Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 7 - STATE SECURITIES BOARD › Chapter 139 - EXEMPTIONS BY RULE OR ORDER › Section 139.19 - Accredited Investor Exemption

Current through Reg. 49, No. 28; July 12, 2024
Any offer or sale of a security by an issuer in a transaction
				  that meets the requirements of this section is exempted from the securities
				  registration requirements of the Texas Securities Act and exempted from the
				  filing requirements contained in the Texas Securities Act, §22.A, and
				  Chapter 137 of this title (relating to Administrative Guidelines for Regulation
				  of Offers).
(1) Who may purchase.
				Sales of securities shall be made only to persons who are or the issuer
				reasonably believes are accredited investors. "Accredited investor" is defined
				in §
									RSA 107.2 of this
				title (relating to Definitions).
(2) Unavailable for certain issuers. The
				exemption is not available to an issuer that is in the development stage that
				either has no specific business plan or purpose or has indicated that its
				business plan is to engage in a merger or acquisition with an unidentified
				company or companies, or other entity or person.
(3) Investment intent; resales. 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 of
				sale shall be presumed to be with a view to distribution and not for
				investment, except a resale pursuant to a registration statement effective
				under the Texas Securities Act, §7, or to an accredited investor pursuant
				to an exemption available under the Texas Securities Act or Board
				rules.
(4) Disqualifications.
(A) The exemption is not available to an
				issuer if the issuer, any of the issuer's predecessors, any affiliated issuer,
				any of the issuer's directors, officers, general partners, beneficial owners of
				10% or more of any class of its equity securities, any of the issuer's
				promoters presently connected with the issuer in any capacity, any underwriter
				of the securities to be offered, or any partner, director, or officer of such
				underwriter:
(i) within the last five years,
				has filed a registration statement which is the subject of a currently
				effective registration stop order entered by any state securities administrator
				or the United States Securities and Exchange Commission;
(ii) within the last five years, has been
				convicted of any criminal offense in connection with the offer, purchase, or
				sale of any security, or involving fraud or deceit;
(iii) is currently subject to any state or
				federal administrative enforcement order or judgment, entered within the last
				five years, finding fraud or deceit in connection with the purchase or sale of
				any security; or
(iv) is currently
				subject to any order, judgment, or decree of any court of competent
				jurisdiction, entered within the last five years, temporarily, preliminarily,
				or permanently restraining or enjoining such party from engaging in or
				continuing to engage in any conduct or practice involving fraud or deceit in
				connection with the purchase or sale of any security.