REVISED SECURITIES ACT REVIEWER

1. What are securities? Gen. Meaning

a. They are evidences of obligation to pay money, or of the right to participate in the earnings or
distribution of property .the test is whether income or profit is expected to be derived therefrom by the
investor.

2. Enumerate the classes of securities.

a. Non-exempt securities- those which shall not be sold or offered for sale or distributed to the public
unless they have been registered and permitted to be sold in accordance with the act.
b. Exempt securities- those which are exempt from the provisions of the act and therefore, need not be
registered in order to be sold or offered for sale to the public.
c. Exempted securities- or those which may , from time to time, be declared exempt by the SEC upon
proper application if it finds that the enforcement of the Act with respect to such securities are
speculative because every investment of money involves risks, and where there is taking of risk ,
speculation exist.

3. Enumerate the Securities Industry/6 kinds of market.

a. The capital market- securities traded in them have a maturity in excess of one year.
b. The money market-the market for short term funds having maturity of under one year.
c. The bond market- long-term bonds, generally with an original maturity of over five
(5) years. Issued by private and govt.
d. The stock market- existing and outstanding securities are traded, as well as new issues of stock.
e. The primary market- a new security is sold by a corporation or govt. body, usually through an
underwriter, for the purpose of raising capital, the key figure is the underwriter.
f. The secondary market- dealings in this market involve trading between investors in securities already
outstanding, rather than a sale of a security issued for the first time.

4. What is the Requirement of registration of securities? Sec. 4

a. Such Securities shall have been registered and permitted to be sold as hereinafter provided.
b. Registered in accordance with the rules and regulations that shall be promulgated in the public interest
and for the protection of investors by the Commission. The Monetary Board shall, however, have the
power to promulgate its own rules on the monetary and credit aspects of commercial paper issues,
which may include the imposition of ceilings on issues by any single borrower, and the authority to
supervise the enforcement of such rules and to require issues of commercial papers to submit their
financial statements and such periodic reports as may be necessary for such enforcement. As far as
practicable, such financial statements and periodic reports, when required by both the Commission and
the Monetary Board, shall be uniform.
c. A record of the registration of securities shall be kept in a Register of Securities in which shall be
recorded orders entered by the Commission with respect to such securities.

5. Distinguish Public offering from Private Offering

Public offering implies a sale of securities to the general public, usually through the medium of an investment
banker.

A private offering is defined as the sale of an issue of securities by the issuer, rather than through an investment
banker.
 The distinction between private and public offerings is that the former ordinarily involves but few subscribers
who are in position to be well acquainted with the affairs of the business.

6. Enumerate the Exempt Securities? Sec. 5

a. Any security issued or guaranteed by the Government of the Philippines, or by any political subdivision
or agency thereof or by any of its public instrumentalities
b. Any security issued or guaranteed by the government of any country with which the Philippines is, at the
time of the sale or offer of sale thereof, maintaining diplomatic relations, or by any state
c. Any security issued or guaranteed by any banking institution authorized to do business in the
Philippines,
d. Any security issued by a building and loan association, non-stock savings and loan association, or similar
institution
e. Certificates issued by a receiver or by a trustee in bankruptcy duly approved by the court
f. Any insurance or endowment policy or annuity contract, or optional annuity contract, issued by a
corporation subject to the supervision of the Insurance Commission
g. Any security covering any right or interest in real property, including a subdivision lot or a condominium
unit,
h. Pension plans subject to regulation and supervision by the Bureau of Internal Revenue and/or the
Insurance Commission.
i. any class of securities that the commission may determine

7. What are the transactions that are exempt from registration? Sec. 6

SEC. 6. EXEMPT TRANSACTIONS. (a) the requirement of registration shall not apply to the sale of any security in
any of the following transactions:

1. SALE IN INSOLVENCY OR BANKCRUPTCY

2. SALE OF PLEDGE, MORTGAGE OR LIEN TO LIQUIDATE DEBT
3. AN ISOLATED TRANSACTION NOT MADE IN THE COURSE OF REPEATED AND SUCCESSIVE
TRANSACTIONS OF LIKE CHARACTER
4. DISTRIBUTION OF SECURITIES OR ADDITIONAL CAPITAL STOCK
5. THE TRANSFER OR EXCHANGE BY ONE CORPORATION TO ANOTHER
6. ISSUANCE OF BONDS AND NOTES TO A SINGLE PURCHASER AT A SINGLE SALE
7. ISSUANCE AND DELIVERY OF SECURITY IN EXCHANGE FOR ANOTHER SECURITY PURSUANT TO A RIGHT
OF CONVERSION
8. BROKER’S TRANSACTIONS UPON CUSTOMER’S ORDER
9. SUBSCRIPTION OF SHARES OF THE CAPITAL STOCK TO COMPLY WITH REQUIREMENTS
10. EXCHANGE OF SECURITIES FREE OF CHARGE
11. ISSUANCE OF SECURITY TO BROADEN EQUITY
12. UPON COMMISSION’S DESCRETION: if requirements are not necessary:
13. FEE: 1/10 of 1% of maximum price of securities

8. What constitutes registration?

The following shall constitute the registration of securities under section 8:

1. FILING WITH THE SEC A SWORN STATEMENT BY ANYONE INTERESTED: Filing in the SEC by the issuer or
by any dealer or underwriter interested in the sale of the securities a sworn statement with respect to
such securities containing or having attached thereto, the information required (sec. 8, subpar 1-38).
2. PAYMENT OF PRESCRIBED FEE.
 3. PUBLICATION of the fact of such filing in two newspapers of general circulation in the Philippines, once
a week for 2 consecutive weeks.

9. Requisites for the sale of securities?

In order that securities may be sold in the Philippines, the following must be complied with:

1. REGISTRATION: The securities have been registered.

2. ORDER OF COMMISSION: The Commission has entered an order making the registration effective and
issued to the registrant a permit to sell.
3. PUBLICATION: The order of the Commission making the registration effective has been published once
in a newspaper of general publication within 10 days from its publication.

10. Who may oppose registration of securities?

1. ANY INTERESTED PARTY may file an opposition to the registration within 10 days from publication.

2. A “PROSPECTIVE INVESTOR” may oppose the registration of the shares of stock of a corporation.

11. Grounds for the rejection of registration? Sec. 9

The Commission may reject a registration statement and refuse to issue a permit to sell the securities
included in such registration statement if it finds that:

1. REGISTRATION INCOMPLETE: The registration statement is on its face incomplete or inaccurate in and
material respect or includes any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not misleading; or
2. The ISSUER OR REGISTRANT –
a. IS INSOLVENT: Is not solvent or not in sound financial conditions;
b. HAS VIOLATED: Has violated or has not complied with the provisions of this Act or the rules
promulgated pursuant thereto or any order of the Commission;
c. HAS FAILED TO COMPLY: Has failed to comply with any of the applicable requirements and
conditions that the Commissions may, in the public interest and for the protection of investors
impose before the security can be registered;
d. IS FRAUDULENT: Has been engaged or is engaged or is about to engage in fraudulent
transactions;
e. IS DISHONEST: Is in any other way dishonest or is not of good repute; or
f. HAS ILLEGAL CONDUCT OF BUSINESS: Does not conduct its business in accordance with law or is
engaged in a business that is illegal or contrary to government rules and regulations.
3. UNSOUND BUSINESS PRINCPIPLES: The enterprise or the business of the issuer is not shown to be
sound or to be based on sound business principles;
4. DISQUIALIFICATION: An officer, member of the board of directors or principal stockholder of the issuer
as disqualified to be such officer, director or principal stockholder; or
5. PREJUDICIAL TO PUBLIC INTEREST: The issuer or registrant has not shown to the satisfaction of the
Commission that the sale of its security would not work to the prejudice of the public interest or as a
fraud upon the purchasers or investors.

12. Civil liabilities on account of false registration statement? (classmates I highlighted the points nga I think are
important, most of the letters in bold kay ako na summary and not really part of the book, pero I still included
the codal provision for your reference in case dili mo ganahan sa ako summary).
A. Any person acquiring a security, the registration statement of which or any part thereof contains on
its effectivity an untrue statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make such statements not misleading, and who suffers damage,
unless it is proved that at the time of such acquisition he knew of such untrue statement or
omission, may sue in a court of competent jurisdiction:

1. Every person who signed the registration statement;

2. Every person who was a director of, or any other person performing similar
functions, or a partner, in the issuer at the time of the filing the registration
statement or any part, supplement or amendment thereof with respect to which his
liability is asserted;
3. Every person who is named in the registration statement as being or about to
become a director of, or a person performing similar functions, or a partner in, the
issuer and whose written consent thereto is filed with the registration statement;
4. WHO PREPARED/CERTIFIED THE STATEMENT: Every person whose profession gives
authority to a statement made by him, who, with his written consent, which shall be
filed with the registration statement, has been named as having prepared or
certified any part of the registration statement, or as having prepared or certified
any report or valuation which is used in connection with the registration statement,
report or valuation, which purports to have been prepared or certified by him.
5. Every underwriter with respect to such security.

B. Notwithstanding the provisions of subsection (a) no person, other than the issuer, shall be liable as
provided therein if he proves –
1. That BEFORE THE EFFECTIVE DATE of the part of the registration statement with
respect to which his liability is asserted:
a. He has resigned from, or had taken such steps as are permitted by law to
resign from or ceased or refused to act in, every office, capacity, or
relationship in which he was described in the registration statement as
acting or agreeing to act, and
b. He had advised the Commission and the issuer in writing that he had taken
such action and that he would not be responsible for such part of the
registration statement; or
2. That:
a. HE BELIEVED THAT REPORT OF AN EXPERT OR PUBLIC OFFICIAL WAS TRUE:
As regards any part of the registration statement not purporting to be a
copy of or extract from a report or valuation of an expert, and not
purporting to be made in the authority of a public official document or
statement, he has, after reasonable investigation, reasonable ground to
believe and did believe, at the time such part of the registration statement
became effective, that the statements therein were true and that there was
no omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
b. As regards any party of the registration statement purporting to be made
upon his authority as an expert purporting to be copy of or extract from a
report or valuation of himself as an expert,
i. IF HE WAS THE EXPERT, HE BELIEVED THE STATEMENT WAS TRUE:
He had, after reasonable investigation, reasonable ground to
believe and did believe at the time such part of the registration
statement became effective, that the statements therein were true
and that there was no omission to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading or;
 ii. IF HE WAS THE EXPERT, THE STATEMENT DID NOT CONTAIN FAIR
COPY OF HIS REPORT: Such part of the registration statement did
not fairly represent his statement as an expert or was not a fair copy
of or extract from his report or valuation as an expert; and
c. IF HE WAS NOT THE EXPERT, HE BELIEVED THE OTHER EXPERT’S REPORT
WAS TRUE: As regards any part of the registration statement purporting to
be made on the authority of an expert (other than himself) or purporting to
be a copy of or extract from a report or valuation of an expert (other than
himself), he had no reasonable ground to believe and did not believe at the
time such part of the registration statement became effective, that the
statements therein were untrue or that there was an omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that such part of the registration
statement did not fairly represent the statement of the expert or was not a
fair copy of or extract from the report or valuation of the expert; and
d. IF THE STATEMENT WAS MADE BY A PUBLIC OFFICIAL, HE BELIEVED IT
WAS TRUE: As regards any part of the registration statement purporting to
be a statement made by a public official purporting to be a copy of or
extract from a public official document he had no reasonable ground to
believe and did not believe at the time such part of the registration
statement became effective, that the statements therein were untrue, or
that there was an omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that
such part of the registration statement did not fairly represent the
statement made by the public official or was not a fair copy of or extract
from the public official document.
C. In determining for the purpose of par. 2 of subsection b, what constitutes reasonable investigation
and reasonable ground for belief the STANDARD OF REASONABLENESS shall be that required of a
prudent man in the management of his own property.
D. DAMAGES: (amount promised – amount actually paid = difference x 2) The suit authorized under
subsection a may be filed to recover such damages as shall represent double the difference between
the amount paid and committed to be paid for the security, not exceeding the price at which the
security was offered to the public, and
i. The value thereof as of the time such suit was brought, or in case the security has
been disposed of
ii. The price at which such security shall have been disposed of in the market before
the suit or
iii. The price at which such security shall have been disposed of after the times of the s
uit but before judgment.

No underwriter shall be liable in any suit or as a consequence of suits for damages in excess of the
total price at which the securities underwritten by him and distributed to the public were offered to
the public.

In any suit under this or any other section, the court may, in its discretion, require an undertaking
for the payment of the costs of such suit, including reasonable atty’s fees. Costs may be allowed by
the Court to the prevailing party litigany.

Exemplary damages may also be awarded in cases of bad faith, fraud, malevolence or
wantonness.

E. The persons specified in subsection a shall be jointly and severally liable for the payment of
damages. However, any person who becomes liable for the payment of such damages may recover
 contribution from any other person who, if sued separately, would have been liable to make the
same payment, unless the former was guilty of fraudulent representation and the latter was not.
F. In no case shall the amount recoverable exceed double the price at which the security was offered
to the public and such exemplary damages as may be awarded by the court.
G. All person, including the issuer, held liable shall contribute equally to the total liability adjudged
herein. In no case shall the principal stockholders, directors and other officers of the issuer of
persons occupying similar positions therein, recover their contribution to the liability from the
issuer. However, the right of the issuer to recover from the guilty parties the amount it has
contributed shall not be prejudiced. (whew! Salamat nahuman ra jud!)

13. What is a stop order?

A stop order is an order issued by the SEC before or after the taking effect of the registration of security
suspending the effectiveness of a registration statement or the sale of the security, if at any time, it shall
appear the information contained in the statement filed is or has become misleading, incorrect, inadequate or
incomplete, or the sale or offering for sale of the security may work or tend to work a fraud.

14. Grounds for the revocation of securities?

SEC may, after due notice and hearing, revoke the registration and permit to sell such security , if upon
examination it shall appear that the issuer:

a) is insolvent;
b) has violated any of the provisions of the Act;
c) has been or is engaged or is about to engage in fraudulent transactions;
d) dishonest or has made any fraudulent representation in any prospectus or other literature concerning
issuer and its securities;
e) does not conduct its business in accordance with law;

15. Distinctions bet. Broker and dealer?

The broker serves as the customer’s agent in buying, or selling securities for his customer. As such, he owes
the customer the highest fiduciary responsibility and care and may charge only commission agreed upon.

The dealer acts as principal and buys securities from or sells securities to his customers. In such
transaction, the dealer’s profit is measured by the difference between the parties at which he buys and sells.
He normally may not charge the customer a fee or commission for services rendered.

16. What are the different kinds of deliveries?

a) cash for delivery upon the date of contract;

b) regular way for delivery upon the business day following a contract;
c) at six days for delivery upon the 6th day following the contract;and
d) delayed delivery for delivery within the period expressly agreed upon its contract.

17. May a Broker act as an agent for both buyer and seller? What are the requirements?

Generally No. Except if:

a) he procures the written and telegraphic consent of both such buyer and seller at or before the
completion of the transaction;
 b) he makes a written disclosure to both such buyer and seller before the completion of the transaction
that he is so acting

18. What are the requirements for Listing?

(under trading securities)

a) should be duly registered with SEC or in case of speculative security, duly licensed by the SEC;
b) the security of an enterprise engaged in the business of promoting, exploring, developing or operating
mineral properties unless adequate development work thereon has been done for at least 6 months.
c) Application for registration must be made in 2 duplicate originals and shall be filed with the SEC;
d) Accompanied by a sworn statement with following data:
1) Corporate name of issuer and authority under which it existed with a certified true copy of its
articles of incorporation and by-laws;
2) Amount of its capital stock and number of shareholders;
3) Number and description of shares and the par value thereof;
4) Whether the same is fully paid and non assessable
5) List of officers and BOD
6) Location of its officers;
7) Its transfer office and registration office;
8) Certified copy of its assets and liabilities;
9) If a mining corp, the status and progress made on the exploration and its last financial report.

19. What are the requirements for withdrawal from listing?

a. Consent of the Commissioner

b. If it is made by the Issuer- it shall be made to the Commission in triplicate and shall be furnished the exchange,
setting for the reasons application.

If made by the Exchange- it shall be made to the Commission in triplicate and shall be furnished the issuer,
setting for the reasons application.

c. If made at the instance of the Issuer- it shall state that the proposed withdrawal has been approved by the
security holder at a meeting at which 2/3 of the outstanding amount of the particular security is represented,
and copies of the resolution therefor in triplicate shall be attached thereto.

20. What are the Requisites for Registration of an exchange?

They are the following:

a. Filing of a registration statement as prescribed by the SEC and accompanied by the

specified documents.

b. Entry by the Commission of an order within 90 days after the filing of the application granting registration as a
securities exchange; and

c. Payment within 12 months such reasonable fee as the Commission may fix.
21. Define Margin transactions.

In a narrow sense, it is the purchase of a security with only part of the necessary funds supplied by the
purchaser, the rest being made available through the brokerage firm.

In a broader sense, it includes all use of credit for the purpose of financing ownership of marketable securities.

22. What is the Margin requirement?

The amount of credit that may be extended on any security, other than an exempted security shall be based
upon the following standard:

An amount not greater that whichever is the higher of –

a. 65% of the current market price of the security or

b. 100% of the lowest market price of the security during the preceding 36 calendar months but nor more than
75% of the current market price.
But the Monetary Board by an affirmative vote of 5 of its members may increase or decrease the above
percentage.

23. What is maintenance margin?

It is the required amount of securities an investor must hold in his account if he either purchases shares on
margin, or if he sells shares short. If an investor's margin balance falls below the set maintenance margin, the
investor would then need to contribute additional funds to the account or liquidate stocks in the account to
bring the account back to the initial margin requirement.

24. What is the maximum credit trading on margin?

In trading on margin, a broker shall not extend credit to his customers beyond the following maximum:

a. On securities duly registered and/ or licensed by the Insular Treasurer or by the Commission, but not listed
on any Exchange – 30% of the current market value of the securities

b. On securities duly registered and/ or licensed by the Insular Treasurer or by the Commission, and listed on
an Exchange, an amount whichever is higher of :
a. 40% of the current market price of the securities; or
b. 100% of the lowest market price of the securities during the preceding 36 months but not more
than 50% of the current market price.

25. Enumerate the prohibited practices designed to manipulate security prices. Explain each.

(1) Wash sales – these are covered by subsection (1), (i) of sec. 26. For instance, X, in connivance with Y agrees
to make a fictitious sale of some of the former stock to the latter. In this case, X will give his broker an order
to sell and Y will give the same or another broker an order to buy;
(2) Matched orders – these are covered by subsection (a), (1) (ii) and (iii) of sec. 26. Suppose, that the current
market price of X’s stock is P2.00 per share. In connivance with Y, X will enter an order to sell 1,000 shares of
stock P2.20 per share on a certain day at, let us say, 10:00 a.m. and on the same day and at about the same
time, Y will enter his own order to buy 1,000 shares at P2.20 per share. Thus, it would appear that the price
of P2.20 is the actual sale price of the stock. Since X gains P0.20 and Y loses to same amount from the
transaction, X will arrange to equalize the deal with Y at the close of trading.
 (3) Market “rigging” or “jiggling” – this is covered to subsection (a), (2) of sec. 26. The acts prohibited effecting
a series of transaction which have either of the following results: (a) raising or depressing the price of the
security or (b) creating actual or apparent activity trading. Any such series of transactions are illegal if made
for the purpose of inducing the purchase or sale of the security to others;
(4) Dissemination of information regarding market activity – this is covered by subsection (a), (3) of sec. 26.
Note that the dissemination of information, whether true or not, is prohibited only if made in the ordinary
course of business. Hence, offhand statements made in a social gathering, or in a club or at home or in
school are not prohibited;
(5) Making false or misleading statements – this is covered by subsection (a), (4) of sec. 26;
(6) Receiving or paying a consideration for the dissemination of information as to market activity – this is
covered by subsection (a), (5) of sec. 26.
(7) Pegging the prices – this is covered by subsection (a) (6) of sec. 26. This practice is unlawful only if done in
contravention of such rules and regulations as the Commission may prescribe; and
(8) Puts, calls straddles, and other options or privileges – these are covered by subsections (b), (c), and (d) of
sec. 26.

26. What is “Put”?

A transferable option or offer to deliver a given number of shares of stock at a stated price at any time during a
stated period. Such an option is purchased by a speculator who looks forward to a price decline during the
period to a point below that appearing in the option.

27. What is “Call”?

A transferable option to buy a specified number of shares of stock at a stated price at any time during a stated
period. Such an option is purchased by a speculator anticipating a price rise above the delivery price.

28. What are the manipulative and deceptive devices?

Sec. 27. Manipulative and deceptive devices. — It shall be unlawful for any person, directly or indirectly, by the
use of any facility of any exchange:
(a) To effect a short sale, or to use or employ any stop-loss order in connection with the purchase or sale of any
security registered on a securities exchange, in contravention of such rules and regulations as the Commission
may prescribed as necessary or appropriate in the public interest or for the protection of investors.
(b) To use or employ, in connection with the purchase or sale of any security, any manipulative or deceptive
device or contrivance.

29. What is short sale?

It is the sale of a security for future delivery and prior to its purchase, with the expectancy that the market price
will be no higher or will decline by the time a covering purchase must be made.

30. What are round-lot transactions? Market order and Limit orders

Stocks may be bought and sold on the floor of the Exchange in a standard unit of trading, called a round-lot, or
in multiple round-lots. Thus, for most listed stocks, the unit of trading may be 100 shares, while for a relatively
small group of inactive stocks; the unit of trading may be 10 shares.
Market order – this is an order to buy or sell a stated amount of a security at the most advantageous price
obtainable after the order is represented in the trading crowd on the floor of the exchange.
Limit orders – they are placed by those who hope to buy or sell a security at a specified price or at a better price,
if obtainable after the order is represented in the trading crowd.
31. Call

a. A Call gives its owner the option to buy a stock in a specific price known as the strike price over a given
period of time

32. Short sale

b. Short selling is the selling of a stock that the seller doesn't own. More specifically, a short sale is the sale
of a security that isn't owned by the seller, but that is promised to be delivered.

33. Price Control

c. The RSA provides that: “it shall be unlawful for any exchange to adopt and enforce any artificial
measures of price control of any nature whatsoever without the prior approval of the Commission which
may be given only if it serves public interest and benefits the investors.

34. What are fraudulent transactions? How is it committed?

d. It shall be unlawful for any person directly or indirectly, in connection with the purchase or sale of any securities:

(1)To employ any device, scheme, or artifice to defraud, or

(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 act, transaction, practice, or course of business which operates or would operate as a fraud
or deceit upon any person.

(4) It shall be unlawful for any person to describe a security to a second person, without purporting to offer it,
for a consideration received or to be received directly or indirectly from the issuer, any other person interested
in buying or selling the security, an underwriter, broker, dealer, or investment adviser, or a controlling,
controlled, or commonly controlled person of any such person, unless (1) he concurrently discloses the source of
the consideration or the nature of or reason for his employment or (2) if the second person or his agent in the
transaction is identified, that information is known to the second person

35. Affiliate
a. I Can’t find the relevance since it is used as a generic term
36. Records
a. Used as a generic term also.

37. Requirements for a broker to be an agent to both buyer and seller.

No broker shall act as agent of both buyer and seller in any security transactions on an over the counter market
unless:
1. He procures the written or telegraphic consent of both such buyer and seller at or before the completion of
the transaction;
2. He makes written disclosures to both or such buyer and seller before the completion of the transaction that
he is so acting. (SEC Rule B-21)
38. What are the reports to be filed by Directors, officers and principal stockholders?
1. Amount of all securities and changes in ownership.
2. Designation of Exchange.
3. Determination of beneficial ownership.

39. What are the liabilities of the controlling person?

Section 44 of the Revised Securities Act provides that any person who “controls” another, is equally responsible
with the “controlled person” for any act which subjects the latter to civil liability.
The controlling person is not liable, however, if he acted in good faith and did not directly or indirectly induce
the act which caused the liability.

40. Who has the power to investigate and prosecute offenses?

The commission may, in its discretion, make such investigations as it deems necessary to determine whether
any person has violated or is about to violate any provision of this act or any rule or regulation there under, and
may require or permit any person to file with it a statement in writing, under oath or otherwise, as the
commission shall determine, as to all facts and circumstances concerning the matter to be investigated. (Section
45A of RSA)

41. Enumerate the courses of action or remedies that the SEC may pursue.
1. Civil injunction- The Commission is empowered to issue preliminary injunctions, whether prohibitory or
mandatory, in all cases in which it has jurisdiction, and in which cases the pertinent provisions of the rules of
court shall apply.
2. Criminal Prosecution- If fraud or other willful law violation is indicated, the Commission may refer the
matter to the national prosecution service of the DOJ for investigation and prosecution of the offending
person before the proper court.
3. Administrative Remedy- It may, after proper notice and hearing, impose any or all administrative sanctions
mentioned in section 46 without prejudice to the filing of criminal charges against the individuals
responsible for the violations.

42. What are the grounds that the SEC may issue a cease and desist order.
The Commission after proper investigation or verification, motu proprio, or upon verified complaint by any
aggrieved party, may issue a cease and desist order without the necessity of prior hearing if in its judgement the
act or practice, unless restrained may cause grave or irreparable injury or prejudice to the investing public or
may amount to fraud or violation of the disclosure requirements of this act and the rules and regulation of the
Commission. (Sec.47 of RSA)