301;
2. Has applied any amount recovered from the judgment debtor or any other source to the damages awarded by the court or arbitrator; and
3. Is a natural person who was a resident of this state, or is a business entity that was domiciled in this state, at the time of the violation of s. 517.07 or s. 517.301; or
(b) Is a receiver appointed pursuant to s. 517.191(2) by a court of competent jurisdiction for a wrongdoer ordered to pay restitution under s. 517.191(3) as a result of a violation of s. 517.07 or s. 517.301 which has requested payment from the Securities Guaranty Fund on behalf of a person eligible for payment under paragraph (a).
If a person holds an unsatisfied final judgment entered before October 1, 2024, in which a wrongdoer was found to have violated s. 517.07 or s. 517.301, such person’s claim for payment from the Securities Guaranty Fund shall be governed by the terms of this section and s. 517.141 which were effective on the date of such final judgment.
(4) A person who has done any of the following is not eligible for payment from the Securities Guaranty Fund:
(a) Participated or assisted in a violation of this chapter.
(b) Attempted to commit or committed a violation of this chapter.
(c) Profited from a violation of this chapter.
(5) An eligible person, or a receiver on behalf of the eligible person, seeking payment from the Securities Guaranty Fund must file with the office a written application on a form that the commission may prescribe by rule. The commission may adopt by rule procedures for filing documents by electronic means, provided that such procedures provide the office with the information and data required by this section. The application must be filed with the office within 1 year after the date of the final judgment, the date on which a restitution order has been ripe for execution, or the date of any appellate decision thereon, and, at minimum, must contain all of the following information:
(a) The eligible person’s and, if applicable, the receiver’s full names, addresses, and contact information.
(b) The person ordered to pay restitution.
(c) If the eligible person is a business entity, the eligible person’s type and place of organization and, as applicable, a copy, as amended, of its articles of incorporation, articles of organization, trust agreement, or partnership agreement.
(d) Any final judgment and a copy thereof.
(e) Any restitution order pursuant to s. 517.191(3), and a copy thereof.
(f) An affidavit from the eligible person stating either one of the following:
1. That the eligible person has made all reasonable searches and inquiries to ascertain whether the judgment debtor possesses real or personal property or other assets subject to being sold or applied in satisfaction of the final judgment and, by the eligible person’s search, that the eligible person has not discovered any property or assets.
2. That the eligible person has taken necessary action on the property and assets of the wrongdoers but the final judgment remains unsatisfied.
(g) If the application is filed by the receiver, an affidavit from the receiver stating the amount of restitution owed to the eligible person on whose behalf the claim is filed; the amount of any money, property, or assets paid to the eligible person on whose behalf the claim is filed by the person over whom the receiver is appointed; and the amount of any unsatisfied portion of any eligible person’s order of restitution.
(h) The eligible person’s residence or domicile at the time of the violation of s. 517.07 or s. 517.301 which resulted in the eligible person’s monetary damages.
(i) The amount of any unsatisfied portion of the eligible person’s final judgment.
(j) Whether an appeal or motion to vacate an arbitration award has been filed.
(6) If the office finds that a person is eligible for payment from the Securities Guaranty Fund and if the person has complied with this section and the rules adopted under this section, the office must approve payment to such person from the fund. Within 90 days after the office’s receipt of a complete application, each eligible person or receiver must be given written notice, personally or by mail, that the office intends to approve or deny, or has approved or denied, the application for payment from the Securities Guaranty Fund.
(7) Upon receipt by the eligible person or receiver of notice of the office’s decision that the eligible person’s or receiver’s application for payment from the Securities Guaranty Fund is approved, and before any disbursement, the eligible person shall assign to the office on a form prescribed by commission rule all right, title, and interest in the final judgment or order of restitution equal to the amount of such payment.
(8) The office shall deem an application for payment from the Securities Guaranty Fund abandoned if the eligible person or receiver, or any person acting on behalf of the eligible person or receiver, fails to timely complete the application as prescribed by commission rule. The time period to complete an application must be tolled during the pendency of an appeal or motion to vacate an arbitration award.
(a) “Claimant” means a person determined eligible for payment under s. 517.131 that is approved by the office for payment from the Securities Guaranty Fund.
(b) “Final judgment” includes an arbitration award confirmed by a court of competent jurisdiction.
(c) “Specified adult” has the same meaning as in s. 517.34(1).
(2) A claimant is entitled to disbursement from the Securities Guaranty Fund in the amount equal to the lesser of:
(a) The unsatisfied portion of the claimant’s final judgment or final order of restitution, but only to the extent that the final judgment or final order of restitution reflects actual or compensatory damages, excluding postjudgment interest, costs, and attorney fees; or
(b)1. The sum of $15,000; or
2. If the claimant is a specified adult or if a specified adult is a beneficial owner or beneficiary of the claimant, the sum of $25,000.
(3) Regardless of the number of claims or claimants involved, payments for claims are limited in the aggregate to $250,000 against any one person. If the total claim filed by a receiver on behalf of multiple claimants exceeds the aggregate limit of $250,000, the office must prorate the payment to each claimant based upon the ratio that each claimant’s individual claim bears to the total claim filed.
(4) If at any time the balance in the Securities Guaranty Fund is insufficient to satisfy a valid claim or portion of a valid claim approved by the office, the office must satisfy the unpaid claim or portion of the valid claim as soon as a sufficient amount of money has been deposited into or transferred to the Securities Guaranty Fund. If more than one unsatisfied claim is outstanding, the claims must be paid in the sequence in which the claims were approved by final order of the office, which final order is not subject to an appeal or other pending proceeding.
(5) All payments and disbursements made from the Securities Guaranty Fund must be made by the Chief Financial Officer, or his or her designee, upon authorization by the office. The office shall submit such authorization within 30 days after the approval of an eligible person for payment from the Securities Guaranty Fund.
(6) Individual claims filed by persons owning the same joint account, or claims arising from any other type of account on which more than one name appears, must be treated as the claims of one eligible claimant with respect to payment from the Securities Guaranty Fund. If a claimant who has obtained a final judgment or final order of restitution that qualifies for disbursement under s. 517.131 has maintained more than one account with the person who is the subject of the claims, for purposes of disbursement of the Securities Guaranty Fund, all such accounts, whether joint or individual, must be considered as one account and entitle such claimant to only one distribution from the fund. To the extent that a claimant obtains more than one final judgment or final order of restitution against a person arising out of the same transactions, occurrences, or conduct or out of such person’s handling of the claimant’s account, the final judgments or final orders of restitution must be consolidated for purposes of this section and entitle the claimant to only one disbursement from the fund.
(7) If the final judgment or final order of restitution that gave rise to the claim is overturned in any appeal or in any collateral proceeding, the claimant must reimburse the Securities Guaranty Fund all amounts paid from the fund to the claimant on the claim. If the claimant satisfies the final judgment or final order of restitution, the claimant must reimburse the Securities Guaranty Fund all amounts paid from the fund to the claimant on the claim. Such reimbursement must be paid to the Department of Financial Services within 60 days after the final resolution of the appellate or collateral proceedings or the satisfaction of the final judgment or order of restitution, with the 60-day period commencing on the date the final order or decision is entered in such proceedings.
(8) If a claimant receives payments in excess of that which is permitted under this chapter, the claimant must reimburse the Securities Guaranty Fund such excess within 60 days after the claimant receives such excess payment or after the payment is determined to be in excess of that permitted by law, whichever is later.
(9) A claimant who knowingly and willfully files or causes to be filed an application under s. 517.131 or documents supporting the application, any of which contain false, incomplete, or misleading information in any material aspect, forfeits all payments from the Securities Guaranty Fund and commits a violation of s. 517.301(1)(c).
(10) The Department of Financial Services may institute legal proceedings to enforce compliance with this section and with s. 517.131 to recover moneys owed to the Securities Guaranty Fund, and is entitled to recover interest, costs, and attorney fees in any action brought pursuant to this section in which the department prevails.
517.151 Investments of the fund.—The funds of the Securities Guaranty Fund shall be invested by the Chief Financial Officer under the same limitations as other state funds, and the interest earned thereon shall be deposited to the credit of the fund and available for the same purpose as other moneys deposited in the Securities Guaranty Fund.
517.161 Revocation, denial, or suspension of registration of dealer, investment adviser, intermediary, or associated person.—
(1) Registration under s. 517.12 may be denied or any registration granted may be revoked, restricted, or suspended by the office if the office determines that such applicant or registrant; any member, principal, or director of the applicant or registrant or any person having a similar status or performing similar functions; or any person directly or indirectly controlling the applicant or registrant:
(a) Has violated any provision of this chapter or any rule or order made under this chapter;
(b) Has made a material false statement in the application for registration;
(c) Has been guilty of a fraudulent act in connection with rendering investment advice or in connection with any sale of securities, has been or is engaged or is about to engage in making fictitious or pretended sales or purchases of any such securities or in any practice involving the rendering of investment advice or the sale of securities which is fraudulent or in violation of the law;
(d) Has made a misrepresentation or false statement to, or concealed any essential or material fact from, any person in the rendering of investment advice or the sale of a security to such person;
(e) Has failed to account to persons interested for all money and property received;
(f) Has not delivered, after a reasonable time, to persons entitled thereto securities held or agreed to be delivered by the dealer or investment adviser, as and when paid for, and due to be delivered;
(g) Is rendering investment advice or selling or offering for sale securities through any associated person not registered in compliance with this chapter;
(h) Has exercised management or policy control over or owned 10 percent or more of the securities of any dealer, intermediary, or investment adviser that has been declared bankrupt, or had a trustee appointed under the Securities Investor Protection Act; or is, in the case of a dealer, intermediary, or investment adviser, unable to pay its debts as they become due in the usual course of business;
(i) Has been convicted of, or has entered a plea of guilty or nolo contendere to, regardless of whether adjudication was withheld, a crime against the laws of this state or any other state or of the United States or of any other country or government which relates to registration as a dealer, investment adviser, issuer of securities, intermediary, or associated person; which relates to the application for such registration; or which involves moral turpitude or fraudulent or dishonest dealing;
(j) Has had a final judgment entered against her or him in a civil action upon grounds of fraud, embezzlement, misrepresentation, or deceit;
(k) Has been the subject of any decision, finding, injunction, suspension, prohibition, revocation, denial, judgment, or administrative order by any court of competent jurisdiction, administrative law judge, or by any state or federal agency, national securities, commodities, or option exchange, or national securities, commodities, or option association, involving a violation of any federal or state securities or commodities law or any rule or regulation promulgated thereunder, or any rule or regulation of any national securities, commodities, or options exchange or national securities, commodities, or options association, or has been the subject of any injunction or adverse administrative order by a state or federal agency regulating banking, insurance, finance, real estate, mortgage brokers or lenders, money transmitters, or other related or similar industries. For purposes of this subsection, the office may not deny registration to any applicant who has been continuously registered with the office for 5 years after the date of entry of such decision, finding, injunction, suspension, prohibition, revocation, denial, judgment, or administrative order provided such decision, finding, injunction, suspension, prohibition, revocation, denial, judgment, or administrative order has been timely reported to the office pursuant to the commission’s rules;
(l) Made payment to the office for a registration with a check or electronic transmission of funds that is dishonored by the applicant’s or registrant’s financial institution;
(m) Failed to pay and fully satisfy any final judgment or arbitration award resulting from an investment-related, client- or customer-initiated arbitration or court proceeding, unless alternative payment arrangements are agreed to in writing between the client or customer and the investment adviser, dealer, or associated person and the investment adviser, dealer, or associated person complies with the terms of the alternative payment arrangement;
(n) Attempted to avoid payment of any final judgment or arbitration award resulting from an investment-related, client- or customer-initiated arbitration or court proceeding, unless alternative payment arrangements are agreed to in writing between the client or customer and the investment adviser, dealer, or associated person and the investment adviser, dealer, or associated person complies with the terms of the alternative payment arrangements; or
(o) Failed to pay and fully satisfy any fine, civil penalty, order of restitution, order of disgorgement, or similar monetary payment obligation imposed upon the investment adviser, dealer, or associated person by the Securities and Exchange Commission, the securities regulator or other financial services regulator of any state or province, or any securities industry self-regulatory organization.
(2) The payment or anticipated payment of any amount from the Securities Guaranty Fund in settlement of a claim or in satisfaction of a judgment against an applicant or registrant constitutes prima facie grounds for the denial of the applicant’s application for registration or the revocation of the registrant’s registration.
(3) In the event the office determines to deny an application or revoke a registration, it shall enter a final order with its findings on the register of dealers and associated persons; and denial, suspension, or revocation of the registration of a dealer, intermediary, or investment adviser shall also deny, suspend, or revoke the registration of all her or his associated persons.
(4) It shall be sufficient cause for denial of an application or revocation of registration, in the case of a partnership, corporation, limited liability company, or unincorporated association, if any member of the partnership; any manager or managing member of the limited liability company; or any officer, director, or ultimate equitable owner of the corporation or association has committed any act or omission which would be cause for denying, revoking, restricting, or suspending the registration of an individual dealer, investment adviser, intermediary, or associated person. As used in this subsection, the term “ultimate equitable owner” means a natural person who directly or indirectly owns or controls an ownership interest in the corporation, partnership, association, or other legal entity however organized, regardless of whether such natural person owns or controls such ownership interest through one or more proxies, powers of attorney, nominees, corporations, associations, partnerships, trusts, joint stock companies, or other entities or devices, or any combination thereof.
(5) The office may deny any request to terminate or withdraw any application or registration if the office believes that an act that would be a ground for denial, suspension, restriction, or revocation under this chapter has been committed.
(6) Registration under s. 517.12 may be denied or any registration granted may be suspended or restricted if an applicant or registrant is charged, in a pending enforcement action or pending criminal prosecution, with any conduct that would authorize denial or revocation under subsection (1). Registration under s. 517.12 may be suspended or restricted if a registrant is arrested for any conduct that would authorize revocation under subsection (1).
(a) Any denial of registration ordered under this subsection shall be without prejudice to the applicant’s ability to reapply for registration.
(b) Any order of suspension or restriction under this subsection shall:
1. Take effect only after a hearing, unless no hearing is requested by the registrant or unless the suspension or restriction is made in accordance with s. 120.60(6).
2. Contain a finding that evidence of a prima facie case supports the charge made in the enforcement action or criminal prosecution.
3. Operate for no longer than 10 days beyond receipt of notice by the office of termination with respect to the registrant of the enforcement action or criminal prosecution.
(c) For purposes of this subsection:
1. The term “enforcement action” means any judicial proceeding or any administrative proceeding where such judicial or administrative proceeding is brought by an agency of the United States or of any state to enforce or restrain violation of any state or federal law, or any disciplinary proceeding maintained by the Financial Industry Regulatory Authority, the National Futures Association, or any other similar self-regulatory organization.
2. An enforcement action is pending at any time after notice to the applicant or registrant of such action and is terminated at any time after entry of final judgment or decree in the case of judicial proceedings, final agency action in the case of administrative proceedings, and final disposition by a self-regulatory organization in the case of disciplinary proceedings.
3. A criminal prosecution is pending at any time after criminal charges are filed and is terminated at any time after conviction, acquittal, or dismissal.
(1) The commission shall adopt by rule disciplinary guidelines applicable to each ground for disciplinary action that may be imposed by the office.
(a) The disciplinary guidelines shall specify a range of penalties based upon the severity and repetition of specific offenses. The disciplinary guidelines shall distinguish minor violations from violations that endanger the public health, safety, or welfare; provide reasonable notice to the public of penalties that may be imposed for proscribed conduct; and ensure that penalties are imposed in a consistent manner by the office.
(b) The commission shall identify mitigating and aggravating circumstances by rule that allow the office to impose a penalty other than that specified in the guidelines.
(2) The commission shall adopt by rule disqualifying periods pursuant to which an applicant will be disqualified from eligibility for registration based upon criminal convictions, pleas of nolo contendere, or pleas of guilt, regardless of whether adjudication was withheld, by the applicant; any partner, member, officer, or director of the applicant or any person having a similar status or performing similar functions; or any person directly or indirectly controlling the applicant.
(a) The disqualifying periods shall be 15 years for a felony and 5 years for a misdemeanor.
(b) The disqualifying periods shall be related to crimes involving registration as a dealer, investment adviser, issuer of securities, or associated person or the application for such registration or involving moral turpitude or fraudulent or dishonest dealing.
(c) The rules may also address mitigating factors, an additional waiting period based upon dates of imprisonment or community supervision, an additional waiting period based upon commitment of multiple crimes, and other factors reasonably related to the consideration of an applicant’s criminal history.
(d) An applicant is not eligible for registration until the expiration of the disqualifying period set by rule. Section 112.011 does not apply to the registration provisions under this chapter. Nothing in this section changes or amends the grounds for denial under s. 517.161.
517.171 Burden of proof.—It shall not be necessary to negate any of the exemptions provided in this chapter in any complaint, information, indictment, or other writ or proceedings brought under this chapter; and the burden of establishing the right to any exemption shall be upon the party claiming the benefit of such exemption.
517.191 Enforcement by the Office of Financial Regulation; enforcement by Attorney General.—
(1) When it appears to the office, either upon complaint or otherwise, that a person has engaged or is about to engage in any act or practice constituting a violation of this chapter or a rule or order hereunder, the office may investigate; and whenever it shall believe from evidence satisfactory to it that any such person has engaged, is engaged, or is about to engage in any act or practice constituting a violation of this chapter or a rule or order hereunder, the office may, in addition to any other remedies, bring action in the name and on behalf of the state against such person and any other person concerned in or in any way participating in or about to participate in such practices or engaging therein or doing any act or acts in furtherance thereof or in violation of this chapter to enjoin such person or persons from continuing such fraudulent practices or engaging therein or doing any act or acts in furtherance thereof or in violation of this chapter. In any such court proceedings, the office may apply for, and on due showing be entitled to have issued, the court’s subpoena requiring forthwith the appearance of any defendant and her or his employees, associated persons, or agents and the production of documents, books, and records that may appear necessary for the hearing of such petition, to testify or give evidence concerning the acts or conduct or things complained of in such application for injunction. In such action, the courts shall have jurisdiction of the subject matter, and a judgment may be entered awarding such injunction as may be proper.
(2) In addition to all other means provided by law for the enforcement of any temporary restraining order, temporary injunction, or permanent injunction issued in any such court proceedings, the court shall have the power and jurisdiction, upon application of the office, to impound and to appoint a receiver or administrator for the property, assets, and business of the defendant, including, but not limited to, the books, records, documents, and papers appertaining thereto. Such receiver or administrator, when appointed and qualified, shall have all powers and duties as to custody, collection, administration, winding up, and liquidation of such property and business as may be conferred upon her or him by the court. In any such action, the court may issue orders and decrees staying all pending suits and enjoining any further suits affecting the receiver’s or administrator’s custody or possession of such property, assets, and business or, in its discretion, may with the consent of the presiding judge of the circuit require that all such suits be assigned to the circuit court judge appointing such receiver or administrator.
(3) In addition to, or in lieu of, any other remedies provided by this chapter, the office may apply to the court hearing the matter for an order directing the defendant to make restitution of those sums shown by the office to have been obtained in violation of this chapter. The office has standing to request such restitution on behalf of victims in cases brought by the office under this chapter, regardless of the appointment of an administrator or receiver under subsection (2) or an injunction under subsection (1). Further, such restitution must, at the option of the court, be payable to the administrator or receiver appointed pursuant to this section or directly to the persons whose assets were obtained in violation of this chapter.
(4) In addition to any other remedies provided by this chapter, the office may apply to the court hearing the matter for, and the court has jurisdiction to impose, a civil penalty against any person found to have violated this chapter, any rule or order adopted by the commission or the office, or any written agreement entered into with the office in an amount not to exceed any of the following:
(a) The greater of $20,000 for a natural person or $25,000 for a business entity, or the gross amount of any pecuniary loss to investors or pecuniary gain to a natural person or business entity for each such violation, other than a violation of s. 517.301, plus the greater of $50,000 for a natural person or $250,000 for a business entity, or the gross amount of any pecuniary loss to investors or pecuniary gain to a natural person or business entity for each violation of s. 517.301.
(b) Twice the amount of the civil penalty that would otherwise be imposed under this subsection if a specified adult, as defined in s. 517.34(1), is the victim of a violation of this chapter.
All civil penalties collected pursuant to this subsection must be deposited into the Anti-Fraud Trust Fund. The office may recover any costs and attorney fees related to its investigation or enforcement of this section. Notwithstanding any other law, such moneys recovered by the office must be deposited into the Anti-Fraud Trust Fund.
(5) For purposes of any action brought by the office under this section, a control person who controls any person found to have violated this chapter or any rule adopted thereunder is jointly and severally liable with, and to the same extent as, the controlled person in any action brought by the office under this section unless the control person can establish by a preponderance of the evidence that he or she acted in good faith and did not directly or indirectly induce the act that constitutes the violation or cause of action.
(6) For purposes of any action brought by the office under this section, a person who knowingly or recklessly provides substantial assistance to another person in violation of this chapter or any rule adopted thereunder is deemed to violate this chapter or the rule to the same extent as the person to whom such assistance is provided.
(7) The office may issue and serve upon a person a cease and desist order if the office has reason to believe that the person violates, has violated, or is about to violate this chapter, any commission or office rule or order, or any written agreement entered into with the office.
(8) If the office finds that any conduct described in subsection (7) presents an immediate danger to the public, requiring an immediate final order, the office may issue an emergency cease and desist order reciting with particularity the facts underlying such findings. The emergency cease and desist order is effective immediately upon service of a copy of the order on the respondent named in the order and remains effective for 90 days after issuance. If the office begins nonemergency cease and desist proceedings under subsection (7), the emergency cease and desist order remains effective until the conclusion of the proceedings under ss. 120.569 and 120.57.
(9) The office may impose and collect an administrative fine against any person found to have violated any provision of this chapter, any rule or order adopted by the commission or office, or any written agreement entered into with the office in an amount not to exceed the penalties provided in subsection (4). All fines collected under this subsection must be deposited into the Anti-Fraud Trust Fund.
(10) The office may bar, permanently or for a specific period of time, any person found to have violated this chapter, any rule or order adopted by the commission or office, or any written agreement entered into with the office from submitting an application or notification for a license or registration with the office.
(11) In addition to all other means provided by law for enforcing this chapter, when the Attorney General, upon complaint or otherwise, has reason to believe that a person has engaged or is engaged in any act or practice constituting a violation of s. 517.275 or s. 517.301, or any rule or order issued under such sections, the Attorney General may investigate and bring an action to enforce these provisions as provided in ss. 517.171, 517.201, and 517.2015 after receiving written approval from the office. Such an action may be brought against such person and any other person in any way participating in such act or practice or engaging in such act or practice or doing any act in furtherance of such act or practice, to obtain injunctive relief, restitution, civil penalties, and any remedies provided for in this section. The Attorney General may recover any costs and attorney fees related to the Attorney General’s investigation or enforcement of this section. Notwithstanding any other provision of law, moneys recovered by the Attorney General for costs, attorney fees, and civil penalties for a violation of s. 517.275 or s. 517.301, or any rule or order issued pursuant to such sections, must be deposited in the Legal Affairs Revolving Trust Fund. The Legal Affairs Revolving Trust Fund may be used to investigate and enforce this section.
(12) This section does not limit the authority of the office to bring an administrative action against any person that is the subject of a civil action brought pursuant to this section or limit the authority of the office to engage in investigations or enforcement actions with the Attorney General. However, a person may not be subject to both a civil penalty under subsection (4) and an administrative fine under subsection (9) as the result of the same facts.
(13) Notwithstanding s. 95.11(5)(f), an enforcement action brought under this section based on a violation of this chapter or any rule or order issued under this chapter shall be brought within 6 years after the facts giving rise to the cause of action were discovered or should have been discovered with the exercise of due diligence, but not more than 8 years after the date such violation occurred.
(14) This chapter does not limit any statutory right of the state to punish a person for a violation of a law.
(15) When not in conflict with the Constitution or laws of the United States, the courts of this state have the same jurisdiction over civil suits instituted in connection with the sale or offer of sale of securities under any laws of the United States as the courts of this state may have with regard to similar cases instituted under the laws of this state.
(a) May make investigations and examinations within or outside of this state as it deems necessary:
1. To determine whether a person has violated or is about to violate any provision of this chapter or a rule or order hereunder; or
2. To aid in the enforcement of this chapter.
(b) May require or permit a person to file a statement in writing, under oath or otherwise as the office determines, as to all the facts and circumstances concerning the matter to be investigated.
(2) When it is proposed to conduct an investigation or examination, the office may gather evidence in the matter. The office may administer oaths, examine witnesses, and issue subpoenas.
(3) Subpoenas for witnesses whose evidence is deemed material to any investigation or examination may be issued by the office under the seal of the office, or by any county court judge or clerk of the circuit court or county court, commanding such witnesses to be or appear before the office at a time and place to be therein named and to bring such books, records, and documents as may be specified or to submit such books, records, and documents to inspection; and such subpoenas may be served by an authorized representative of the office.
(4)(a) In the event of substantial noncompliance with a subpoena or subpoena duces tecum issued or caused to be issued by the office pursuant to this section, the office may petition the circuit court of the county in which the person subpoenaed resides or has its principal place of business for an order requiring the subpoenaed person to appear and testify and to produce such books, records, and documents as are specified in such subpoena duces tecum. The court may grant injunctive relief restraining the issuance, sale or offer for sale, purchase or offer to purchase, promotion, negotiation, advertisement, or distribution of securities or investments in or from this state by the noncompliant person or its agent, employee, broker, partner, officer, director, manager, managing member, equity holder, or any person directly or indirectly controlling the noncompliant person, and may grant such other relief, including, but not limited to, the restraint, by injunction or appointment of a receiver, of any transfer, pledge, assignment, or other disposition of such person’s assets or any concealment, alteration, destruction, or other disposition of subpoenaed books, records, or documents, as the court deems appropriate, until such person has fully complied with such subpoena or subpoena duces tecum and the office has completed its investigation or examination. The office is entitled to the summary procedure provided in s. 51.011, and the court shall advance the cause on its calendar. Costs incurred by the office to obtain an order granting, in whole or in part, such petition for enforcement of a subpoena or subpoena duces tecum shall be taxed against the subpoenaed person, and failure to comply with such order shall be a contempt of court.
(b) When it shall appear to the office that the compliance with a subpoena or subpoena duces tecum issued or caused to be issued by the office pursuant to this section is essential and otherwise unavailable to an investigation or examination, the office, in addition to the other remedies provided for herein, may, by verified petition setting forth the facts, apply to the circuit court of the county in which the subpoenaed person resides or has its principal place of business for a writ of ne exeat. The court shall thereupon direct the issuance of the writ against the subpoenaed person requiring sufficient bond conditioned on compliance with the subpoena or subpoena duces tecum. The court shall cause to be endorsed on the writ a suitable amount of bond on payment of which the person named in the writ shall be freed, having a due regard to the nature of the case.
(5) Witnesses shall be entitled to the same fees and mileage as they may be entitled by law for attending as witnesses in the circuit court, except where such examination or investigation is held at the place of business or residence of the witness.
517.2015 Confidentiality of information relating to investigations and examinations.—
(1)(a) Except as otherwise provided by this section, information relative to an investigation or examination by the office pursuant to this chapter, including any consumer complaint, is confidential and exempt from s. 119.07(1) until the investigation or examination is completed or ceases to be active. The information compiled by the office in such an investigation or examination shall remain confidential and exempt from s. 119.07(1) after the office’s investigation or examination is completed or ceases to be active if the office submits the information to any law enforcement or administrative agency or regulatory organization for further investigation. Such information shall remain confidential and exempt from s. 119.07(1) until that agency’s or organization’s investigation is completed or ceases to be active. For purposes of this section, an investigation or examination shall be considered “active” so long as the office or any law enforcement or administrative agency or regulatory organization is proceeding with reasonable dispatch and has a reasonable good faith belief that the investigation or examination may lead to the filing of an administrative, civil, or criminal proceeding or to the denial or conditional grant of a license, registration, or permit. This section shall not be construed to prohibit disclosure of information which is required by law to be filed with the office and which, but for the investigation or examination, would be subject to s. 119.07(1).
(b) Except as necessary for the office to enforce the provisions of this chapter, a consumer complaint and other information relative to an investigation or examination shall remain confidential and exempt from s. 119.07(1) after the investigation or examination is completed or ceases to be active to the extent disclosure would:
1. Jeopardize the integrity of another active investigation or examination.
2. Reveal the name, address, telephone number, social security number, or any other identifying number or information of any complainant, customer, or account holder.
3. Disclose the identity of a confidential source.
4. Disclose investigative techniques or procedures.
5. Reveal a trade secret as defined in s. 688.002.
(c) In the event that office personnel are or have been involved in an investigation or examination of such nature as to endanger their lives or physical safety or that of their families, then the home addresses, telephone numbers, places of employment, and photographs of such personnel, together with the home addresses, telephone numbers, photographs, and places of employment of spouses and children of such personnel and the names and locations of schools and day care facilities attended by the children of such personnel are confidential and exempt from s. 119.07(1).
(d) Nothing in this section shall be construed to prohibit the office from providing information to any law enforcement or administrative agency or regulatory organization. Any law enforcement or administrative agency or regulatory organization receiving confidential information in connection with its official duties shall maintain the confidentiality of the information so long as it would otherwise be confidential.
(e) All information obtained by the office from any person which is only made available to the office on a confidential or similarly restricted basis shall be confidential and exempt from s. 119.07(1). This exemption shall not be construed to prohibit disclosure of information which is required by law to be filed with the office or which is otherwise subject to s. 119.07(1).
(2) If information subject to subsection (1) is offered in evidence in any administrative, civil, or criminal proceeding, the presiding officer may, in her or his discretion, prevent the disclosure of information which would be confidential pursuant to paragraph (1)(b).
(3) A privilege against civil liability is granted to a person who furnishes information or evidence to the office, unless such person acts in bad faith or with malice in providing such information or evidence.
517.2016 Public records exemption; examination techniques or procedures.—
(1) As used in this section, the term “examination techniques or procedures” means the methods, processes, and guidelines used to evaluate regulatory compliance and to collect and analyze data, records, and testimony for the purpose of documenting violations of this chapter and the rules adopted thereunder.
(2) Information that would reveal examination techniques or procedures used by the office pursuant to this chapter is confidential and exempt from s. 119.07(1) and s. 24(a), Art. I of the State Constitution. This exemption applies to such information held by the office before, on, or after the effective date of this exemption.
(3) Confidential and exempt information that would reveal examination techniques or procedures may be provided by the office to another governmental entity having oversight or regulatory or law enforcement authority.
517.211 Private remedies available in cases of unlawful sale.—
(1) Every sale made in violation of either s. 517.07 or s. 517.12(1), (3), (4), (8), (10), (12), (15), or (17) may be rescinded at the election of the purchaser; however, a sale made in violation of the provisions of s. 517.1202(3) relating to a renewal of a branch office notification or in violation of the provisions of s. 517.12(12) relating to filing a change of address amendment is not subject to this section. Each person making the sale and every director, officer, partner, or agent of or for the seller, if the director, officer, partner, or agent has personally participated or aided in making the sale, is jointly and severally liable to the purchaser in an action for rescission, if the purchaser still owns the security, or for damages, if the purchaser has sold the security. No purchaser otherwise entitled will have the benefit of this subsection who has refused or failed, within 30 days after receipt, to accept an offer made in writing by the seller, if the purchaser has not sold the security, to take back the security in question and to refund the full amount paid by the purchaser or, if the purchaser has sold the security, to pay the purchaser an amount equal to the difference between the amount paid for the security and the amount received by the purchaser on the sale of the security, together, in either case, with interest on the full amount paid for the security by the purchaser at the legal rate, pursuant to s. 55.03, for the period from the date of payment by the purchaser to the date of repayment, less the amount of any income received by the purchaser on the security.
(2) Any person purchasing or selling a security in violation of s. 517.301, and every director, officer, partner, or agent of or for the purchaser or seller, if the director, officer, partner, or agent has personally participated or aided in making the sale or purchase, is jointly and severally liable to the person selling the security to or purchasing the security from such person in an action for rescission, if the plaintiff still owns the security, or for damages, if the plaintiff has sold the security.
(3) For purposes of any action brought under this section, a control person who controls any person found to have violated any provision specified in subsection (1) is jointly and severally liable with, and to the same extent as, such controlled person in any action brought under this section unless the control person can establish by a preponderance of the evidence that he or she acted in good faith and did not directly or indirectly induce the act that constitutes the violation or cause of action.
(4) In an action for rescission:
(a) A purchaser may recover the consideration paid for the security or investment, plus interest thereon at the legal rate from the date of purchase, less the amount of any income received by the purchaser on the security or investment upon tender of the security or investment.
(b) A seller may recover the security upon tender of the consideration paid for the security, plus interest at the legal rate from the date of purchase, less the amount of any income received by the defendant on the security.
(5) In an action for damages brought by a purchaser of a security or investment, the plaintiff must recover an amount equal to the difference between:
(a) The consideration paid for the security or investment, plus interest thereon at the legal rate from the date of purchase; and
(b) The value of the security or investment at the time it was disposed of by the plaintiff, plus the amount of any income received on the security or investment by the plaintiff.
(6) In an action for damages brought by a seller of a security, the plaintiff shall recover an amount equal to the difference between:
(a) The value of the security at the time of the complaint, plus the amount of any income received by the defendant on the security; and
(b) The consideration received for the security, plus interest at the legal rate from the date of sale.
(7) In any action brought under this section, including an appeal, the court shall award reasonable attorney fees to the prevailing party unless the court finds that the award of such fees would be unjust.
(8) This chapter does not limit any statutory or common-law right of a person to bring an action in a court for an act involved in the sale of securities or investments.
(9) The same civil remedies provided by the laws of the United States for the purchasers or sellers of securities in interstate commerce also extend to purchasers or sellers of securities under this chapter.
517.275 Commodities; prohibited practices.—It is unlawful and a violation of this chapter for any person to engage in any act or practice in or from this state, which act or practice constitutes a violation of any provision of the Commodity Exchange Act, 7 U.S.C. ss. 1 et seq., as amended, or the rules and regulations of the Commodity Futures Trading Commission adopted under that act as amended.
517.301 Fraudulent transactions; falsification or concealment of facts.—
(1) It is unlawful and a violation of this chapter for a person:
(a) In connection with the rendering of any investment advice or in connection with the offer, sale, or purchase of any investment or security, including any security exempted under s. 517.051 and including any security sold in a transaction exempted under s. 517.061, s. 517.0611, or s. 517.0612, directly or indirectly:
1. To employ any device, scheme, or artifice to defraud;
2. To obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or
3. To engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon a person.
(b) By use of any means, to publish, give publicity to, or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, communication, or broadcast that, although not purporting to offer a security for sale, describes such security for a consideration received or to be received directly or indirectly from an issuer, underwriter, or dealer, or from an agent or employee of an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount of the consideration.
(c) In any matter within the jurisdiction of the office, to knowingly and willfully falsify, conceal, or cover up, by any trick, scheme, or device, a material fact, make any false, fictitious, or fraudulent statement or representation, or make or use any false writing or document, knowing the same to contain any false, fictitious, or fraudulent statement or entry.
(2) For purposes of this section, the term “investment” means any commitment of money or property principally induced by a representation that an economic benefit may be derived from such commitment, except that the term does not include a commitment of money or property for:
(a) The purchase of a business opportunity, business enterprise, or real property through a person licensed under chapter 475 or registered under former chapter 498; or
(b) The purchase of tangible personal property through a person not engaged in telephone solicitation, electronic mail, text messages, social media, or other electronic means where there are no specific representations or guarantees made by the offeror or seller as to the economic benefit to be derived from the purchase.
(3) It is unlawful for a person in issuing or selling a security within this state, including a security exempted under s. 517.051 and including a transaction exempted under s. 517.061, s. 517.0611, or s. 517.0612, to misrepresent that such security or business entity has been guaranteed, sponsored, recommended, or approved by the state or an agency or officer of the state or by the United States or an agency or officer of the United States.
(4) It is unlawful for a person registered or required to be registered, or subject to the notice requirements, under this chapter, including such persons and issuers who are subject to s. 517.051, s. 517.061, s. 517.0611, s. 517.0612, or s. 517.081, to misrepresent that such person has been sponsored, recommended, or approved, or that such person’s abilities or qualifications have in any respect been approved, by the state or an agency or officer of the state or by the United States or an agency or officer of the United States.
(5) It is unlawful and a violation of this chapter for a person in connection with the offer or sale of an investment to obtain money or property by means of:
(a) A misrepresentation that the investment offered or sold is guaranteed, sponsored, recommended, or approved by the state or an agency or officer of the state or by the United States or an agency or officer of the United States; or
(b) A misrepresentation that such person is sponsored, recommended, or approved, or that such person’s abilities or qualifications have in any respect been approved, by the state or an agency or officer of the state or by the United States or an agency or officer of the United States.
(6)(a) Subsection (3) or subsection (4) may not be construed to prohibit a statement that a person or security is registered or has made a notice filing under this chapter if such statement is required by this chapter or rules promulgated thereunder and is true in fact and if the effect of such statement is not a misrepresentation.
(b) A statement that a person is registered made in connection with the offer or sale of a security under this chapter must include the following disclaimer: “Registration does not imply that such person has been sponsored, recommended, or approved by the state or an agency or officer of the state or by the United States or an agency or officer of the United States.”
1. If the statement of registration is made in writing, the disclaimer must immediately follow such statement and must be in the same size and style of print as the statement of registration.
2. If the statement of registration is made orally, the disclaimer must be made or broadcast with the same force and effect as the statement of registration.
(7) It is unlawful and a violation of this chapter for a person to directly or indirectly manage, supervise, control, or own, either alone or in association with others, a boiler room in this state which sells or offers for sale a security or investment in violation of subsection (1), subsection (3), subsection (4), subsection (5), or subsection (6).
517.302 Criminal penalties; alternative fine; Anti-Fraud Trust Fund; time limitation for criminal prosecution.—
(1) Whoever violates any of the provisions of this chapter is guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(2) Any person who violates s. 517.301 by obtaining money or property of an aggregate value exceeding $50,000 from five or more persons is guilty of a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(3) In lieu of a fine otherwise authorized by law, a person who has been convicted of or who has pleaded guilty or no contest to having engaged in conduct in violation of this chapter may be sentenced to pay a fine that does not exceed the greater of three times the gross value gained or three times the gross loss caused by such conduct, plus court costs and the costs of investigation and prosecution reasonably incurred.
(4) There is created within the office a trust fund to be known as the Anti-Fraud Trust Fund. Any amounts assessed as costs of investigation and prosecution under this subsection shall be deposited in the trust fund. Funds deposited in the trust fund must be used, when authorized by appropriation, for investigation and prosecution of administrative, civil, and criminal actions arising under this chapter. Funds may also be used to improve the public’s awareness and understanding of prudent investing.
(5) Criminal prosecution for offenses under this chapter is subject to the time limitations in s. 775.15.
517.313 Destroying certain records; reproduction.—
(1) The commission and office may photograph, microphotograph, or reproduce on film or prints documents, records, data, and information of a permanent character.
(2) The commission and office may destroy any of said documents after audit has been completed for the period embracing the dates of said instruments, after complying with the provisions of chapter 119.
(3) Duly certified or authenticated photographs or microphotographs in the form of film or prints of any records made in compliance with the provisions of this section shall have the same force and effect as the originals thereof would have and shall be treated as originals for the purpose of their admissibility as evidence.
517.315 Fees.—All fees of any nature collected by the office pursuant to this chapter shall be disbursed as follows:
(1) The office shall transfer the amount of fees required to be deposited into the Securities Guaranty Fund pursuant to s. 517.131.
(2) After the transfer required in subsection (1), the office shall transfer the $50 assessment fee collected from each associated person under s. 517.12(9) and (10) and 30.44 percent of the $100 assessment fee paid by dealers and investment advisers for each office in the state under s. 517.12(9) and (10) to the Regulatory Trust Fund.
(3) All remaining fees shall be deposited into the General Revenue Fund.
517.32 Exemption from excise tax, certain obligations to pay.—There shall be exempt from all excise taxes imposed by chapter 201 all promissory notes, nonnegotiable notes, and other written obligations to pay money bearing dates subsequent to July 1, 1957, when the maker thereof is a security dealer registered by the office under this chapter and when such promissory note, nonnegotiable note or notes, or other written obligation to pay money shall be for the duration of 30 days or less and secured by pledge or deposit, as collateral security for the payment thereof, security or securities as defined in s. 517.021, provided all excise taxes imposed by chapter 201 shall have been paid upon such collateral security.
(a) “Financial exploitation” means the wrongful or unauthorized taking, withholding, appropriation, or use of money, assets, or property of a specified adult; or any act or omission by a person, including through the use of a power of attorney, guardianship, or conservatorship of a specified adult, to:
1. Obtain control over the specified adult’s money, assets, or property through deception, intimidation, or undue influence to deprive him or her of the ownership, use, benefit, or possession of the money, assets, or property; or
2. Convert the specified adult’s money, assets, or property to deprive him or her of the ownership, use, benefit, or possession of the money, assets, or property.
(b) “Specified adult” means a natural person 65 years of age or older, or a vulnerable adult as defined in s. 415.102.
(c) “Trusted contact” means a natural person 18 years of age or older who the account owner has expressly identified and who is recorded in a dealer’s or investment adviser’s books and records as the person who may be contacted about the account.
(2) The Legislature finds that many persons in this state, because of age or disability, are at increased risk of financial exploitation and loss of their assets, funds, investments, and investment accounts. The Legislature further finds that senior investors in this state are at a statistically higher risk of being targeted for financial exploitation, regardless of diminished capacity or other disability, because of their accumulation of substantial assets and wealth compared to younger age groups. In enacting this section, the Legislature recognizes the freedom of specified adults to manage their assets, make investment choices, and spend their funds, and intends that such rights may not be infringed absent a reasonable belief of financial exploitation as provided in this section. The Legislature therefore intends to provide for the prevention of financial exploitation of such persons. The Legislature intends to encourage the constructive involvement of securities dealers, investment advisers, and associated persons who take action based upon the reasonable belief that specified adults with investment accounts have been or are the subject of financial exploitation, and to provide securities dealers, investment advisers, and associated persons immunity from liability for taking actions as authorized herein. The Legislature intends to balance the rights of specified adults to direct and control their assets, funds, and investments and exercise their constitutional rights consistent with due process with the need to provide securities dealers, investment advisers, and associated persons the ability to place narrow, time-limited restrictions on these rights in an effort to decrease specified adults’ risk of loss due to abuse, neglect, or financial exploitation.
(3) A dealer or investment adviser may delay a disbursement or transaction of funds or securities from an account of a specified adult or an account for which a specified adult is a beneficiary or beneficial owner if all of the following apply:
(a) The dealer or investment adviser reasonably believes that financial exploitation of the specified adult has occurred, is occurring, has been attempted, or will be attempted in connection with the disbursement or transaction.
(b) Not later than 3 business days after the date on which the delay was first placed, the dealer or investment adviser notifies in writing all parties authorized to transact business on the account and any trusted contact on the account, using the contact information provided for the account, with the exception of any party the dealer or investment adviser reasonably believes has engaged in, is engaging in, has attempted to engage in, or will attempt to engage in the suspected financial exploitation of the specified adult. The notice, which may be provided electronically, must provide the reason for the delay.
(c) Not later than 3 business days after the date on which the delay was first placed, the dealer or investment adviser notifies the office of the delay electronically on a form prescribed by commission rule. The form must be consistent with the purposes of this section and may include only the following information:
1. The date on which the notice is submitted to the office.
2. The date on which the delay was first placed.
3. The following information about the specified adult:
a. Gender.
b. Age.
c. Zip code of residence address.
4. The following information about the dealer or investment adviser who placed the delay:
a. Name.
b. Title.
c. Firm name.
d. Business address.
5. A section with the following questions for which the only allowable responses are “Yes” or “No”:
a. Is financial exploitation of a specified adult suspected in connection with a disbursement or transaction?
b. Are funds currently at risk of being lost?
The form must contain substantially the following statement in conspicuous type: “The office may take disciplinary action against any person making a knowing and willful misrepresentation on this form.”
(d) The dealer or investment adviser immediately initiates an internal review of the facts and circumstances that caused the dealer or investment adviser to reasonably believe that the financial exploitation of the specified adult has occurred, is occurring, has been attempted, or will be attempted.
(4) A delay on a disbursement or transaction under subsection (3) expires 15 business days after the date on which the delay was first placed. However, the dealer or investment adviser may extend the delay for up to 10 additional business days if the dealer’s or investment adviser’s review of the available facts and circumstances continues to support such dealer’s or investment adviser’s reasonable belief that financial exploitation of the specified adult has occurred, is occurring, has been attempted, or will be attempted. A dealer or investment adviser that extends a delay must notify the office on a form prescribed by commission rule not later than 3 business days after the date on which the extension was applied. The notice must identify the dealer or investment adviser that extended the delay and the date on which the delay was originally made. The length of the delay may be shortened or extended at any time by a court of competent jurisdiction. This subsection does not prevent a dealer or investment adviser from terminating a delay after communication with the parties authorized to transact business on the account and any trusted contact on the account.
(5) A dealer or investment adviser must make available to the office, upon request, all records relating to a delay placed by the dealer or investment adviser pursuant to this section, as prescribed by commission rule.
(6) A dealer, an investment adviser, or an associated person who in good faith and exercising reasonable care complies with this section is immune from any administrative or civil liability that might otherwise arise from such delay in a disbursement or transaction in accordance with this section. This subsection does not supersede or diminish any immunity granted under chapter 415.
(7) Before placing a delay on a disbursement or transaction pursuant to this section, a dealer or an investment adviser must do all of the following:
(a) Develop training policies or programs reasonably designed to educate associated persons on issues pertaining to financial exploitation.
(b) Conduct training for all associated persons at least annually and maintain a written record of all training conducted.
(c) Develop, maintain, and enforce written procedures regarding the manner in which suspected financial exploitation is reviewed internally, including, if applicable, the manner in which suspected financial exploitation is required to be reported to supervisory personnel.
(8) Absent a reasonable belief of financial exploitation as provided in this section, this section does not alter a dealer’s, an investment adviser’s, or an associated person’s obligation to comply with instructions from a client to buy or sell securities, disburse funds or transfer securities from an account, close an account, or transfer an account to another dealer, investment adviser, or associated person.
(9) This section does not create new rights for or impose new obligations on a dealer, an investment adviser, or an associated person under other applicable law. This section does not limit the right of a dealer, an investment adviser, or an associated person to otherwise refuse or place a delay on a disbursement or transaction under other applicable law or under an applicable customer agreement.
