P.R. Laws tit. 10, § 876
(a) The Commissioner may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any registration statement if he/she finds:
(1) That the order protects the public interest, and
(2)
(A) That the registration statement as of its effective date or as of any earlier date in the case of an order denying effectiveness, or any amendment under § 875(k) of this title as of its effective date, or any report under § 875(j) of this title is incomplete in any material respect or contains any statement which was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact;
(B) any provision of this chapter or any rule, order, or condition lawful[ly] imposed under this chapter has been willfully violated, in connection with the offering: by
(i) the person filing the registration statement,
(ii) the issuer, any partner, officer, or director of the issuer, any person occupying a similar status or performing similar functions or any person directly or indirectly controlling or controlled by the issuer, but only if the person filing the registration statement is directly or indirectly controlled by or acting for the issuer, or
(iii) any underwriter;
(C) the securities registered or sought to be registered are the subject of an administrative stop order or similar order or a permanent or temporary injunction of any court of competent jurisdiction issued under any other federal or state act applicable to the offering; but
(i) the Commissioner may not institute a proceeding against an effective registration statement under this paragraph more than one (1) year from the date of the order or injunction relied on, and
(ii) he/she may not issue an order under this paragraph on the basis of an order or injunction issued under any other state act unless that order or injunction was based on facts which would currently constitute grounds for a stop order under this section;
(D) the issuer’s enterprise or method of business includes or would include activities which are illegal where performed;
(E) the offering has worked or tended to work a fraud upon purchasers or would so operate;
(F) the offering has been or would be made with unreasonable amounts of underwriters’ and sellers’ discounts, commissions, or other compensation, or promoters’ profits or participation, or unreasonable amounts or kinds of options;
(G) when a security is sought to be registered by notification, it is not eligible for such registration;
(H) when a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by § 873(b)(4) of this title, or
(I) the applicant or registrant has failed to pay the proper filing fee; but the Commissioner may issue only a denial order under this clause and he/she shall render any such order ineffective when the deficiency has been corrected.
The Commissioner may not institute a stop order proceeding against an effective registration statement on the basis of a fact or transaction known to him/her when the registration statement became effective unless the proceeding is instituted within the next ninety (90) days.
(b) The Commissioner may, through an order, summarily defer or suspend the effectiveness of the registration statement pending final determination of any proceeding under this section. Upon issuing the order, the Commissioner shall promptly notify each person specified in subsection (c) of this section that it has been issued and of the reasons therefor and that within fifteen days after the receipt of a written request, the matter will be set down for a hearing. If no hearing is requested and none is ordered by the Commissioner, the order will remain in effect until it is modified or rendered ineffective by the Commissioner. If a hearing is requested or ordered, the Commissioner, after notice of and opportunity for hearing to each person specified in subsection (c) of this section, may modify or render the order ineffective, or extend it until its final determination.
(c) No stop order may be entered under any part of this section except the first sentence of subsection (b) without:
(1) Appropriate prior notice to the applicant or registrant, the issuer, and the person on whose behalf the securities are to be or have been offered,
(2) opportunity for hearing, and
(3) written findings of fact and conclusions of law.
(d) The Commissioner may render ineffective or modify a stop order if he/she finds that the conditions which prompted its issuance have changed or that it is otherwise in the public interest to do so.
History —June 18, 1963, No. 60, p. 128, § 306; Aug. 11, 1996, No. 114, § 13.