Florida Senate - 2024 CS for SB 532
By the Committee on Banking and Insurance; and Senator Brodeur
597-02149-24 2024532c1
1 A bill to be entitled
2 An act relating to securities; amending s. 517.021,
3 F.S.; revising definitions; defining the terms “angel
4 investor group” and “business entity”; amending s.
5 517.051, F.S.; revising the list of securities that
6 are exempt from registration requirements under
7 certain provisions; amending s. 517.061, F.S.;
8 revising the list of transactions that are exempt from
9 registration requirements under certain provisions;
10 amending s. 517.0611, F.S.; revising a short title;
11 revising provisions relating to a certain registration
12 exemption for certain securities transactions;
13 updating the federal laws or regulations with which
14 the offer or sale of securities must be in compliance;
15 revising requirements for issuers relating to the
16 registration exemption; revising requirements for the
17 notice of offering that must be filed by the issuer
18 under certain circumstances; specifying the timeframe
19 within which issuers may amend such notice after any
20 material information contained in the notice becomes
21 inaccurate; authorizing the issuer to engage in
22 general advertising and general solicitation under
23 certain circumstances; specifying requirements for
24 such advertising and solicitation; requiring the
25 issuer to provide a disclosure statement to certain
26 entities and persons within a specified timeframe;
27 revising requirements for such statement; deleting
28 requirements for the escrow agreement; conforming
29 provisions to changes made by the act; revising the
30 amount that may be received for sales of certain
31 securities; providing a limit on securities that may
32 be sold by an issuer to an investor; deleting the
33 requirement that an issuer file and provide a certain
34 annual report; conforming cross-references; revising
35 the duties of intermediaries under certain
36 circumstances; providing obligations of issuers under
37 certain circumstances; providing that certain sales
38 are voidable within a specified timeframe; providing
39 requirements for purchasers’ notices to issuers to
40 void purchases; deleting provisions relating to funds
41 received from investors; creating s. 517.0612, F.S.;
42 providing a short title; providing applicability;
43 requiring that offers and sales of securities be in
44 accordance with certain federal laws and rules;
45 specifying certain requirements for issuers relating
46 to the registration exemption; specifying a limitation
47 on the amount of cash and other consideration that may
48 be received from sales of certain securities made
49 within a specified timeframe; prohibiting an issuer
50 from accepting more than a specified amount from a
51 single purchaser under certain circumstances;
52 authorizing the issuer to engage in general
53 advertising and general solicitation of the offering
54 under certain circumstances; specifying that a certain
55 prohibition is enforceable under ch. 517, F.S.;
56 requiring that the purchaser receive a disclosure
57 statement within a specified timeframe; specifying the
58 requirements for such statement; requiring certain
59 funds to be deposited into certain bank and depository
60 institutions; prohibiting the issuer from withdrawing
61 any amount of the offering proceeds until the target
62 offering amount has been received; requiring the
63 issuer to file a notice of the offering in a certain
64 format within a specified timeframe; requiring the
65 issuer to file an amended notice within a specified
66 timeframe under certain circumstances; prohibiting
67 agents of issuers from engaging in certain acts under
68 certain circumstances; providing that sales made under
69 the exemption are voidable within a specified
70 timeframe; providing requirements for purchasers’
71 notices to issuers to void purchases; creating s.
72 517.0613, F.S.; providing construction; providing that
73 registration exemptions under certain provisions are
74 not available to issuers for certain transactions
75 under specified circumstances; providing registration
76 requirements; creating s. 517.0614, F.S.; specifying
77 criteria for determining integration of offerings for
78 the purpose of registration or qualifying for a
79 registration exemption; specifying certain
80 requirements for the integration of offerings for an
81 exempt offering for which general solicitation is
82 prohibited; specifying certain requirements for the
83 integration of offerings for two or more exempt
84 offerings that allow general solicitation; specifying
85 the circumstances under which integration analysis is
86 not required; creating s. 517.0615, F.S.; specifying
87 that certain communications are not deemed to
88 constitute general solicitation or general advertising
89 under specified circumstances; creating s. 517.0616,
90 F.S.; providing that registration exemptions under
91 certain provisions are not available to certain
92 issuers under a specified circumstance; amending s.
93 517.081, F.S.; revising the duties and authority of
94 the Financial Services Commission; authorizing the
95 commission to establish certain criteria relating to
96 the issuance of certain securities, trusts, and
97 investments; authorizing the commission to prescribe
98 certain forms and establish procedures for depositing
99 fees and filing documents and requirements and
100 standards relating to prospectuses, advertisements,
101 and other sales literature; revising the list of
102 issuers that are ineligible to submit simplified
103 offering circulars; deleting provisions that require
104 issuers to provide certain documents to the Office of
105 Financial Regulation under certain circumstances;
106 revising the requirements that must be met before the
107 office must record the registration of a security;
108 amending s. 517.101, F.S.; revising requirements for
109 written consent to service in certain suits,
110 proceedings, and actions; amending s. 517.131, F.S.;
111 defining the term “final judgment”; specifying the
112 purpose of the Securities Guaranty Fund; making
113 technical changes; revising eligibility for payment
114 from the fund; requiring eligible persons or receivers
115 seeking payment from the fund to file a certain
116 application with the office on a certain form;
117 authorizing the commission to adopt rules regarding
118 electronic filing of such application; specifying the
119 timeframe within which certain eligible persons or
120 receivers must file such application; providing
121 requirements for such applications; requiring the
122 office to approve applications for payment under
123 certain circumstances and to provide applicants with
124 certain notices within a specified timeframe;
125 requiring eligible persons or receivers to assign to
126 the office all rights, titles, and interests in final
127 judgments and orders of restitution equal to a
128 specified amount under certain circumstances;
129 requiring the office to deem an application for
130 payment abandoned under certain circumstances;
131 requiring that the time period to complete
132 applications be tolled under certain circumstances;
133 deleting provisions relating to specified notices to
134 the office and to rulemaking authority; amending s.
135 517.141, F.S.; defining terms; revising the Securities
136 Guaranty Fund disbursement amounts to which eligible
137 persons are entitled; revising provisions regarding
138 payment of aggregate claims; providing for the
139 satisfaction of claims in the event of an insufficient
140 balance in the fund; requiring payments and
141 disbursements from the Securities Guaranty Fund to be
142 made by the Chief Financial Officer or his or her
143 authorized designee, upon authorization by the office;
144 requiring such authorization to be submitted within a
145 certain timeframe; deleting provisions regarding
146 requirements for payment of claims; conforming
147 provisions to changes made by the act; specifying the
148 circumstances under which a claimant must reimburse
149 the fund for payments received from the fund;
150 providing penalties; authorizing the Department of
151 Financial Services, rather than the office, to
152 institute legal proceedings for certain compliance
153 enforcement and to recover certain interests, costs,
154 and fees; amending s. 517.191, F.S.; deleting an
155 obsolete term; revising the civil penalty amounts for
156 certain violations; authorizing the office to recover
157 certain costs and attorney fees; requiring that moneys
158 recovered be deposited in a specified trust fund;
159 specifying the liability of control persons; providing
160 an exception; specifying circumstances under which
161 certain persons are deemed to have violated ch. 517,
162 F.S.; authorizing the office to issue and serve cease
163 and desist orders and emergency cease and desist
164 orders under certain circumstances; authorizing the
165 office to impose and collect administrative fines for
166 certain violations; specifying the disposition of such
167 fines; authorizing the office to bar applications or
168 notifications for licenses and registrations under
169 certain circumstances; conforming cross-references;
170 providing construction; specifying jurisdiction of the
171 courts relating to the sale or offer of certain
172 securities; making technical changes; amending s.
173 517.211, F.S.; providing for joint and several
174 liability of control persons in certain circumstances
175 for the purposes of specified actions; specifying the
176 date on which certain interest begins accruing in an
177 action for rescission; providing construction;
178 specifying that certain civil remedies extend to
179 purchasers or sellers of securities; making technical
180 changes; repealing s. 517.221, F.S., relating to cease
181 and desist orders; repealing s. 517.241, F.S.,
182 relating to remedies; amending s. 517.301, F.S.;
183 revising the circumstances under which certain
184 activities are considered unlawful and violations of
185 law; conforming provisions to changes made by the act;
186 revising the definition of the term “investment”;
187 specifying that certain misrepresentations by persons
188 issuing or selling securities are unlawful; specifying
189 that certain misrepresentations by persons registered
190 or required to be registered under certain provisions
191 or subject to certain requirements are unlawful;
192 specifying that obtaining money or property in
193 connection with the offer or sale of an investment is
194 unlawful under certain conditions; providing
195 construction; requiring disclaimers for certain
196 statements; making technical changes; repealing s.
197 517.311, F.S., relating to false representations,
198 deceptive words, and enforcement; repealing s.
199 517.312, F.S., relating to securities, investments,
200 and boiler rooms, prohibited practices, and remedies;
201 amending ss. 517.072 and 517.12, F.S.; conforming
202 cross-references and making technical changes;
203 amending ss. 517.1201 and 517.1202, F.S.; conforming
204 cross-references; amending s. 517.302, F.S.;
205 conforming a provision to changes made by the act and
206 making a technical change; providing an effective
207 date.
208
209 Be It Enacted by the Legislature of the State of Florida:
210
211 Section 1. Present subsections (3), (4), and (5) and
212 subsections (6) through (25) of section 517.021, Florida
213 Statutes, are redesignated as subsections (4), (5), and (6) and
214 subsections (8) through (27), respectively, new subsections (3)
215 and (7) are added to that section, and subsection (1) and
216 present subsections (4), (8), (9), and (14) of that section are
217 amended, to read:
218 517.021 Definitions.—When used in this chapter, unless the
219 context otherwise indicates, the following terms have the
220 following respective meanings:
221 (1) “Accredited investor” shall be defined by rule of the
222 commission in accordance with Securities and Exchange Commission
223 Rule 501, 17 C.F.R. s. 230.501, as amended.
224 (3) “Angel investor group” means a group of accredited
225 investors who hold regular meetings and have defined processes
226 and procedures for making investment decisions, individually or
227 among the membership of the group, and who are not associated
228 persons, affiliates, or agents of a dealer or investment
229 adviser.
230 (5)(4) “Boiler room” means an enterprise in which two or
231 more persons in a common scheme or enterprise solicit potential
232 investors through telephone calls, e-mail, text messages, social
233 media, chat rooms, or other electronic means engage in telephone
234 communications with members of the public using two or more
235 telephones at one location, or at more than one location in a
236 common scheme or enterprise.
237 (7) “Business entity” means any corporation, partnership,
238 limited partnership, limited liability company, proprietorship,
239 firm, enterprise, franchise, association, self-employed
240 individual, or trust, which may or may not be fictitiously
241 named, doing business in this state.
242 (10)(a)(8) “Dealer” includes, unless otherwise specified, a
243 person, other than an associated person of a dealer, that
244 engages, for all or part of the person’s time, directly or
245 indirectly, as agent or principal in the business of offering,
246 buying, selling, or otherwise dealing or trading in securities
247 issued by another person.
248 (b) The term “dealer” does not include any of the
249 following:
250 1.(a) A licensed practicing attorney who renders or
251 performs any such services in connection with the regular
252 practice of the attorney’s profession.
253 2.(b) A bank authorized to do business in this state,
254 except nonbank subsidiaries of a bank.
255 3.(c) A trust company having trust powers that it is
256 authorized to exercise in this state, which renders or performs
257 services in a fiduciary capacity incidental to the exercise of
258 its trust powers.
259 4.(d) A wholesaler selling exclusively to dealers.
260 5.(e) A person buying and selling for the person’s own
261 account exclusively through a registered dealer or stock
262 exchange.
263 6.(f) An issuer.
264 7.(g) A natural person representing an issuer in the
265 purchase, sale, or distribution of the issuer’s own securities
266 if such person:
267 a.1. Is an officer, a director, a limited liability company
268 manager or managing member, or a bona fide employee of the
269 issuer;
270 b.2. Has not participated in the distribution or sale of
271 securities for any issuer for which such person was, within the
272 preceding 12 months, an officer, a director, a limited liability
273 company manager or managing member, or a bona fide employee;
274 c.3. Primarily performs, or is intended to perform at the
275 end of the distribution, substantial duties for, or on behalf
276 of, the issuer other than in connection with transactions in
277 securities; and
278 d.4. Does not receive a commission, compensation, or other
279 consideration for the completed sale of the issuer’s securities
280 apart from the compensation received for regular duties to the
281 issuer.
282 (11)(9) “Federal covered adviser” means a person that is
283 registered or required to be registered under s. 203 of the
284 Investment Advisers Act of 1940, as amended. The term does not
285 include any person that is excluded from the definition of
286 investment adviser under subparagraphs (16)(b)1.-7. and 9
287 (14)(b)1.-8.
288 (16)(a)(14)(a) “Investment adviser” means a person, other
289 than an associated person of an investment adviser or a federal
290 covered adviser, that receives compensation, directly or
291 indirectly, and engages for all or part of the person’s time,
292 directly or indirectly, or through publications or writings, in
293 the business of advising others as to the value of securities or
294 as to the advisability of investments in, purchasing of, or
295 selling of securities.
296 (b) The term does not include any of the following:
297 1. A dealer or an associated person of a dealer whose
298 performance of services in paragraph (a) is solely incidental to
299 the conduct of the dealer’s or associated person’s business as a
300 dealer and who does not receive special compensation for those
301 services.
302 2. A licensed practicing attorney or certified public
303 accountant whose performance of such services is solely
304 incidental to the practice of the attorney’s or accountant’s
305 profession.
306 3. A bank authorized to do business in this state.
307 4. A bank holding company as defined in the Bank Holding
308 Company Act of 1956, as amended, authorized to do business in
309 this state.
310 5. A trust company having trust powers, as defined in s.
311 658.12, which it is authorized to exercise in this state, which
312 trust company renders or performs investment advisory services
313 in a fiduciary capacity incidental to the exercise of its trust
314 powers.
315 6. A person that renders investment advice exclusively to
316 insurance or investment companies.
317 7. A person that, during the preceding 12 months, has fewer
318 than six clients who are residents of this state. As used in
319 this subparagraph, the term “client” has the same meaning as
320 provided in Securities and Exchange Commission Rule 275.222-2,
321 17 C.F.R. s. 275.222-2, as amended does not hold itself out to
322 the general public as an investment adviser and has no more than
323 15 clients within 12 consecutive months in this state.
324 8. A person whose transactions in this state are limited to
325 those transactions described in s. 222(d) of the Investment
326 Advisers Act of 1940, as amended. Those clients listed in
327 subparagraph 6. may not be included when determining the number
328 of clients of an investment adviser for purposes of s. 222(d) of
329 the Investment Advisers Act of 1940, as amended.
330 9. A federal covered adviser.
331 9. The United States, a state, or any political subdivision
332 of a state, or any agency, authority, or instrumentality of any
333 such entity; a business entity that is wholly owned directly or
334 indirectly by such a governmental entity; or any officer, agent,
335 or employee of any such governmental or business entity who is
336 acting within the scope of his or her official duties.
337 Section 2. Present subsections (9) and (10) of section
338 517.051, Florida Statutes, are redesignated as subsections (10)
339 and (11), respectively, and amended, a new subsection (9) is
340 added to that section, and subsections (1), (3), (4), and (8) of
341 that section are amended, to read:
342 517.051 Exempt securities.—The exemptions provided herein
343 from the registration requirements of s. 517.07 are self
344 executing and do not require any filing with the office prior to
345 claiming such exemption. Any person who claims entitlement to
346 any of these exemptions bears the burden of proving such
347 entitlement in any proceeding brought under this chapter. The
348 registration provisions of s. 517.07 do not apply to any of the
349 following securities:
350 (1) A security issued or guaranteed by the United States or
351 any territory or insular possession of the United States, by the
352 District of Columbia, or by any state of the United States or by
353 any political subdivision or agency or other instrumentality
354 thereof.; provided that
355 (a) Except as provided in paragraph (b), a no person may
356 not shall directly or indirectly offer or sell securities, other
357 than general obligation bonds, described under this subsection
358 if the issuer or guarantor is in default or has been in default
359 any time after December 31, 1975, as to principal or interest:
360 1.(a) With respect to an obligation issued by the issuer or
361 successor of the issuer; or
362 2.(b) With respect to an obligation guaranteed by the
363 guarantor or successor of the guarantor,
364
365 except by an offering circular containing a full and fair
366 disclosure as prescribed by rule of the commission.
367 (b) Paragraph (a) does not apply to a security that is an
368 industrial or commercial development bond unless payments are
369 made or unconditionally guaranteed by a person whose securities
370 are exempt from registration under s. 18(b)(1) of the Securities
371 Act of 1933, as amended.
372 (3) A security issued by and which represents or will
373 represent an interest in or a direct obligation of or be
374 guaranteed by any of the following:
375 (a) An international bank of which the United States is a
376 member.
377 (b) A bank organized under the laws of the United States.
378 (c) A member bank of the Federal Reserve System.
379 (d) A depository institution, when a substantial portion of
380 its business consists of or will consist of receiving deposits
381 or share accounts that are insured to the maximum amount
382 authorized by statute by the Federal Deposit Insurance
383 Corporation or the National Credit Union Share Insurance Fund or
384 guaranteed by:
385 (a) A national bank, a federally chartered savings and loan
386 association, or a federally chartered savings bank, or the
387 initial subscription for equity securities in such national
388 bank, federally chartered savings and loan association, or
389 federally chartered savings bank;
390 (b) Any federal land bank, joint-stock land bank, or
391 national farm loan association under the provisions of the
392 Federal Farm Loan Act of July 17, 1916;
393 (c) An international bank of which the United States is a
394 member; or
395 (d) A corporation created and acting as an instrumentality
396 of the government of the United States.
397 (4) A security issued or guaranteed, as to principal,
398 interest, or dividend, by a business entity corporation owning
399 or operating a railroad, another common carrier, or any other
400 public service utility; provided that such business entity
401 corporation is subject to regulation or supervision whether as
402 to its rates and charges or as to the issue of its own
403 securities by a public commission, board, or officer of the
404 government of the United States, of any state, territory, or
405 insular possession of the United States, of any municipality
406 located therein, of the District of Columbia, or of the Dominion
407 of Canada or of any province thereof; also equipment securities
408 based on chattel mortgages, leases, or agreements for
409 conditional sale of cars, motive power, or other rolling stock
410 mortgaged, leased, or sold to or furnished for the use of or
411 upon such railroad or other public service utility corporation
412 or where the ownership or title of such equipment is pledged or
413 retained in accordance with the provisions of the laws of the
414 United States or of any state or of the Dominion of Canada to
415 secure the payment of such equipment securities; and also bonds,
416 notes, or other evidences of indebtedness issued by a holding
417 corporation and secured by collateral consisting of any
418 securities hereinabove described; provided, further, that the
419 collateral securities equal in fair value at least 125 percent
420 of the par value of the bonds, notes, or other evidences of
421 indebtedness so secured.
422 (8) Shares or other equity interests of a business entity
423 which represent ownership or entitle the holders of such shares
424 or other equity interests to possession and occupancy of
425 specific apartment units in property owned by such business
426 entity and organized and operated on a cooperative basis, solely
427 for residential purposes A note, draft, bill of exchange, or
428 banker’s acceptance having a unit amount of $25,000 or more
429 which arises out of a current transaction, or the proceeds of
430 which have been or are to be used for current transactions, and
431 which has a maturity period at the time of issuance not
432 exceeding 9 months exclusive of days of grace, or any renewal
433 thereof which has a maturity period likewise limited. This
434 subsection applies only to prime quality negotiable commercial
435 paper of a type not ordinarily purchased by the general public;
436 that is, paper issued to facilitate well-recognized types of
437 current operational business requirements and of a type eligible
438 for discounting by Federal Reserve banks.
439 (9) A member’s or owner’s interest in, or a retention
440 certificate or like security given in lieu of a cash patronage
441 dividend issued by, a not-for-profit membership entity operated
442 either as a cooperative under the cooperative laws of a state or
443 in accordance with the cooperative provisions of subchapter T of
444 chapter 1 of subtitle A of the United States Internal Revenue
445 Code, as amended, but not a member’s or owner’s interest,
446 retention certificate, or like security sold or transferred to a
447 person other than:
448 (a) A bona fide member of the not-for-profit membership
449 entity; or
450 (b) A person who becomes a bona fide member of the not-for
451 profit membership entity at the time of or in connection with
452 the sale or transfer.
453 (10)(9) A security issued by a business entity corporation
454 organized and operated exclusively for religious, educational,
455 benevolent, fraternal, charitable, or reformatory purposes and
456 not for pecuniary profit, no part of the net earnings of which
457 corporation inures to the benefit of any private stockholder or
458 individual, or any security of a fund that is excluded from the
459 definition of an investment company under s. 3(c)(10)(B) of the
460 Investment Company Act of 1940, as amended; provided that a no
461 person may not shall directly or indirectly offer or sell
462 securities under this subsection except by an offering circular
463 containing full and fair disclosure, as prescribed by the rules
464 of the commission, of all material information, including, but
465 not limited to, a description of the securities offered and
466 terms of the offering, a description of the nature of the
467 issuer’s business, a statement of the purpose of the offering
468 and the intended application by the issuer of the proceeds
469 thereof, and financial statements of the issuer prepared in
470 conformance with United States generally accepted accounting
471 principles. Section 6(c) of the Philanthropy Protection Act of
472 1995, Pub. L. No. 104-62, does shall not preempt any provision
473 of this chapter.
474 (11)(10) Any insurance or endowment policy or annuity
475 contract or optional annuity contract or self-insurance
476 agreement issued by a business entity corporation, insurance
477 company, reciprocal insurer, or risk retention group subject to
478 the supervision of the insurance regulator or bank regulator, or
479 any agency or officer performing like functions, of any state or
480 territory of the United States or the District of Columbia.
481 Section 3. Section 517.061, Florida Statutes, is amended to
482 read:
483 (Substantial rewording of section. See
484 s. 517.061, F.S., for present text.)
485 517.061 Exempt transactions.—Except as otherwise provided
486 in subsection (11), the exemptions provided herein from the
487 registration requirements of s. 517.07 are self-executing and do
488 not require any filing with the office before being claimed. Any
489 person who claims entitlement to an exemption under this section
490 bears the burden of proving such entitlement in any proceeding
491 brought under this chapter. The registration provisions of s.
492 517.07 do not apply to any of the following transactions;
493 however, such transactions are subject to s. 517.301:
494 (1)(a) Any judicial sale or any sale by an executor, an
495 administrator, a guardian, or a conservator; any sale by a
496 receiver or trustee in insolvency or bankruptcy; any sale by an
497 assignee as defined in s. 727.103 with respect to an assignment
498 as defined in that section; or any transaction incident to a
499 judicially approved reorganization in which a security is issued
500 in exchange for one or more outstanding securities, claims, or
501 property interests.
502 (b) Except for a security exchanged in a case brought under
503 Title 11 of the United States Code, a security that is issued in
504 exchange for one or more bona fide outstanding securities,
505 claims, or property interests, or partly in such exchange and
506 partly for cash, if the terms and conditions of such issuance
507 and exchange are approved:
508 1. By a court, an official or agency of the United States,
509 a banking or insurance commission of a state or territory of the
510 United States, or another governmental authority expressly
511 authorized by law to grant such approval.
512 2. After a hearing upon the fairness of such terms and
513 conditions and at which all persons to whom issuance of
514 securities in such exchange is proposed have the right to
515 appear.
516 (2) The issuance of notes or bonds in connection with the
517 acquisition of real property or renewals thereof, if such notes
518 or bonds are issued to the sellers of, and are secured by all or
519 part of, the real property so acquired.
520 (3) A transaction involving a stock dividend or equivalent
521 equity distribution, regardless of whether the business entity
522 distributing the dividend or equivalent equity distribution is
523 the issuer, if nothing of value is given by stockholders or
524 other equity holders for the dividend or equivalent equity
525 distribution other than the surrender of a right to a cash or
526 property dividend in the event that each stockholder or other
527 equity holder may elect to take the dividend or equivalent
528 equity distribution in cash, property, or stock.
529 (4) A transaction under an offer to existing security
530 holders of the issuer, including persons that at the date of the
531 transaction are holders of convertible securities, options, or
532 warrants, if a commission or other remuneration is not paid or
533 given, directly or indirectly, for soliciting a security holder
534 in this state.
535 (5) The issuance of securities to such equity security
536 holders or creditors of a business entity in the process of a
537 reorganization of such business entity, made in good faith and
538 not for the purpose of evading this chapter, either in exchange
539 for the securities of such equity security holders or claims of
540 such creditors or partly for cash and partly in exchange for the
541 securities or claims of such equity security holders or
542 creditors.
543 (6) A transaction involving the distribution of the
544 securities of an issuer to the security holders of another
545 person in connection with a merger, consolidation, exchange of
546 securities, sale of assets, or other reorganization to which the
547 issuer, or the issuer’s parent or subsidiary, and the other
548 person, or the person’s parent or subsidiary, are parties.
549 (7) The offer or sale of securities, solely in connection
550 with the transfer of ownership of an eligible privately held
551 company, through a merger and acquisition broker in accordance
552 with s. 517.12(21).
553 (8) The offer or sale of securities under a bona fide
554 employee stock purchase, savings, option, profit-sharing,
555 pension, or similar employee benefit plan, including any
556 securities, plan interests, and guarantees issued under a
557 compensatory benefit plan or compensation contract, contained in
558 a record, established by the issuer, its parents, its majority
559 owned subsidiaries, or the majority-owned subsidiaries of the
560 issuer’s parent for the participation of their employees. This
561 includes offers or sales of such securities to all of the
562 following persons:
563 (a) Directors, managers, managing members, general
564 partners, officers, consultants, and advisors.
565 (b) If the issuer is a business trust, trustees and former
566 trustees.
567 (c) Family members who acquire such securities from persons
568 described in this section through gifts or domestic relations
569 orders.
570 (d) Former employees, directors, managers, managing
571 members, general partners, officers, consultants, and advisors,
572 if those individuals were employed by or providing services to
573 the issuer when the securities were offered.
574 (e) Insurance agents who are exclusive insurance agents of
575 the issuer, or of the issuer’s parents or subsidiaries, or who
576 derive more than 50 percent of their annual income from such
577 persons.
578 (9) The offer or sale of securities to a bank, trust
579 company, savings institution, insurance company, dealer,
580 investment company as defined in the Investment Company Act of
581 1940, 15 U.S.C. s. 80a-3, as amended, pension or profit-sharing
582 trust, or qualified institutional buyer, whether any of such
583 entities is acting in its individual or fiduciary capacity.
584 (10)(a) The offer or sale, by or on behalf of an issuer, of
585 its own securities if the offer or sale is part of an offering
586 made in accordance with all of the following conditions:
587 1. There are no more than 35 purchasers, or the issuer
588 reasonably believes that there are no more than 35 purchasers,
589 of the securities of the issuer in this state during an offering
590 made in reliance upon this subsection or, if such offering
591 continues for a period in excess of 12 months, in any
592 consecutive 12-month period.
593 2. Neither the issuer nor any person acting on behalf of
594 the issuer offers or sells securities pursuant to this
595 subsection by means of any form of general solicitation or
596 general advertising in this state.
597 3. Before the sale, each purchaser or the purchaser’s
598 representative, if any, is provided with, or given reasonable
599 access to, full and fair disclosure of all material information,
600 which must include written notification of a purchaser’s right
601 to void the sale under subparagraph 4.
602 4. Any sale made pursuant to this subsection is voidable by
603 the purchaser within 3 days after the first tender of
604 consideration is made by such purchaser to the issuer by
605 notifying the issuer that the purchaser expressly voids the
606 purchase. The purchaser’s notice to the issuer must be sent by
607 e-mail to the issuer’s e-mail address set forth in the
608 disclosure document provided to the purchaser or purchaser’s
609 representative or by hand delivery, courier service, or other
610 method by which written proof of delivery to the issuer of the
611 purchaser’s election to rescind the purchase is evidenced.
612 (b) The following purchasers are excluded from the
613 calculation of the number of purchasers under subparagraph
614 (a)1.:
615 1. Any spouse or child of the purchaser or any related
616 family member who has the same principal residence as such
617 purchaser.
618 2. A trust or estate in which a purchaser, any of the
619 persons related to such purchaser specified in subparagraph 1.,
620 and any business entity specified in subparagraph 3.
621 collectively have more than 50 percent of the beneficial
622 interest, excluding any contingent interest.
623 3. A business entity in which a purchaser, any of the
624 persons related to such purchaser specified in subparagraph 1.,
625 and any trust or estate specified in subparagraph 2.
626 collectively are beneficial owners of more than 50 percent of
627 the equity securities or equity interest.
628 4. An accredited investor.
629
630 A business entity must be counted as one purchaser. However, if
631 the business entity is organized for the specific purpose of
632 acquiring the securities offered and is not an accredited
633 investor, each beneficial owner of equity securities or equity
634 interests in the business entity must be counted as a separate
635 purchaser. A noncontributory employee benefit plan within the
636 meaning of Title I of the Employee Retirement Income Security
637 Act of 1974 must be counted as one purchaser if the trustee
638 makes all investment decisions for the plan.
639 (11) Offers or sales of securities by an issuer in a
640 transaction that meets all of the following conditions:
641 (a) The offers or sales of securities are made only to
642 persons who are, or who the issuer reasonably believes are,
643 accredited investors.
644 (b) The issuer is not a business entity that has an
645 undefined business operation, lacks a business plan, lacks a
646 stated investment goal for the funds being raised, or plans to
647 engage in a merger or acquisition with an unspecified business
648 entity.
649 (c) The issuer reasonably believes that all purchasers are
650 purchasing for investment and not with the view to or for sale
651 in connection with a distribution of the security. Any resale of
652 a security sold in reliance on this exemption within 12 months
653 after sale is presumed to be with a view to distribution and not
654 for investment, except a resale pursuant to a registration
655 statement effective under this chapter or pursuant to an
656 exemption available under this chapter, the Securities Act of
657 1933, as amended, or the rules and regulations adopted
658 thereunder.
659 (d)1. A general announcement of the proposed offering, made
660 by any means, includes only the following information:
661 a. The name, address, and telephone number of the issuer of
662 the securities.
663 b. The name, a brief description, and price, if known, of
664 any security to be issued.
665 c. A brief description of the business.
666 d. The type, number, and aggregate amount of securities
667 being offered.
668 e. The name, address, and telephone number of the person to
669 contact for additional information.
670 f. A statement that:
671 (I) Sales will be made only to accredited investors;
672 (II) Money or other consideration is not being solicited
673 and will not be accepted by way of this general announcement;
674 and
675 (III) The securities have not been registered with or
676 approved by any state securities agency or the Securities and
677 Exchange Commission and are being offered and sold pursuant to
678 an exemption from registration.
679 2. The issuer, in connection with an offer, may provide
680 information in addition to the information provided in the
681 general announcement as specified in subparagraph 1. if such
682 information is delivered:
683 a. Through an electronic database that is restricted to
684 persons who have been prequalified as accredited investors; or
685 b. After the issuer reasonably believes that the
686 prospective purchaser is an accredited investor.
687 (e) The issuer does not use telephone solicitation unless,
688 before placing the call, the issuer reasonably believes that the
689 prospective purchaser to be solicited is an accredited investor.
690 (f) The issuer files with the office a notice of
691 transaction, a consent to service of process, and a copy of the
692 general announcement within 15 days after the first sale is made
693 in this state. The commission may adopt by rule procedures for
694 filing documents by electronic means.
695 (g) Dissemination of the general announcement of the
696 proposed offering to persons who are not accredited investors
697 does not disqualify the issuer from claiming the exemption under
698 this subsection.
699 (12) The isolated sale or offer for sale of securities when
700 made by or on behalf of a bona fide owner, not the issuer or
701 underwriter, of the securities, who disposes of such securities
702 for the owner’s own account, and such sale is not made directly
703 or indirectly for the benefit of the issuer or an underwriter of
704 such securities or for the direct or indirect promotion of any
705 scheme or enterprise with the intent of violating or evading
706 this chapter. For purposes of this subsection, isolated offers
707 or sales include, but are not limited to, an isolated offer or
708 sale made by or on behalf of a bona fide owner, rather than the
709 issuer or underwriter, of the securities if:
710 (a) The offer or sale of securities is in a transaction
711 satisfying all of the conditions specified in paragraphs (10)(a)
712 and (b); or
713 (b) The offer or sale of securities is in a transaction
714 exempt under s. 4(a)(1) of the Securities Act of 1933, as
715 amended, or under Securities and Exchange Commission rules or
716 regulations.
717 (13) By or for the account of a pledgeholder, a secured
718 party as defined in s. 679.1021(1)(ttt), or a mortgagee selling
719 or offering for sale or delivery in the ordinary course of
720 business and not for the purposes of avoiding the provisions of
721 this chapter, to liquidate a bona fide debt, a security pledged
722 in good faith as security for such debt.
723 (14) An unsolicited purchase or sale of securities on order
724 of, and as the agent for, another solely and exclusively by a
725 dealer registered pursuant to s. 517.12; provided that this
726 exemption applies solely and exclusively to such registered
727 dealers and does not authorize or permit the purchase or sale of
728 securities at the direction of, and as agent for, another by any
729 person other than a dealer so registered; and provided further
730 that such purchase or sale may not be directly or indirectly for
731 the benefit of the issuer or an underwriter of such securities
732 or for the direct or indirect promotion of any scheme or
733 enterprise with the intent of violating or evading this chapter.
734 (15) A nonissuer transaction with a federal covered adviser
735 with investments under management in excess of $100 million
736 acting in the exercise of discretionary authority in a signed
737 record for the account of others.
738 (16) The sale by or through a registered dealer of any
739 securities option if, at the time of the sale of the option:
740 (a) The performance of the terms of the option is
741 guaranteed by any dealer registered under the Securities
742 Exchange Act of 1934, as amended, which guaranty and dealer are
743 in compliance with such requirements or rules as may be approved
744 or adopted by the commission; or
745 (b)1. Such options transactions are cleared by the Options
746 Clearing Corporation or any other clearinghouse recognized by
747 commission rule;
748 2. The option is not sold by or for the benefit of the
749 issuer of the underlying security; and
750 3. The underlying security may be purchased or sold on a
751 recognized securities exchange registered under the Securities
752 Exchange Act of 1934, as amended.
753 (17)(a) The offer or sale of securities, as agent or
754 principal, by a dealer registered pursuant to s. 517.12, when
755 such securities are offered or sold at a price reasonably
756 related to the current market price of such securities, provided
757 that such securities are:
758 1. Securities of an issuer for which reports are required
759 to be filed by s. 13 or s. 15(d) of the Securities Exchange Act
760 of 1934, as amended;
761 2. Securities of a company registered under the Investment
762 Company Act of 1940, as amended;
763 3. Securities of an insurance company, as that term is
764 defined in s. 2(a)(17) of the Investment Company Act of 1940, as
765 amended; or
766 4. Securities, other than any security that is a federal
767 covered security and is not subject to any registration or
768 filing requirements under this chapter, that have been listed or
769 approved for listing upon notice of issuance by a securities
770 exchange registered under the Securities Exchange Act of 1934,
771 as amended; and all securities senior to any securities so
772 listed or approved for listing upon notice of issuance, or
773 represented by subscription rights which have been so listed or
774 approved for listing upon notice of issuance, or evidences of
775 indebtedness guaranteed by an issuer with a class of securities
776 listed or approved for listing upon notice of issuance by such
777 securities exchange, such securities to be exempt only so long
778 as such listings or approvals remain in effect. The exemption
779 provided in this subparagraph does not apply when the securities
780 are suspended from listing approval for listing or trading.
781 (b) The exemption provided in this subsection does not
782 apply if the sale is made for the direct or indirect benefit of
783 an issuer or a control person of such issuer or if such
784 securities constitute the whole or part of an unsold allotment
785 to, or subscription or participation by, a dealer as an
786 underwriter of such securities.
787 (c) The exemption provided in this subsection is not
788 available for any securities that have been denied registration
789 pursuant to s. 517.111. Additionally, the office may deny this
790 exemption with reference to any particular security, other than
791 a federal covered security, by order published in such manner as
792 the office finds proper.
793 (18) Any nonissuer transaction by a registered dealer, and
794 any resale transaction by a sponsor of a unit investment trust
795 registered under the Investment Company Act of 1940, as amended,
796 in a security of a class that has been outstanding in the hands
797 of the public for at least 90 days; provided that, at the time
798 of the transaction, the following conditions in paragraphs (a),
799 (b), and (c) and either paragraph (d) or (e) are met:
800 (a) The issuer of the security is actually engaged in
801 business and is not in the organizational stage or in bankruptcy
802 or receivership and is not a blank check, blind pool, or shell
803 company whose primary plan of business is to engage in a merger
804 or combination of the business with, or an acquisition of, an
805 unidentified person.
806 (b) The security is sold at a price reasonably related to
807 the current market price of the security.
808 (c) The security does not constitute the whole or part of
809 an unsold allotment to, or a subscription or participation by,
810 the dealer as an underwriter of the security.
811 (d) The security is listed in a nationally recognized
812 securities manual designated by rule of the commission or a
813 document filed with and publicly viewable through the Securities
814 and Exchange Commission electronic data gathering and retrieval
815 system and contains:
816 1. A description of the business and operations of the
817 issuer;
818 2. The names of the issuer’s officers and directors, if
819 any, or, in the case of an issuer not domiciled in the United
820 States, the corporate equivalents of such persons in the
821 issuer’s country of domicile;
822 3. An audited balance sheet of the issuer as of a date
823 within 18 months before such transaction or, in the case of a
824 reorganization or merger in which parties to the reorganization
825 or merger had such audited balance sheet, a pro forma balance
826 sheet; and
827 4. An audited income statement for each of the issuer’s
828 immediately preceding 2 fiscal years, or for the period of
829 existence of the issuer, if in existence for less than 2 years
830 or, in the case of a reorganization or merger in which the
831 parties to the reorganization or merger had such audited income
832 statement, a pro forma income statement.
833 (e)1. The issuer of the security has a class of equity
834 securities listed on a national securities exchange registered
835 under the Securities Exchange Act of 1934, as amended;
836 2. The class of security is quoted, offered, purchased, or
837 sold through an alternative trading system registered under
838 Securities and Exchange Commission Regulation ATS, 17 C.F.R. s.
839 242.301, as amended, and the issuer of the security has made
840 current information publicly available in accordance with
841 Securities and Exchange Commission Rule 15c2-11, 17 C.F.R. s.
842 240.15c2-11, as amended;
843 3. The issuer of the security is a unit investment trust
844 registered under the Investment Company Act of 1940, as amended;
845 4. The issuer of the security has been engaged in
846 continuous business, including predecessors, for at least 3
847 years; or
848 5. The issuer of the security has total assets of at least
849 $2 million based on an audited balance sheet as of a date within
850 18 months before such transaction or, in the case of a
851 reorganization or merger in which parties to the reorganization
852 or merger had such audited balance sheet, a pro forma balance
853 sheet.
854 (19) The offer or sale of any security effected by or
855 through a person in compliance with s. 517.12(16).
856 (20) A nonissuer transaction in an outstanding security by
857 or through a dealer registered or exempt from registration under
858 this chapter, if all of the following are true:
859 (a) The issuer is a reporting issuer in a foreign
860 jurisdiction designated by this subsection or by commission
861 rule, and the issuer has been subject to continuous reporting
862 requirements in such foreign jurisdiction for not less than 180
863 days before the transaction.
864 (b) The security is listed on the securities exchange
865 designated by this subsection or by commission rule, is a
866 security of the same issuer which is of senior or substantially
867 equal rank to the listed security, or is a warrant or right to
868 purchase or subscribe to any such security.
869
870 For purposes of this subsection, Canada, together with its
871 provinces and territories, is designated as a foreign
872 jurisdiction, and The Toronto Stock Exchange, Inc., is
873 designated as a securities exchange. If, after an administrative
874 hearing in compliance with ss. 120.569 and 120.57, the office
875 finds that revocation is necessary or appropriate in furtherance
876 of the public interest and for the protection of investors, it
877 may revoke the designation of a securities exchange under this
878 subsection.
879 (21) Other transactions exempted by commission rule upon a
880 finding by the office that the application of s. 517.07 to a
881 particular transaction is not necessary or appropriate in
882 furtherance of the public interest and for the protection of
883 investors due to the small dollar amount of the securities
884 involved or the limited character of the offering. In
885 conjunction with its adoption by rule of such exemptions, the
886 commission may exempt persons selling or offering for sale
887 securities in such a transaction from the registration
888 requirements of s. 517.12. A rule adopted by the commission
889 under this subsection may not have the effect of narrowing or
890 limiting any exemption specified in this section.
891 Section 4. Section 517.0611, Florida Statutes, is amended
892 to read:
893 517.0611 The Florida Limited Offering Exemption Intrastate
894 crowdfunding.—
895 (1) This section may be cited as the “The Florida Limited
896 Offering Intrastate Crowdfunding Exemption.”
897 (2) The registration provisions of s. 517.07 do not apply
898 to a securities transaction conducted in accordance with this
899 section; however, such transaction is subject to s. 517.301
900 Notwithstanding any other provision of this chapter, an offer or
901 sale of a security by an issuer is an exempt transaction under
902 s. 517.061 if the offer or sale is conducted in accordance with
903 this section. The exemption provided in this section may not be
904 used in conjunction with any other exemption under s. 517.051 or
905 s. 517.061.
906 (3) The offer or sale of securities under this section must
907 be conducted in accordance with the requirements of the federal
908 exemption for intrastate offerings in s. 3(a)(11) of the
909 Securities Act of 1933, 15 U.S.C. s. 77c(a)(11), as amended, and
910 United States Securities and Exchange Commission Rule 147, 17
911 C.F.R. s. 230.147, as amended, or Securities and Exchange
912 Commission Rule 147A, 17. C.F.R. s. 230.147A, as amended adopted
913 pursuant to the Securities Act of 1933.
914 (4) An issuer must:
915 (a) Must be a for-profit business entity that maintains
916 formed under the laws of the state, be registered with the
917 Secretary of State, maintain its principal place of business in
918 the state, and derives derive its revenues primarily from
919 operations in this the state.
920 (b) Must conduct transactions for an the offering of $2.5
921 million or more through a dealer registered with the office or
922 an intermediary registered under s. 517.12 s. 517.12(19). For an
923 offering of less than $2.5 million, the issuer may, but is not
924 required to, use such a dealer or intermediary.
925 (c) May not be, either before or as a result of the
926 offering, an investment company as defined in s. 3 of the
927 Investment Company Act of 1940, 15 U.S.C. s. 80a-3, as amended,
928 or subject to the reporting requirements of s. 13 or s. 15(d) of
929 the Securities Exchange Act of 1934, 15 U.S.C. s. 78m or s.
930 78o(d), as amended.
931 (d) May not be a business entity that has company with an
932 undefined business operation, a company that lacks a business
933 plan, a company that lacks a stated investment goal for the
934 funds being raised, or a company that plans to engage in a
935 merger or acquisition with an unspecified business entity.
936 (e) May not be subject to a disqualification established by
937 the commission or office or a disqualification described in s.
938 517.0616 or s. 517.1611 or United States Securities and Exchange
939 Commission Rule 506(d), 17 C.F.R. 230.506(d), adopted pursuant
940 to the Securities Act of 1933. Each director, officer, manager,
941 managing member, or general partner, or person occupying a
942 similar status or performing a similar function, or person
943 holding more than 20 percent of the equity interest shares of
944 the issuer, is subject to this paragraph requirement.
945 (f) Must deposit all funds received from investors in an
946 account in Execute an escrow agreement with a federally insured
947 financial institution authorized to do business in this the
948 state, and maintain all such funds in the account until the
949 target offering amount has been reached or the offering has been
950 terminated or has expired. If the target offering amount has not
951 been reached within the period specified by the issuer in the
952 disclosure statement provided to investors, or if the offering
953 is terminated or expires, the issuer must refund invested funds
954 to all investors within 10 business days after such occurrence
955 for the deposit of investor funds, and ensure that all offering
956 proceeds are provided to the issuer only when the aggregate
957 capital raised from all investors is equal to or greater than
958 the target offering amount.
959 (g) Must use all funds in accordance with the use of
960 proceeds as disclosed to prospective investors Allow investors
961 to cancel a commitment to invest within 3 business days before
962 the offering deadline, as stated in the disclosure statement,
963 and issue refunds to all investors if the target offering amount
964 is not reached by the offering deadline.
965 (5) The issuer must file a notice of the offering with the
966 office, in writing or in electronic form, in a format prescribed
967 by commission rule, together with a nonrefundable filing fee of
968 $200. The filing fee must shall be deposited into the Regulatory
969 Trust Fund of the office. The commission may adopt rules
970 establishing procedures for the deposit of fees and the filing
971 of documents by electronic means if the procedures provide the
972 office with the information and data required by this section. A
973 notice is effective upon receipt, by the office, of the
974 completed form, filing fee, and an irrevocable written consent
975 to service of civil process, similar to that provided for in s.
976 517.101. The notice may be terminated by filing with the office
977 a notice of termination. The notice and offering expire 12
978 months after filing the notice with the office and are not
979 eligible for renewal. The notice must:
980 (a) Be filed with the office at least 10 days before the
981 issuer commences an offering of securities or the offering is
982 displayed on a website of an intermediary in reliance upon the
983 exemption provided by this section.
984 (b) Indicate that the issuer is conducting an offering in
985 reliance upon the exemption provided by this section.
986 (c) Contain the name and contact information, including an
987 e-mail address, of the issuer.
988 (d) Identify any predecessors, owners, officers, directors,
989 general partners, managers, managing members, and control
990 persons or any person occupying a similar status or performing a
991 similar function of the issuer, including that person’s title,
992 his or her status as a partner, trustee, or sole proprietor or a
993 similar role, and his or her ownership percentage.
994 (e) Identify the federally insured financial institution
995 into, authorized to do business in the state, in which investor
996 funds will be deposited, in accordance with the escrow
997 agreement.
998 (f) Require an attestation under oath that the issuer, its
999 predecessors, affiliated issuers, directors, officers, and
1000 control persons, or any other person occupying a similar status
1001 or performing a similar function, are not currently and have not
1002 been within the past 10 years the subject of regulatory or
1003 criminal actions involving fraud or deceit.
1004 (g) Include documentation verifying that the issuer is
1005 organized under the laws of the state and authorized to do
1006 business in the state.
1007 (h) If applicable, include the intermediary’s website
1008 address where the issuer’s securities will be offered.
1009 (g)(i) State Include the target offering amount and the
1010 date, not to exceed 365 days, by which the target amount must be
1011 reached in order to avoid termination of the offering.
1012 (6) The issuer must amend the notice form within 10
1013 business 30 days after any material information contained in the
1014 notice becomes inaccurate for any reason. The commission may
1015 require, by rule, an issuer who has filed a notice under this
1016 section to file amendments with the office.
1017 (7) The issuer may engage in general advertising and
1018 general solicitation of the offering to prospective investors.
1019 Any oral or written statements in advertising or solicitation of
1020 the offering which contain a material misstatement, or which
1021 fail to disclose material information, are subject to
1022 enforcement under this chapter. Any general advertising or other
1023 general announcement must state that the offering is limited and
1024 open only to residents of this state.
1025 (8) The issuer must provide a disclosure statement to
1026 investors and the dealer or intermediary, along with a copy to
1027 the office at the time that the notice is filed, and make
1028 available to potential investors through the dealer or
1029 intermediary, as applicable; to the office at the time that the
1030 notice is filed; and to each prospective investor at least 3
1031 days before the investor’s commitment to purchase or payment of
1032 any consideration. The, a disclosure statement must contain
1033 containing material information about the issuer and the
1034 offering, including all of the following:
1035 (a) The name, legal status, physical address, e-mail
1036 address, and website address of the issuer.
1037 (b) The names of the directors, officers, managers,
1038 managing members, and general partners and any person occupying
1039 a similar status or performing a similar function, and the name
1040 and ownership percentage of each person holding more than 20
1041 percent of the issuer’s equity interests shares of the issuer.
1042 (c) A description of the current business of the issuer and
1043 the anticipated business plan of the issuer.
1044 (d) A description of the stated purpose and intended use of
1045 the proceeds of the offering.
1046 (e) The target offering amount and, the deadline to reach
1047 the target offering amount, and regular updates regarding the
1048 progress of the issuer in meeting the target offering amount.
1049 (f) The price to the public of the securities or the method
1050 for determining the price. However, before the sale, each
1051 investor must receive in writing the final price and all
1052 required disclosures and have an opportunity to rescind the
1053 commitment to purchase the securities.
1054 (g) A description of the ownership and capital structure of
1055 the issuer, including:
1056 1. Terms of the securities being offered and each class of
1057 security of the issuer, including how those terms may be
1058 modified, and a summary of the differences between such
1059 securities, including how the rights of the securities being
1060 offered may be materially limited, diluted, or qualified by
1061 rights of any other class of security of the issuer.
1062 2. A description of how the exercise of the rights held by
1063 the principal equity holders shareholders of the issuer could
1064 negatively impact the purchasers of the securities being
1065 offered.
1066 3. The name and ownership level of each existing
1067 shareholder who owns more than 20 percent of any class of the
1068 securities of the issuer.
1069 4. How the securities being offered are being valued, and
1070 examples of methods of how such securities may be valued by the
1071 issuer in the future, including during subsequent corporate
1072 actions.
1073 5. The risks to purchasers of the securities relating to
1074 minority ownership in the issuer, the risks associated with
1075 corporate action, including additional issuances of shares, a
1076 sale of the issuer or of assets of the issuer, or transactions
1077 with related parties.
1078 (h) A statement that the security being offered is not
1079 registered under federal or state securities laws and that the
1080 securities are subject to the limitation on resale contained in
1081 Securities and Exchange Commission Rule 147 or Rule 147A.
1082 (i) Any issuer plans, formal or informal, to offer
1083 additional securities in the future.
1084 (j) The risks to purchasers of the securities relating to
1085 minority ownership in the issuer.
1086 (k)(h) A description of the financial condition of the
1087 issuer.
1088 1. For offerings that, in combination with all other
1089 offerings of the issuer within the preceding 12-month period,
1090 have target offering amounts of $500,000 $100,000 or less, the
1091 financial statements of the issuer may be, but are not required
1092 to be, included description must include the most recent income
1093 tax return filed by the issuer, if any, and a financial
1094 statement that must be certified by the principal executive
1095 officer of the issuer as true and complete in all material
1096 respects.
1097 2. For offerings that, in combination with all other
1098 offerings of the issuer within the preceding 12-month period,
1099 have target offering amounts of more than $500,000 $100,000, but
1100 not more than $2.5 million $500,000, the description must
1101 include financial statements prepared in accordance with
1102 generally accepted accounting principles and reviewed by a
1103 certified public accountant, as defined in s. 473.302, who is
1104 independent of the issuer, using professional standards and
1105 procedures for such review or standards and procedures
1106 established by commission the office, by rule, for such purpose.
1107 3. For offerings that, in combination with all other
1108 offerings of the issuer within the preceding 12-month period,
1109 have target offering amounts of more than $2.5 million $500,000,
1110 the description must include audited financial statements
1111 prepared in accordance with generally accepted accounting
1112 principles by a certified public accountant, as defined in s.
1113 473.302, who is independent of the issuer, and other
1114 requirements as the commission may establish by rule.
1115 (l)(i) The following statement in boldface, conspicuous
1116 type on the front page of the disclosure statement:
1117
1118 Neither the Securities and Exchange Commission nor any
1119 state securities commission has approved or
1120 disapproved these securities or determined if this
1121 disclosure statement is truthful or complete. Any
1122 representation to the contrary is a criminal offense.
1123
1124 These securities are offered under, and will be sold
1125 in reliance upon, an exemption from the registration
1126 requirements of federal and Florida securities laws.
1127 Consequently, Neither the Federal Government nor the
1128 State of Florida has reviewed the accuracy or
1129 completeness of any offering materials. In making an
1130 investment decision, investors must rely on their own
1131 examination of the issuer and the terms of the
1132 offering, including the merits and risks involved.
1133 These securities are subject to restrictions on
1134 transferability and resale and may not be transferred
1135 or resold except as specifically authorized by
1136 applicable federal and state securities laws.
1137 Investing in these securities involves a speculative
1138 risk, and investors should be able to bear the loss of
1139 their entire investment.
1140 (8) The issuer shall provide to the office a copy of the
1141 escrow agreement with a financial institution authorized to
1142 conduct business in this state. All investor funds must be
1143 deposited in the escrow account. The escrow agreement must
1144 require that all offering proceeds be released to the issuer
1145 only when the aggregate capital raised from all investors is
1146 equal to or greater than the minimum target offering amount
1147 specified in the disclosure statement as necessary to implement
1148 the business plan, and that all investors will receive a full
1149 return of their investment commitment if that target offering
1150 amount is not raised by the date stated in the disclosure
1151 statement.
1152 (9) The sum of all cash and other consideration received
1153 for sales of a security under this section may not exceed $5 $1
1154 million, less the aggregate amount received for all sales of
1155 securities by the issuer within the 12 months preceding the
1156 first offer or sale made in reliance upon this exemption. Offers
1157 or sales to a person owning 20 percent or more of the
1158 outstanding equity interests shares of any class or classes of
1159 securities or to an officer, director, manager, managing member,
1160 general partner, or trustee, or a person occupying a similar
1161 status, do not count toward this limitation.
1162 (10) Unless the investor is an accredited investor, or the
1163 issuer reasonably believes that the investor is an accredited
1164 investor as defined by Rule 501 of Regulation D, adopted
1165 pursuant to the Securities Act of 1933, the aggregate amount of
1166 securities sold by an issuer to an investor in transactions
1167 exempt from registration requirements under this subsection in a
1168 12-month period may not exceed $10,000:
1169 (a) The greater of $2,000 or 5 percent of the annual income
1170 or net worth of such investor, if the annual income or the net
1171 worth of the investor is less than $100,000.
1172 (b) Ten percent of the annual income or net worth of such
1173 investor, not to exceed a maximum aggregate amount sold of
1174 $100,000, if either the annual income or net worth of the
1175 investor is equal to or exceeds $100,000.
1176 (11) The issuer shall file with the office and provide to
1177 investors free of charge an annual report of the results of
1178 operations and financial statements of the issuer within 45 days
1179 after the end of its fiscal year, until no securities under this
1180 offering are outstanding. The annual reports must meet the
1181 following requirements:
1182 (a) Include an analysis by management of the issuer of the
1183 business operations and the financial condition of the issuer,
1184 and disclose the compensation received by each director,
1185 executive officer, and person having an ownership interest of 20
1186 percent or more of the issuer, including cash compensation
1187 earned since the previous report and on an annual basis, and any
1188 bonuses, stock options, other rights to receive securities of
1189 the issuer, or any affiliate of the issuer, or other
1190 compensation received.
1191 (b) Disclose any material change to information contained
1192 in the disclosure statements which was not disclosed in a
1193 previous report.
1194 (11)(12)(a) A notice-filing under this section must shall
1195 be summarily suspended by the office if:
1196 (a) The payment for the filing is dishonored by the
1197 financial institution upon which the funds are drawn. For
1198 purposes of s. 120.60(6), failure to pay the required notice
1199 filing fee constitutes an immediate and serious danger to the
1200 public health, safety, and welfare. The office shall enter a
1201 final order revoking a notice-filing in which the payment for
1202 the filing is dishonored by the financial institution upon which
1203 the funds are drawn; or.
1204 (b) A notice-filing under this section shall be summarily
1205 suspended by the office if The issuer made a material false
1206 statement in the issuer’s notice-filing. The summary suspension
1207 remains shall remain in effect until a final order is entered by
1208 the office. For purposes of s. 120.60(6), a material false
1209 statement made in the issuer’s notice-filing constitutes an
1210 immediate and serious danger to the public health, safety, and
1211 welfare. If an issuer made a material false statement in the
1212 issuer’s notice-filing, the office must shall enter a final
1213 order revoking the notice-filing, issue a fine as prescribed by
1214 s. 517.191(9) s. 517.221(3), and issue permanent bars under s.
1215 517.191(10) s. 517.221(4) to the issuer and all owners,
1216 officers, directors, general partners, and control persons, or
1217 any person occupying a similar status or performing a similar
1218 function of the issuer, including title; status as a partner,
1219 trustee, sole proprietor, or similar role; and ownership
1220 percentage.
1221 (12)(13) If the issuer employs the services of an
1222 intermediary, the An intermediary must:
1223 (a) Take measures, as established by commission rule, to
1224 reduce the risk of fraud with respect to the transactions,
1225 including verifying that the issuer is in compliance with the
1226 requirements of this section and, if necessary, denying an
1227 issuer access to its platform if the intermediary believes it is
1228 unable to adequately assess the risk of fraud of the issuer or
1229 its potential offering.
1230 (b) Provide basic information on its website regarding the
1231 high risk of investment in and limitation on the resale of
1232 exempt securities and the potential for loss of an entire
1233 investment. The basic information must include, but need not be
1234 limited to, all of the following:
1235 1. A description of the financial institution into which
1236 investor funds will be deposited escrow agreement that the
1237 issuer has executed and the conditions for the use release of
1238 such funds by to the issuer in accordance with the agreement and
1239 subsection (4).
1240 2. A description of whether financial information provided
1241 by the issuer has been audited by an independent certified
1242 public accountant, as defined in s. 473.302.
1243 (c) Obtain from each prospective investor a zip code or
1244 residence address, a copy of a driver license, and any other
1245 proof of residency in order for the issuer or intermediary to
1246 reasonably believe that the potential investor is a resident of
1247 this state. The commission may adopt rules authorizing
1248 additional forms of identification and prescribing the process
1249 for verifying any identification presented by the prospective
1250 investor.
1251 (d) Obtain information sufficient for the issuer or
1252 intermediary to reasonably believe that a particular prospective
1253 investor is an accredited investor
1254 (c) Obtain a zip code or residence address from each
1255 potential investor who seeks to view information regarding
1256 specific investment opportunities, in order to confirm that the
1257 potential investor is a resident of the state.
1258 (d) Obtain and verify a valid Florida driver license number
1259 or Florida identification card number from each investor before
1260 purchase of a security to confirm that the investor is a
1261 resident of the state. The commission may adopt rules
1262 authorizing additional forms of identification and prescribing
1263 the process for verifying any identification presented by the
1264 investor.
1265 (e) Obtain an affidavit from each investor stating that the
1266 investment being made by the investor is consistent with the
1267 income requirements of subsection (10).
1268 (f) Direct the release of investor funds in escrow in
1269 accordance with subsection (4).
1270 (g) Direct investors to transmit funds directly to the
1271 financial institution designated in the escrow agreement to hold
1272 the funds for the benefit of the investor.
1273 (e)(h) Provide a monthly update for each offering, after
1274 the first full month after the date of the offering. The update
1275 must be accessible on the intermediary’s website and must
1276 display the date and amount of each sale of securities, and each
1277 cancellation of commitment to invest, in the previous calendar
1278 month.
1279 (i) Require each investor to certify in writing, including
1280 as part of such certification his or her signature and his or
1281 her initials next to each paragraph of the certification, as
1282 follows:
1283 I understand and acknowledge that:
1284 I am investing in a high-risk, speculative business
1285 venture. I may lose all of my investment, and I can afford the
1286 loss of my investment.
1287 This offering has not been reviewed or approved by any
1288 state or federal securities commission or other regulatory
1289 authority and no regulatory authority has confirmed the accuracy
1290 or determined the adequacy of any disclosure made to me relating
1291 to this offering.
1292 The securities I am acquiring in this offering are illiquid
1293 and are subject to possible dilution. There is no ready market
1294 for the sale of the securities. It may be difficult or
1295 impossible for me to sell or otherwise dispose of the
1296 securities, and I may be required to hold the securities
1297 indefinitely.
1298 I may be subject to tax on my share of the taxable income
1299 and losses of the issuer, whether or not I have sold or
1300 otherwise disposed of my investment or received any dividends or
1301 other distributions from the issuer.
1302 By entering into this transaction with the issuer, I am
1303 affirmatively representing myself as being a Florida resident at
1304 the time this contract is formed, and if this representation is
1305 subsequently shown to be false, the contract is void.
1306 If I resell any of the securities I am acquiring in this
1307 offering to a person that is not a Florida resident within 9
1308 months after the closing of the offering, my contract with the
1309 issuer for the purchase of these securities is void.
1310 (j) Require each investor to answer questions demonstrating
1311 an understanding of the level of risk generally applicable to
1312 investments in startups, emerging businesses, and small issuers,
1313 and an understanding of the risk of illiquidity.
1314 (f)(k) Take reasonable steps to protect personal
1315 information collected from investors, as required by s. 501.171.
1316 (g)(l) Prohibit its directors, and officers, managers,
1317 managing members, general partners, employees, and agents from
1318 having any financial interest in the issuer using its services.
1319 (m) Implement written policies and procedures that are
1320 reasonably designed to achieve compliance with federal and state
1321 securities laws; comply with the anti-money laundering
1322 requirements of 31 C.F.R. chapter X applicable to registered
1323 brokers; and comply with the privacy requirements of 17 C.F.R.
1324 part 248 relating to brokers.
1325 (13)(14) An intermediary not registered as a dealer under
1326 s. 517.12(5) may not:
1327 (a) Offer investment advice or recommendations. A refusal
1328 by an intermediary to post an offering that it deems not
1329 credible or that represents a potential for fraud may not be
1330 construed as an offer of investment advice or recommendation.
1331 (b) Solicit purchases, sales, or offers to buy securities
1332 offered or displayed on its website.
1333 (c) Compensate employees, agents, or other persons for the
1334 solicitation of, or based on the sale of, securities offered or
1335 displayed on its website.
1336 (d) Hold, manage, possess, or otherwise handle investor
1337 funds or securities.
1338 (e) Compensate promoters, finders, or lead generators for
1339 providing the intermediary with the personal identifying
1340 information of any prospective potential investor.
1341 (f) Engage in any other activities set forth by commission
1342 rule.
1343 (14) If the issuer does not employ a dealer or an
1344 intermediary for an offering pursuant to the exemption created
1345 under this section, the issuer must fulfill each of the
1346 obligations specified in paragraphs (12)(c)-(f).
1347 (15) Any sale made pursuant to the exemption created under
1348 this section is voidable by the purchaser within 3 days after
1349 the first tender of consideration is made by such purchaser to
1350 the issuer by notifying the issuer that the purchaser expressly
1351 voids the purchase. The purchaser’s notice to the issuer must be
1352 sent by e-mail to the issuer’s e-mail address set forth in the
1353 disclosure statement that is provided to the purchaser or
1354 purchaser’s representative or by certified mail or overnight
1355 delivery service with proof of delivery to the mailing address
1356 set forth in the disclosure statement All funds received from
1357 investors must be directed to the financial institution
1358 designated in the escrow agreement to hold the funds and must be
1359 used in accordance with representations made to investors by the
1360 intermediary. If an investor cancels a commitment to invest, the
1361 intermediary must direct the financial institution designated to
1362 hold the funds to promptly refund the funds of the investor.
1363 Section 5. Section 517.0612, Florida Statutes, is created
1364 to read:
1365 517.0612 Florida Invest Local Exemption.—
1366 (1) This section may be cited as the “Florida Invest Local
1367 Exemption.”
1368 (2) The registration provisions of s. 517.07 do not apply
1369 to a securities transaction conducted in accordance with this
1370 section; however, such transaction is subject to s. 517.301.
1371 (3) The offer or sale of securities under this section must
1372 meet the requirements of the federal exemption for intrastate
1373 offerings in s. 3(a)(11) of the Securities Act of 1933,
1374 Securities and Exchange Commission Rule 147, or Securities and
1375 Exchange Commission Rule 147A, as amended.
1376 (4) The issuer must be a for-profit business entity
1377 registered with the Department of State which has its principal
1378 place of business in this state. The issuer may not be, before
1379 or as a result of the offering:
1380 (a) An investment company as defined in the Investment
1381 Company Act of 1940, as amended;
1382 (b) Subject to the reporting requirements of the Securities
1383 and Exchange Act of 1934, as amended;
1384 (c) A business entity that has an undefined business
1385 operation, lacks a business plan, lacks a stated investment goal
1386 for the funds being raised, or plans to engage in a merger or
1387 acquisition with an unspecified business entity; or
1388 (d) Subject to a disqualification as provided in s.
1389 517.0616.
1390 (5) The sum of all cash and other consideration received
1391 from all sales of the securities in reliance upon the exemption
1392 under this section may not exceed $500,000, less the aggregate
1393 amount received for all sales of securities by the issuer within
1394 the 12 months before the first offer or sale made in reliance on
1395 this exemption.
1396 (6)(a) The issuer may not accept more than $10,000 from any
1397 single purchaser unless any of the following apply:
1398 1. The issuer reasonably believes that the purchaser is an
1399 accredited investor.
1400 2. The purchaser is an officer, director, partner, or
1401 trustee, or an individual occupying a similar status or
1402 performing similar functions, of the issuer.
1403 3. The purchaser is an owner of 10 percent or more of the
1404 issuer’s outstanding equity.
1405 (b) For purposes of this subsection, the following persons
1406 must be treated collectively as a single purchaser:
1407 1. Any spouse or child of the purchaser or any related
1408 family member who has the same primary residence as the
1409 purchaser.
1410 2. Any business entity of which the purchaser and any
1411 person related to the purchaser as provided in subparagraph 1.
1412 collectively own more than 50 percent of the equity interest.
1413 (7) The issuer may engage in general advertising and
1414 general solicitation of the offering. Any general advertising or
1415 other general announcement must state that the offer is limited
1416 and open only to residents of this state. Any oral or written
1417 statements in advertising or solicitation of the offer which
1418 contain a material misstatement, or which fail to disclose
1419 material information, are subject to enforcement under this
1420 chapter.
1421 (8) A purchaser must receive, at least 3 business days
1422 before any binding commitment to purchase or consideration paid,
1423 a disclosure statement that provides material information
1424 regarding the issuer, including, but not limited to, all of the
1425 following information:
1426 (a) The issuer’s name, type of entity, and contact
1427 information.
1428 (b) The name and contact information of each director,
1429 officer, or other manager of the issuer.
1430 (c) A description of the issuer’s business.
1431 (d) A description of the security being offered.
1432 (e) The total amount of the offering.
1433 (f) The intended use of proceeds from the sale of the
1434 securities.
1435 (g) The target offering amount.
1436 (h) A statement that if the target offering amount is not
1437 obtained in cash or in the value of other tangible consideration
1438 received on a date that is no more than 180 days after the
1439 commencement of the offering, the offering will be terminated,
1440 and any funds or other consideration received from purchasers
1441 must be promptly returned.
1442 (i) A statement that the security being offered is not
1443 registered under federal or state securities laws and that the
1444 securities are subject to the limitation on resale contained in
1445 Securities and Exchange Commission Rule 147 or Rule 147A.
1446 (j) The names and addresses of all persons who will be
1447 involved in the offer and sale of securities on behalf of the
1448 issuer.
1449 (k) The name of the bank or other depository institution
1450 into which investor funds will be deposited.
1451 (l) The following statement in boldface, conspicuous type:
1452
1453 Neither the Securities and Exchange Commission nor any
1454 state securities commission has approved or
1455 disapproved these securities or determined that this
1456 disclosure statement is truthful or complete. Any
1457 representation to the contrary is a criminal offense.
1458
1459 (9) All funds received from investors must be deposited
1460 into a bank or depository institution authorized to do business
1461 in this state. The issuer may not withdraw any amount of the
1462 offering proceeds unless the target offering amount has been
1463 received.
1464 (10) The issuer must file a notice of the offering with the
1465 office, in writing or in electronic form, in a format prescribed
1466 by commission rule, no less than 5 business days before the
1467 offering commences, along with the disclosure statement
1468 described in subsection (8). If there are any material changes
1469 to the information previously submitted, the issuer, within 3
1470 business days after such material change, must file an amended
1471 notice.
1472 (11) An individual, entity, or entity employee who acts as
1473 an agent for the issuer in the offer or sale of securities and
1474 is not registered as a dealer under this chapter may not do
1475 either of the following:
1476 (a) Receive compensation based upon the solicitation of
1477 purchases, sales, or offers to purchase the securities.
1478 (b) Take custody of investor funds or securities.
1479 (12) Any sale made pursuant to the exemption created under
1480 this section is voidable by the purchaser within 3 days after
1481 the first tender of consideration is made by such purchaser to
1482 the issuer by notifying the issuer that the purchaser expressly
1483 voids the purchase. The purchaser’s notice to the issuer must be
1484 sent by e-mail to the issuer’s e-mail address set forth in the
1485 disclosure statement that is provided to a purchaser or the
1486 purchaser’s representative or by hand delivery, courier service,
1487 or other method by which written proof of delivery to the issuer
1488 of the purchaser’s election to rescind the purchase is
1489 evidenced.
1490 Section 6. Section 517.0613, Florida Statutes, is created
1491 to read:
1492 517.0613 Failure to comply with a securities registration
1493 exemption.—
1494 (1) Failure to meet the requirements for any exemption from
1495 securities registration does not preclude the issuer from
1496 claiming the availability of any other applicable state or
1497 federal exemption.
1498 (2) The exemptions created under ss. 517.061, 517.0611, and
1499 517.0612 are not available to an issuer for any transaction or
1500 series of transactions that, although in technical compliance
1501 with the applicable provisions, is part of a plan or scheme to
1502 evade the registration provisions of s. 517.07, and registration
1503 under s. 517.07 is required in connection with such
1504 transactions.
1505 Section 7. Section 517.0614, Florida Statutes, is created
1506 to read:
1507 517.0614 Integration of offerings.—
1508 (1) If the safe harbors in subsection (2) do not apply, in
1509 determining whether two or more offerings are to be treated as
1510 one for the purpose of registration or qualifying for an
1511 exemption from registration under this chapter, offers and sales
1512 may not be integrated if, based on the particular facts and
1513 circumstances, the issuer can establish either that each
1514 offering complies with the registration requirements of this
1515 chapter, or that an exemption from registration is available for
1516 the particular offering, provided that any transaction or series
1517 of transactions that, although in technical compliance with this
1518 chapter, is part of a plan or scheme to evade the registration
1519 requirements of this chapter will not have the effect of
1520 avoiding integration. In making this determination:
1521 (a) For an exempt offering prohibiting general
1522 solicitation, the issuer must have a reasonable belief, based on
1523 the facts and circumstances, with respect to each purchaser in
1524 the exempt offering prohibiting general solicitation, that the
1525 issuer or any person acting on the issuer’s behalf:
1526 1. Did not solicit such purchaser through the use of
1527 general solicitation; or
1528 2. Established a substantive relationship with such
1529 purchaser before the commencement of the exempt offering
1530 prohibiting general solicitation, provided that a purchaser
1531 previously solicited through the use of general solicitation is
1532 not deemed to have been solicited through the use of general
1533 solicitation in the current offering if, during the 45 calendar
1534 days following such previous general solicitation:
1535 a. No offer or sale of the same or similar class of
1536 securities has been made by or on behalf of the issuer,
1537 including to such purchaser; and
1538 b. The issuer or any person acting on the issuer’s behalf
1539 has not solicited such purchaser through the use of general
1540 solicitation for any other security.
1541 (b) For two or more concurrent exempt offerings permitting
1542 general solicitation, in addition to satisfying the requirements
1543 of the particular exemption relied on, general solicitation
1544 offering materials for one offering that includes information
1545 about the material terms of a concurrent offering under another
1546 exemption may constitute an offer of securities in such other
1547 offering, and therefore the offer must comply with all the
1548 requirements for, and restrictions on, offers under the
1549 exemption being relied on for such other offering, including any
1550 legend requirements and communications restrictions.
1551 (2) The integration analysis required by subsection (1) is
1552 not required if any of the following nonexclusive safe harbors
1553 apply:
1554 (a) An offering commenced more than 30 calendar days before
1555 the commencement of any other offering, or more than 30 calendar
1556 days after the termination or completion of any other offering,
1557 may not be integrated with such other offering, provided that
1558 for an exempt offering for which general solicitation is not
1559 permitted which follows by 30 calendar days or more an offering
1560 that allows general solicitation, paragraph (1)(a) applies.
1561 (b) Offers and sales made in compliance with any of the
1562 following provisions are not subject to integration with other
1563 offerings:
1564 1. Section 517.051 or s. 517.061, except s. 517.061(9),
1565 (10), or (11).
1566 2. Section 517.0611 or s. 517.0612.
1567 Section 8. Section 517.0615, Florida Statutes, is created
1568 to read:
1569 517.0615 Solicitations of interest.—
1570 (1) A communication may not be deemed to constitute general
1571 solicitation or general advertising if the communication is made
1572 in connection with a seminar or meeting in which more than one
1573 issuer participates and which is sponsored by a college, a
1574 university, or another institution of higher education; a state
1575 or local government or an instrumentality thereof; a nonprofit
1576 chamber of commerce or other nonprofit organization; or an angel
1577 investor group, incubator, or accelerator, if all of the
1578 following apply:
1579 (a) Advertising for the seminar or meeting does not
1580 reference a specific offering of securities by the issuer.
1581 (b) The sponsor of the seminar or meeting does not do any
1582 of the following:
1583 1. Make investment recommendations or provide investment
1584 advice to attendees of the seminar or meeting.
1585 2. Engage in any investment negotiations between the issuer
1586 and investors attending the seminar or meeting.
1587 3. Charge attendees of the seminar or meeting any fees,
1588 other than reasonable administrative fees.
1589 4. Receive any compensation for making introductions
1590 between seminar or meeting attendees and issuers or for
1591 investment negotiations between such parties.
1592 5. Receive any compensation with respect to the seminar or
1593 meeting, which compensation would require registration or
1594 notice-filing under this chapter, the Securities Exchange Act of
1595 1934, 15 U.S.C. ss. 78a et seq., as amended, or the Investment
1596 Advisers Act of 1940, 15 U.S.C. s. 80b-1 et seq., as amended.
1597 The sponsorship or participation in the seminar or meeting does
1598 not by itself require registration or notice-filing under this
1599 chapter.
1600 (c) The type of information regarding an offering of
1601 securities by the issuer which is communicated or distributed by
1602 or on behalf of the issuer in connection with the seminar or
1603 meeting is limited to a notification that the issuer is in the
1604 process of offering or planning to offer securities, the type
1605 and amount of securities being offered, the intended use of
1606 proceeds of the offering, and the unsubscribed amount in an
1607 offering.
1608 (d) If the event allows attendees to participate virtually,
1609 rather than in person, online participation in the event is
1610 limited to:
1611 1. Individuals that are members of, or otherwise associated
1612 with, the sponsor organization;
1613 2. Individuals that the sponsor reasonably believes are
1614 accredited investors; or
1615 3. Individuals that have been invited to the event by the
1616 sponsor based on industry or investment-related experience
1617 reasonably selected by the sponsor in good faith and disclosed
1618 in the public communications about the event.
1619 (2) Before any offers or sales are made in connection with
1620 an offering, communications by an issuer or any person
1621 authorized to act on behalf of the issuer are not deemed to
1622 constitute general solicitation or general advertising if the
1623 communication is solely for the purpose of determining whether
1624 there is any interest in a contemplated securities offering.
1625 Requirements imposed under this chapter on written or oral
1626 statements made in the course of such communication may be
1627 enforced as provided in this chapter. The solicitation or
1628 acceptance of money or other consideration or of any commitment,
1629 binding or otherwise, from any person is prohibited.
1630 (a) The communication must state all of the following:
1631 1. Money or other consideration is not being solicited and,
1632 if sent in response, will not be accepted.
1633 2. Any offer to buy the securities will not be accepted,
1634 and no part of the purchase price will be accepted.
1635 3. A person’s indication of interest does not involve
1636 obligation or commitment of any kind.
1637 (b) Any written communication under this subsection may
1638 include a means by which a person may indicate to the issuer
1639 that the person is interested in a potential offering. The
1640 issuer may require the name, address, telephone number, or e
1641 mail address in any response form included in the written
1642 communication under this paragraph.
1643 (c) A communication in accordance with this subsection is
1644 not subject to s. 501.059, regarding telephone solicitations.
1645 Section 9. Section 517.0616, Florida Statutes, is created
1646 to read:
1647 517.0616 Disqualification.—A registration exemption under
1648 s. 517.061(9), (10), and (11), s. 517.0611, or s. 517.0612 is
1649 not available to an issuer that would be disqualified under
1650 Securities and Exchange Commission Rule 506(d), 17 C.F.R. s.
1651 230.506(d), as amended, at the time the issuer makes an offer
1652 for the sale of a security.
1653 Section 10. Present subsections (4) through (8) of section
1654 517.081, Florida Statutes, are redesignated as subsections (6)
1655 through (10), respectively, new subsections (4) and (5) are
1656 added to that section, and subsection (2), paragraph (g) of
1657 subsection (3), and present subsection (7) of that section are
1658 amended, to read:
1659 517.081 Registration procedure.—
1660 (2) The office shall receive and act upon applications for
1661 the registration of to have securities registered, and the
1662 commission may prescribe forms on which it may require such
1663 applications to be submitted. Applications must shall be duly
1664 signed by the applicant, sworn to by any person having knowledge
1665 of the facts, and filed with the office. The commission may
1666 establish, by rule, procedures for depositing fees and filing
1667 documents by electronic means provided such procedures provide
1668 the office with the information and data required by this
1669 section. An application may be made either by the issuer of the
1670 securities for which registration is applied or by any
1671 registered dealer desiring to sell such securities the same
1672 within the state.
1673 (3) The office may require the applicant to submit to the
1674 office the following information concerning the issuer and such
1675 other relevant information as the office may in its judgment
1676 deem necessary to enable it to ascertain whether such securities
1677 shall be registered pursuant to the provisions of this section:
1678 (g)1. A specimen copy of the securities certificate, if
1679 applicable, and a copy of any circular, prospectus,
1680 advertisement, or other description of such securities.
1681 2. The commission shall adopt a form for a simplified
1682 offering circular to register, under this section, securities
1683 that are sold in offerings in which the aggregate offering price
1684 in any consecutive 12-month period does not exceed the amount
1685 provided in s. 3(b) of the Securities Act of 1933, as amended.
1686 The following issuers shall not be eligible to submit a
1687 simplified offering circular adopted pursuant to this
1688 subparagraph:
1689 a. An issuer seeking to register securities for resale by
1690 persons other than the issuer.
1691 b. An issuer that is subject to any of the
1692 disqualifications described in 17 C.F.R. s. 230.262, adopted
1693 pursuant to the Securities Act of 1933, as amended, or that has
1694 been or is engaged or is about to engage in an activity that
1695 would be grounds for denial, revocation, or suspension under s.
1696 517.111. For purposes of this subparagraph, an issuer includes
1697 an issuer’s director, officer, general partner, manager or
1698 managing member, trustee, or equity owner who owns at least 10
1699 percent of the ownership interests of the issuer, promoter, or
1700 selling agent of the securities to be offered or any officer,
1701 director, partner, or manager or managing member of such selling
1702 agent.
1703 c. An issuer that is a development-stage company that
1704 either has no specific business plan or purpose or has indicated
1705 that its business plan is to merge with an unidentified company
1706 or companies.
1707 d. An issuer of offerings in which the specific business or
1708 properties cannot be described.
1709 e. Any issuer the office determines is ineligible because
1710 the form does not provide full and fair disclosure of material
1711 information for the type of offering to be registered by the
1712 issuer.
1713 f. Any issuer that has failed to provide the office the
1714 reports required for a previous offering registered pursuant to
1715 this subparagraph.
1716
1717 As a condition precedent to qualifying for use of the simplified
1718 offering circular, an issuer shall agree to provide the office
1719 with an annual financial report containing a balance sheet as of
1720 the end of the issuer’s fiscal year and a statement of income
1721 for such year, prepared in accordance with United States
1722 generally accepted accounting principles and accompanied by an
1723 independent accountant’s report. If the issuer has more than 100
1724 security holders at the end of a fiscal year, the financial
1725 statements must be audited. Annual financial reports must be
1726 filed with the office within 90 days after the close of the
1727 issuer’s fiscal year for each of the first 5 years following the
1728 effective date of the registration.
1729 (4) The commission may, by rule:
1730 (a) Establish criteria relating to the issuance of equity
1731 securities, debt securities, insurance company securities, real
1732 estate investment trusts, oil and gas investments, and other
1733 investments. In establishing these criteria, the commission may
1734 consider the rules and regulations of the Securities and
1735 Exchange Commission and statements of policy by the North
1736 American Securities Administrators Association, Inc., relating
1737 to the registration of securities offerings. The criteria must
1738 include all of the following:
1739 1. The promoter’s equity investment ratio.
1740 2. The financial condition of the issuer.
1741 3. The voting rights of shareholders.
1742 4. The grant of options or warrants to underwriters and
1743 others.
1744 5. Loans and other transactions with affiliates of the
1745 issuer.
1746 6. The use, escrow, or refund of proceeds of the offering.
1747 (b) Prescribe forms requiring applications for the
1748 registration of securities to be submitted to the office,
1749 including a simplified offering circular to register, under this
1750 section, securities that are sold in offerings in which the
1751 aggregate offering price in any consecutive 12-month period does
1752 not exceed the amount provided in s. 3(b) of the Securities Act
1753 of 1933, as amended.
1754 (c) Establish procedures for depositing fees and filing
1755 documents by electronic means, provided that such procedures
1756 provide the office with the information and data required by
1757 this section.
1758 (d) Establish requirements and standards for the filing,
1759 content, and circulation of a preliminary, final, or amended
1760 prospectus, advertisements, and other sales literature. In
1761 establishing such requirements and standards, the commission
1762 shall consider the rules and regulations of the Securities and
1763 Exchange Commission relating to requirements for preliminary,
1764 final, or amended or supplemented prospectuses and the rules of
1765 the Financial Industry Regulatory Authority relating to
1766 advertisements and sales literature.
1767 (5) All of the following issuers are not eligible to submit
1768 a simplified offering circular:
1769 (a) An issuer that is subject to any of the
1770 disqualifications described in Securities and Exchange
1771 Commission Rule 262, 17 C.F.R. s. 230.262, as amended, or that
1772 has been or is engaged or is about to engage in an activity that
1773 would be grounds for denial, revocation, or suspension under s.
1774 517.111. For purposes of this paragraph, an issuer includes an
1775 issuer’s director, officer, general partner, manager or managing
1776 member, trustee, or a person owning at least 10 percent of the
1777 ownership interests of the issuer; a promoter or selling agent
1778 of the securities to be offered; or any officer, director,
1779 partner, or manager or managing member of such selling agent.
1780 (b) An issuer that is a development-stage company that
1781 either has no specific business plan or purpose or has indicated
1782 that its business plan is to merge with an unidentified business
1783 entity or entities.
1784 (c) An issuer of offerings in which the specific business
1785 or properties cannot be described.
1786 (d) An issuer that the office determines is ineligible
1787 because the simplified circular does not provide full and fair
1788 disclosure of material information for the type of offering to
1789 be registered by the issuer.
1790 (9)(a)(7) The office shall record the registration of a
1791 security in the register of securities if, upon examination of
1792 an any application, it finds that all of the following
1793 requirements are met: the office
1794 1. The application is complete.
1795 2. The fee imposed in subsection (8) has been paid.
1796 3. The sale of the security would not be fraudulent and
1797 would not work or tend to work a fraud upon the purchaser.
1798 4. The terms of the sale of such securities would be fair,
1799 just, and equitable.
1800 5. The enterprise or business of the issuer is not based
1801 upon unsound business principles.
1802 (b) Upon registration, the security may be sold by the
1803 issuer or any registered dealer, subject, however, to the
1804 further order of the office shall find that the sale of the
1805 security referred to therein would not be fraudulent and would
1806 not work or tend to work a fraud upon the purchaser, that the
1807 terms of the sale of such securities would be fair, just, and
1808 equitable, and that the enterprise or business of the issuer is
1809 not based upon unsound business principles, it shall record the
1810 registration of such security in the register of securities; and
1811 thereupon such security so registered may be sold by any
1812 registered dealer, subject, however, to the further order of the
1813 office. In order to determine if an offering is fair, just, and
1814 equitable, the commission may by rule establish requirements and
1815 standards for the filing, content, and circulation of any
1816 preliminary, final, or amended prospectus and other sales
1817 literature and may by rule establish merit qualification
1818 criteria relating to the issuance of equity securities, debt
1819 securities, insurance company securities, real estate investment
1820 trusts, and other traditional and nontraditional investments,
1821 including, but not limited to, oil and gas investments. The
1822 criteria may include such elements as the promoter’s equity
1823 investment ratio, the financial condition of the issuer, the
1824 voting rights of shareholders, the grant of options or warrants
1825 to underwriters and others, loans and other affiliated
1826 transaction, the use or refund of proceeds of the offering, and
1827 such other relevant criteria as the office in its judgment may
1828 deem necessary to such determination.
1829 Section 11. Subsection (2) of section 517.101, Florida
1830 Statutes, is amended to read:
1831 517.101 Consent to service.—
1832 (2) Any such action must shall be brought either in the
1833 county of the plaintiff’s residence or in the county in which
1834 the office has its official headquarters. The written consent
1835 must shall be authenticated by the seal of the said issuer, if
1836 it has a seal, and by the acknowledged signature of a director,
1837 manager, managing member, general partner, trustee, or officer
1838 of the issuer member of the copartnership or company, or by the
1839 acknowledged signature of any officer of the incorporated or
1840 unincorporated association, if it be an incorporated or
1841 unincorporated association, duly authorized by resolution of the
1842 board of directors, trustees, or managers of the corporation or
1843 association, and must shall in such case be accompanied by a
1844 duly certified copy of the resolution of the issuer’s board of
1845 directors, trustees, managers, managing members, or general
1846 partners or managers of the corporation or association,
1847 authorizing the signer to execute the consent officers to
1848 execute the same. In case any process or pleadings mentioned in
1849 this chapter are served upon the office, service must it shall
1850 be by duplicate copies, one of which must shall be filed in the
1851 office and the other another immediately forwarded by the office
1852 by registered mail to the principal office of the issuer against
1853 which the said process or pleadings are directed.
1854 Section 12. Section 517.131, Florida Statutes, is amended
1855 to read:
1856 517.131 Securities Guaranty Fund.—
1857 (1) As used in this section, the term “final judgment”
1858 includes an arbitration award confirmed by a court of competent
1859 jurisdiction.
1860 (2)(a) The Chief Financial Officer shall establish a
1861 Securities Guaranty Fund to provide monetary relief to victims
1862 of securities violations under this chapter who are entitled to
1863 monetary damages or restitution and cannot recover the full
1864 amount of such monetary damages or restitution from the
1865 wrongdoer. An amount not exceeding 20 percent of all revenues
1866 received as assessment fees pursuant to s. 517.12(9) and (10)
1867 for dealers and investment advisers or s. 517.1201 for federal
1868 covered advisers and an amount not exceeding 10 percent of all
1869 revenues received as assessment fees pursuant to s. 517.12(9)
1870 and (10) for associated persons must shall be part of the
1871 regular registration license fee and must shall be transferred
1872 to or deposited in the Securities Guaranty Fund.
1873 (b) If the balance in the Securities Guaranty Fund at any
1874 time exceeds $1.5 million, transfer of assessment fees to the
1875 this fund must shall be discontinued at the end of that
1876 registration license year, and transfer of such assessment fees
1877 may shall not resume be resumed unless the fund balance is
1878 reduced below $1 million by disbursement made in accordance with
1879 s. 517.141.
1880 (2) The Securities Guaranty Fund shall be disbursed as
1881 provided in s. 517.141 to a person who is adjudged by a court of
1882 competent jurisdiction to have suffered monetary damages as a
1883 result of any of the following acts committed by a dealer,
1884 investment adviser, or associated person who was licensed under
1885 this chapter at the time the act was committed:
1886 (a) A violation of s. 517.07.
1887 (b) A violation of s. 517.301.
1888 (3) A Any person is eligible for payment to seek recovery
1889 from the Securities Guaranty Fund if the person:
1890 (a)1. Holds an unsatisfied final judgment in which a
1891 wrongdoer was found to have violated s. 517.07 or s. 517.301;
1892 2. Has applied any amount recovered from the judgment
1893 debtor or any other source to the damages awarded by the court
1894 or arbitrator;
1895 3. Is a natural person who was a resident of this state, or
1896 is a business entity that was domiciled in this state, at the
1897 time of the violation of s. 517.07 or s. 517.301; and
1898 4. Is seeking recovery for an act that occurred on or after
1899 October 1, 2024; or
1900 (b) Is a receiver appointed pursuant to s. 517.191(2) by a
1901 court of competent jurisdiction for a wrongdoer ordered to pay
1902 restitution under s. 517.191(3) as a result of a violation of s.
1903 517.07 or s. 517.301 which has requested payment from the
1904 Securities Guaranty Fund on behalf of a person eligible for
1905 payment under paragraph (a)
1906 (a) Such person has received final judgment in a court of
1907 competent jurisdiction in any action wherein the cause of action
1908 was based on a violation of those sections referred to in
1909 subsection (2).
1910 (b) Such person has made all reasonable searches and
1911 inquiries to ascertain whether the judgment debtor possesses
1912 real or personal property or other assets subject to being sold
1913 or applied in satisfaction of the judgment, and by her or his
1914 search the person has discovered no property or assets; or she
1915 or he has discovered property and assets and has taken all
1916 necessary action and proceedings for the application thereof to
1917 the judgment, but the amount thereby realized was insufficient
1918 to satisfy the judgment. To verify compliance with such
1919 condition, the office may require such person to have a writ of
1920 execution be issued upon such judgment, may require a showing
1921 that no personal or real property of the judgment debtor liable
1922 to be levied upon in complete satisfaction of the judgment can
1923 be found, or may require an affidavit from the claimant setting
1924 forth the reasonable searches and inquiries undertaken and the
1925 result of those searches and inquiries.
1926 (c) Such person has applied any amounts recovered from the
1927 judgment debtor, or from any other source, to the damages
1928 awarded by the court.
1929 (d) The act for which recovery is sought occurred on or
1930 after January 1, 1979.
1931 (e) The office waives compliance with the requirements of
1932 paragraph (a) or paragraph (b). The office may waive such
1933 compliance if the dealer, investment adviser, or associated
1934 person which is the subject of the claim filed with the office
1935 is the subject of any proceeding in which a receiver has been
1936 appointed by a court of competent jurisdiction. If the office
1937 waives such compliance, the office may, upon petition by the
1938 debtor or the court-appointed trustee, examiner, or receiver,
1939 distribute funds from the Securities Guaranty Fund up to the
1940 amount allowed under s. 517.141. Any waiver granted pursuant to
1941 this section shall be considered a judgment for purposes of
1942 complying with the requirements of this section and of s.
1943 517.141.
1944 (4) A person who has done any of the following is not
1945 eligible for payment from the Securities Guaranty Fund:
1946 (a) Participated or assisted in a violation of this
1947 chapter.
1948 (b) Attempted to commit or committed a violation of this
1949 chapter.
1950 (c) Profited from a violation of this chapter.
1951 (5) An eligible person, or a receiver on behalf of the
1952 eligible person, seeking payment from the Securities Guaranty
1953 Fund must file with the office a written application on a form
1954 that the commission may prescribe by rule. The commission may
1955 adopt by rule procedures for filing documents by electronic
1956 means, provided that such procedures provide the office with the
1957 information and data required by this section. The application
1958 must be filed with the office within 1 year after the date of
1959 the final judgment, the date on which a restitution order has
1960 been ripe for execution, or the date of any appellate decision
1961 thereon, and, at minimum, must contain all of the following
1962 information:
1963 (a) The eligible person’s and, if applicable, the
1964 receiver’s full name, address, and contact information.
1965 (b) The person ordered to pay restitution.
1966 (c) If the eligible person is a business entity, the
1967 eligible person’s type and place of organization and, as
1968 applicable, a copy, as amended, of its articles of
1969 incorporation, articles of organization, trust agreement, or
1970 partnership agreement.
1971 (d) Any final judgment and a copy thereof.
1972 (e) Any restitution order pursuant to s. 517.191(3), and a
1973 copy thereof.
1974 (f) An affidavit from the eligible person stating either
1975 one of the following:
1976 1. That the eligible person has made all reasonable
1977 searches and inquiries to ascertain whether the judgment debtor
1978 possesses real or personal property or other assets subject to
1979 being sold or applied in satisfaction of the final judgment and,
1980 by the eligible person’s search, that the eligible person has
1981 not discovered any property or assets.
1982 2. That the eligible person has taken necessary action on
1983 the property and assets of the wrongdoers but the final judgment
1984 remains unsatisfied.
1985 (g) If the application is filed by the receiver, an
1986 affidavit from the receiver stating the amount of restitution
1987 owed to the eligible person on whose behalf the claim is filed;
1988 the amount of any money, property, or assets paid to the
1989 eligible person on whose behalf the claim is filed by the person
1990 over whom the receiver is appointed; and the amount of any
1991 unsatisfied portion of any eligible person’s order of
1992 restitution.
1993 (h) The eligible person’s residence or domicile at the time
1994 of the violation of s. 517.07 or s. 517.301 which resulted in
1995 the eligible person’s monetary damages.
1996 (i) The amount of any unsatisfied portion of the eligible
1997 person’s final judgment.
1998 (j) Whether an appeal or motion to vacate an arbitration
1999 award has been filed.
2000 (6) If the office finds that a person is eligible for
2001 payment from the Securities Guaranty Fund and if the person has
2002 complied with this section and the rules adopted under this
2003 section, the office must approve payment to such person from the
2004 fund. Within 90 days after the office’s receipt of a complete
2005 application, each eligible person or receiver must be given
2006 written notice, personally or by mail, that the office intends
2007 to approve or deny, or has approved or denied, the application
2008 for payment from the Securities Guaranty Fund.
2009 (7) Upon receipt by the eligible person or receiver of
2010 notice of the office’s decision that the eligible person’s or
2011 receiver’s application for payment from the Securities Guaranty
2012 Fund is approved, and before any disbursement, the eligible
2013 person shall assign to the office on a form prescribed by
2014 commission rule all right, title, and interest in the final
2015 judgment or order of restitution equal to the amount of such
2016 payment.
2017 (8) The office shall deem an application for payment from
2018 the Securities Guaranty Fund abandoned if the eligible person or
2019 receiver, or any person acting on behalf of the eligible person
2020 or receiver, fails to timely complete the application as
2021 prescribed by commission rule. The time period to complete an
2022 application must be tolled during the pendency of an appeal or
2023 motion to vacate an arbitration award.
2024 (4) Any person who files an action that may result in the
2025 disbursement of funds from the Securities Guaranty Fund pursuant
2026 to the provisions of s. 517.141 shall give written notice by
2027 certified mail to the office as soon as practicable after such
2028 action has been filed. The failure to give such notice shall not
2029 bar a payment from the Securities Guaranty Fund if all of the
2030 conditions specified in subsection (3) are satisfied.
2031 (5) The commission may adopt rules pursuant to ss.
2032 120.536(1) and 120.54 specifying the procedures for complying
2033 with subsections (2), (3), and (4), including rules for the form
2034 of submission and guidelines for the sufficiency and content of
2035 submissions of notices and claims.
2036 Section 13. Section 517.141, Florida Statutes, is amended
2037 to read:
2038 517.141 Payment from the fund.—
2039 (1) As used in this section, the term:
2040 (a) “Claimant” means a person determined eligible for
2041 payment under s. 517.131 that is approved by the office for
2042 payment from the Securities Guaranty Fund.
2043 (b) “Final judgment” includes an arbitration award
2044 confirmed by a court of competent jurisdiction.
2045 (c) “Specified adult” has the same meaning as in s.
2046 517.34(1).
2047 (2) A claimant is entitled to disbursement from the
2048 Securities Guaranty Fund in the amount equal to the lesser of:
2049 (a) The unsatisfied portion of the claimant’s final
2050 judgment or final order of restitution, but only to the extent
2051 that the final judgment or final order of restitution reflects
2052 actual or compensatory damages, excluding postjudgment interest,
2053 costs, and attorney fees; or
2054 (b)1. The sum of $15,000; or
2055 2. If the claimant is a specified adult or if a specified
2056 adult is a beneficial owner or beneficiary of the claimant, the
2057 sum of $25,000 Any person who meets all of the conditions
2058 prescribed in s. 517.131 may apply to the office for payment to
2059 be made to such person from the Securities Guaranty Fund in the
2060 amount equal to the unsatisfied portion of such person’s
2061 judgment or $10,000, whichever is less, but only to the extent
2062 and amount reflected in the judgment as being actual or
2063 compensatory damages, excluding postjudgment interest, costs,
2064 and attorney’s fees.
2065 (3)(2) Regardless of the number of claims or claimants
2066 involved, payments for claims are shall be limited in the
2067 aggregate to $250,000 $100,000 against any one dealer,
2068 investment adviser, or associated person. If the total claim
2069 filed by a receiver on behalf of multiple claimants exceeds
2070 claims exceed the aggregate limit of $250,000 $100,000, the
2071 office must shall prorate the payment to each claimant based
2072 upon the ratio that each claimant’s individual the person’s
2073 claim bears to the total claim claims filed.
2074 (4) If at any time the balance in the Securities Guaranty
2075 Fund is insufficient to satisfy a valid claim or portion of a
2076 valid claim approved by the office, the office must satisfy the
2077 unpaid claim or portion of the valid claim as soon as a
2078 sufficient amount of money has been deposited into or
2079 transferred to the Securities Guaranty Fund. If more than one
2080 unsatisfied claim is outstanding, the claims must be paid in the
2081 sequence in which the claims were approved by final order of the
2082 office, which final order is not subject to an appeal or other
2083 pending proceeding.
2084 (5) All payments and disbursements made from the Securities
2085 Guaranty Fund must be made by the Chief Financial Officer, or
2086 his or her designee, upon authorization by the office. The
2087 office shall submit such authorization within 30 days after the
2088 approval of an eligible person for payment from the Securities
2089 Guaranty Fund
2090 (3) No payment shall be made on any claim against any one
2091 dealer, investment adviser, or associated person before the
2092 expiration of 2 years from the date any claimant is found by the
2093 office to be eligible for recovery pursuant to this section. If
2094 during this 2-year period more than one claim is filed against
2095 the same dealer, investment adviser, or associated person, or if
2096 the office receives notice pursuant to s. 517.131(4) that an
2097 action against the same dealer, investment adviser, or
2098 associated person is pending, all such claims and notices of
2099 pending claims received during this period against the same
2100 dealer, investment adviser, or associated person may be handled
2101 by the office as provided in this section. Two years after the
2102 first claimant against that same dealer, investment adviser, or
2103 associated person applies for payment pursuant to this section:
2104 (a) The office shall determine those persons eligible for
2105 payment or for potential payment in the event of a pending
2106 action. All such persons may be entitled to receive their pro
2107 rata shares of the fund as provided in this section.
2108 (b) Those persons who meet all the conditions prescribed in
2109 s. 517.131 and who have applied for payment pursuant to this
2110 section will be entitled to receive their pro rata shares of the
2111 total disbursement.
2112 (c) Those persons who have filed notice with the office of
2113 a pending claim pursuant to s. 517.131(4) but who are not yet
2114 eligible for payment from the fund will be entitled to receive
2115 their pro rata shares of the total disbursement once they have
2116 complied with subsection (1). However, in the event that the
2117 amounts they are eligible to receive pursuant to subsection (1)
2118 are less than their pro rata shares as determined under this
2119 section, any excess shall be distributed pro rata to those
2120 persons entitled to disbursement under this subsection whose pro
2121 rata shares of the total disbursement were less than the amounts
2122 of their claims.
2123 (6)(4) Individual claims filed by persons owning the same
2124 joint account, or claims arising stemming from any other type of
2125 account maintained by a particular licensee on which more than
2126 one name appears, must shall be treated as the claims of one
2127 eligible claimant with respect to payment from the Securities
2128 Guaranty Fund. If a claimant who has obtained a final judgment
2129 or final order of restitution that which qualifies for
2130 disbursement under s. 517.131 has maintained more than one
2131 account with the dealer, investment adviser, or associated
2132 person who is the subject of the claims, for purposes of
2133 disbursement of the Securities Guaranty Fund, all such accounts,
2134 whether joint or individual, must shall be considered as one
2135 account and shall entitle such claimant to only one distribution
2136 from the fund not to exceed the lesser of $10,000 or the
2137 unsatisfied portion of such claimant’s judgment as provided in
2138 subsection (1). To the extent that a claimant obtains more than
2139 one final judgment or final order of restitution against a
2140 person dealer, investment adviser, or one or more associated
2141 persons arising out of the same transactions, occurrences, or
2142 conduct or out of such the dealer’s, investment adviser’s, or
2143 associated person’s handling of the claimant’s account, the
2144 final such judgments or final orders of restitution must shall
2145 be consolidated for purposes of this section and shall entitle
2146 the claimant to only one disbursement from the fund not to
2147 exceed the lesser of $10,000 or the unsatisfied portion of such
2148 claimant’s judgment as provided in subsection (1).
2149 (7)(5) If the final judgment or final order of restitution
2150 that gave rise to the claim is overturned in any appeal or in
2151 any collateral proceeding, the claimant must shall reimburse the
2152 Securities Guaranty Fund all amounts paid from the fund to the
2153 claimant on the claim. If the claimant satisfies the final
2154 judgment or final order of restitution specified in s.
2155 517.131(3)(a), the claimant must shall reimburse the Securities
2156 Guaranty Fund all amounts paid from the fund to the claimant on
2157 the claim. Such reimbursement must shall be paid to the
2158 Department of Financial Services office within 60 days after the
2159 final resolution of the appellate or collateral proceedings or
2160 the satisfaction of the final judgment or order of restitution,
2161 with the 60-day period commencing on the date the final order or
2162 decision is entered in such proceedings.
2163 (8)(6) If a claimant receives payments in excess of that
2164 which is permitted under this chapter, the claimant must shall
2165 reimburse the Securities Guaranty Fund such excess within 60
2166 days after the claimant receives such excess payment or after
2167 the payment is determined to be in excess of that permitted by
2168 law, whichever is later.
2169 (9) A claimant who knowingly and willfully files or causes
2170 to be filed an application under s. 517.131 or documents
2171 supporting the application, any of which contain false,
2172 incomplete, or misleading information in any material aspect,
2173 forfeits all payments from the Securities Guaranty Fund and
2174 commits a violation of s. 517.301(1)(c).
2175 (10)(7) The Department of Financial Services office may
2176 institute legal proceedings to enforce compliance with this
2177 section and with s. 517.131 to recover moneys owed to the
2178 Securities Guaranty Fund, and is shall be entitled to recover
2179 interest, costs, and attorney attorney’s fees in any action
2180 brought pursuant to this section in which the department office
2181 prevails.
2182 (8) If at any time the money in the Securities Guaranty
2183 Fund is insufficient to satisfy any valid claim or portion of a
2184 valid claim approved by the office, the office shall satisfy
2185 such unpaid claim or portion of such valid claim as soon as a
2186 sufficient amount of money has been deposited in or transferred
2187 to the fund. When there is more than one unsatisfied claim
2188 outstanding, such claims shall be paid in the order in which the
2189 claims were approved by final order of the office, which order
2190 is not subject to an appeal or other pending proceeding.
2191 (9) Upon receipt by the claimant of the payment from the
2192 Securities Guaranty Fund, the claimant shall assign any
2193 additional right, title, and interest in the judgment, to the
2194 extent of such payment, to the office. If the provisions of s.
2195 517.131(3)(e) apply, the claimant must assign to the office any
2196 right, title, and interest in the debt to the extent of any
2197 payment by the office from the Securities Guaranty Fund.
2198 (10) All payments and disbursements made from the
2199 Securities Guaranty Fund shall be made by the Chief Financial
2200 Officer upon authorization signed by the director of the office,
2201 or such agent as she or he may designate.
2202 Section 14. Section 517.191, Florida Statutes, is amended
2203 to read:
2204 517.191 Enforcement by the Office of Financial Regulation
2205 Injunction to restrain violations; civil penalties; enforcement
2206 by Attorney General.—
2207 (1) When it appears to the office, either upon complaint or
2208 otherwise, that a person has engaged or is about to engage in
2209 any act or practice constituting a violation of this chapter or
2210 a rule or order hereunder, the office may investigate; and
2211 whenever it shall believe from evidence satisfactory to it that
2212 any such person has engaged, is engaged, or is about to engage
2213 in any act or practice constituting a violation of this chapter
2214 or a rule or order hereunder, the office may, in addition to any
2215 other remedies, bring action in the name and on behalf of the
2216 state against such person and any other person concerned in or
2217 in any way participating in or about to participate in such
2218 practices or engaging therein or doing any act or acts in
2219 furtherance thereof or in violation of this chapter to enjoin
2220 such person or persons from continuing such fraudulent practices
2221 or engaging therein or doing any act or acts in furtherance
2222 thereof or in violation of this chapter. In any such court
2223 proceedings, the office may apply for, and on due showing be
2224 entitled to have issued, the court’s subpoena requiring
2225 forthwith the appearance of any defendant and her or his
2226 employees, associated persons, or agents and the production of
2227 documents, books, and records that may appear necessary for the
2228 hearing of such petition, to testify or give evidence concerning
2229 the acts or conduct or things complained of in such application
2230 for injunction. In such action, the equity courts shall have
2231 jurisdiction of the subject matter, and a judgment may be
2232 entered awarding such injunction as may be proper.
2233 (2) In addition to all other means provided by law for the
2234 enforcement of any temporary restraining order, temporary
2235 injunction, or permanent injunction issued in any such court
2236 proceedings, the court shall have the power and jurisdiction,
2237 upon application of the office, to impound and to appoint a
2238 receiver or administrator for the property, assets, and business
2239 of the defendant, including, but not limited to, the books,
2240 records, documents, and papers appertaining thereto. Such
2241 receiver or administrator, when appointed and qualified, shall
2242 have all powers and duties as to custody, collection,
2243 administration, winding up, and liquidation of such said
2244 property and business as may shall from time to time be
2245 conferred upon her or him by the court. In any such action, the
2246 court may issue orders and decrees staying all pending suits and
2247 enjoining any further suits affecting the receiver’s or
2248 administrator’s custody or possession of such the said property,
2249 assets, and business or, in its discretion, may with the consent
2250 of the presiding judge of the circuit require that all such
2251 suits be assigned to the circuit court judge appointing such the
2252 said receiver or administrator.
2253 (3) In addition to, or in lieu of, any other remedies
2254 provided by this chapter, the office may apply to the court
2255 hearing the this matter for an order directing the defendant to
2256 make restitution of those sums shown by the office to have been
2257 obtained in violation of any of the provisions of this chapter.
2258 The office has standing to request such restitution on behalf of
2259 victims in cases brought by the office under this chapter,
2260 regardless of the appointment of an administrator or receiver
2261 under subsection (2) or an injunction under subsection (1).
2262 Further, such restitution must shall, at the option of the
2263 court, be payable to the administrator or receiver appointed
2264 pursuant to this section or directly to the persons whose assets
2265 were obtained in violation of this chapter.
2266 (4) In addition to any other remedies provided by this
2267 chapter, the office may apply to the court hearing the matter
2268 for, and the court has shall have jurisdiction to impose, a
2269 civil penalty against any person found to have violated any
2270 provision of this chapter, any rule or order adopted by the
2271 commission or the office, or any written agreement entered into
2272 with the office in an amount not to exceed any of the following:
2273 (a) The greater of $20,000 $10,000 for a natural person or
2274 $25,000 for a business entity any other person, or the gross
2275 amount of any pecuniary loss to investors or pecuniary gain to a
2276 natural person or business entity such defendant for each such
2277 violation, other than a violation of s. 517.301, plus the
2278 greater of $50,000 for a natural person or $250,000 for a
2279 business entity any other person, or the gross amount of any
2280 pecuniary loss to investors or pecuniary gain to a natural
2281 person or business entity such defendant for each violation of
2282 s. 517.301.
2283 (b) Twice the amount of the civil penalty that would
2284 otherwise be imposed under this subsection if a specified adult,
2285 as defined in s. 517.34(1), is the victim of a violation of this
2286 chapter.
2287
2288 All civil penalties collected pursuant to this subsection must
2289 shall be deposited into the Anti-Fraud Trust Fund. The office
2290 may recover any costs and attorney fees related to its
2291 investigation or enforcement of this section. Notwithstanding
2292 any other law, such moneys recovered by the office must be
2293 deposited into the Anti-Fraud Trust Fund.
2294 (5) For purposes of any action brought by the office under
2295 this section, a control person who controls any person found to
2296 have violated this chapter or any rule adopted thereunder is
2297 jointly and severally liable with, and to the same extent as,
2298 the controlled person in any action brought by the office under
2299 this section unless the control person can establish by a
2300 preponderance of the evidence that he or she acted in good faith
2301 and did not directly or indirectly induce the act that
2302 constitutes the violation or cause of action.
2303 (6) For purposes of any action brought by the office under
2304 this section, a person who knowingly or recklessly provides
2305 substantial assistance to another person in violation of this
2306 chapter or any rule adopted thereunder is deemed to violate this
2307 chapter or the rule to the same extent as the person to whom
2308 such assistance is provided.
2309 (7) The office may issue and serve upon a person a cease
2310 and desist order if the office has reason to believe that the
2311 person violates, has violated, or is about to violate this
2312 chapter, any commission or office rule or order, or any written
2313 agreement entered into with the office.
2314 (8) If the office finds that any conduct described in
2315 subsection (7) presents an immediate danger to the public,
2316 requiring an immediate final order, the office may issue an
2317 emergency cease and desist order reciting with particularity the
2318 facts underlying such findings. The emergency cease and desist
2319 order is effective immediately upon service of a copy of the
2320 order on the respondent named in the order and remains effective
2321 for 90 days after issuance. If the office begins nonemergency
2322 cease and desist proceedings under subsection (7), the emergency
2323 cease and desist order remains effective until the conclusion of
2324 the proceedings under ss. 120.569 and 120.57.
2325 (9) The office may impose and collect an administrative
2326 fine against any person found to have violated any provision of
2327 this chapter, any rule or order adopted by the commission or
2328 office, or any written agreement entered into with the office in
2329 an amount not to exceed the penalties provided in subsection
2330 (4). All fines collected under this subsection must be deposited
2331 into the Anti-Fraud Trust Fund.
2332 (10) The office may bar, permanently or for a specific
2333 period of time, any person found to have violated this chapter,
2334 any rule or order adopted by the commission or office, or any
2335 written agreement entered into with the office from submitting
2336 an application or notification for a license or registration
2337 with the office.
2338 (11) In addition to all other means provided by law for
2339 enforcing any of the provisions of this chapter, when the
2340 Attorney General, upon complaint or otherwise, has reason to
2341 believe that a person has engaged or is engaged in any act or
2342 practice constituting a violation of s. 517.275 or, s. 517.301,
2343 s. 517.311, or s. 517.312, or any rule or order issued under
2344 such sections, the Attorney General may investigate and bring an
2345 action to enforce these provisions as provided in ss. 517.171,
2346 517.201, and 517.2015 after receiving written approval from the
2347 office. Such an action may be brought against such person and
2348 any other person in any way participating in such act or
2349 practice or engaging in such act or practice or doing any act in
2350 furtherance of such act or practice, to obtain injunctive
2351 relief, restitution, civil penalties, and any remedies provided
2352 for in this section. The Attorney General may recover any costs
2353 and attorney fees related to the Attorney General’s
2354 investigation or enforcement of this section. Notwithstanding
2355 any other provision of law, moneys recovered by the Attorney
2356 General for costs, attorney fees, and civil penalties for a
2357 violation of s. 517.275 or, s. 517.301, s. 517.311, or s.
2358 517.312, or any rule or order issued pursuant to such sections,
2359 must shall be deposited in the Legal Affairs Revolving Trust
2360 Fund. The Legal Affairs Revolving Trust Fund may be used to
2361 investigate and enforce this section.
2362 (12)(6) This section does not limit the authority of the
2363 office to bring an administrative action against any person that
2364 is the subject of a civil action brought pursuant to this
2365 section or limit the authority of the office to engage in
2366 investigations or enforcement actions with the Attorney General.
2367 However, a person may not be subject to both a civil penalty
2368 under subsection (4) and an administrative fine under subsection
2369 (9) s. 517.221(3) as the result of the same facts.
2370 (13)(7) Notwithstanding s. 95.11(4)(f), an enforcement
2371 action brought under this section based on a violation of any
2372 provision of this chapter or any rule or order issued under this
2373 chapter shall be brought within 6 years after the facts giving
2374 rise to the cause of action were discovered or should have been
2375 discovered with the exercise of due diligence, but not more than
2376 8 years after the date such violation occurred.
2377 (14) This chapter does not limit any statutory right of the
2378 state to punish a person for a violation of a law.
2379 (15) When not in conflict with the Constitution or laws of
2380 the United States, the courts of this state have the same
2381 jurisdiction over civil suits instituted in connection with the
2382 sale or offer of sale of securities under any laws of the United
2383 States as the courts of this state may have with regard to
2384 similar cases instituted under the laws of this state.
2385 Section 15. Section 517.211, Florida Statutes, is amended
2386 to read:
2387 517.211 Private remedies available in cases of unlawful
2388 sale.—
2389 (1) Every sale made in violation of either s. 517.07 or s.
2390 517.12(1), (3), (4), (8), (10), (12), (15), or (17) may be
2391 rescinded at the election of the purchaser; however, except a
2392 sale made in violation of the provisions of s. 517.1202(3)
2393 relating to a renewal of a branch office notification or shall
2394 not be subject to this section, and a sale made in violation of
2395 the provisions of s. 517.12(12) relating to filing a change of
2396 address amendment is shall not be subject to this section. Each
2397 person making the sale and every director, officer, partner, or
2398 agent of or for the seller, if the director, officer, partner,
2399 or agent has personally participated or aided in making the
2400 sale, is jointly and severally liable to the purchaser in an
2401 action for rescission, if the purchaser still owns the security,
2402 or for damages, if the purchaser has sold the security. No
2403 purchaser otherwise entitled will have the benefit of this
2404 subsection who has refused or failed, within 30 days after of
2405 receipt, to accept an offer made in writing by the seller, if
2406 the purchaser has not sold the security, to take back the
2407 security in question and to refund the full amount paid by the
2408 purchaser or, if the purchaser has sold the security, to pay the
2409 purchaser an amount equal to the difference between the amount
2410 paid for the security and the amount received by the purchaser
2411 on the sale of the security, together, in either case, with
2412 interest on the full amount paid for the security by the
2413 purchaser at the legal rate, pursuant to s. 55.03, for the
2414 period from the date of payment by the purchaser to the date of
2415 repayment, less the amount of any income received by the
2416 purchaser on the security.
2417 (2) Any person purchasing or selling a security in
2418 violation of s. 517.301, and every director, officer, partner,
2419 or agent of or for the purchaser or seller, if the director,
2420 officer, partner, or agent has personally participated or aided
2421 in making the sale or purchase, is jointly and severally liable
2422 to the person selling the security to or purchasing the security
2423 from such person in an action for rescission, if the plaintiff
2424 still owns the security, or for damages, if the plaintiff has
2425 sold the security.
2426 (3) For purposes of any action brought under this section,
2427 a control person who controls any person found to have violated
2428 any provision specified in subsection (1) is jointly and
2429 severally liable with, and to the same extent as, such
2430 controlled person in any action brought under this section
2431 unless the control person can establish by a preponderance of
2432 the evidence that he or she acted in good faith and did not
2433 directly or indirectly induce the act that constitutes the
2434 violation or cause of action.
2435 (4) In an action for rescission:
2436 (a) A purchaser may recover the consideration paid for the
2437 security or investment, plus interest thereon at the legal rate
2438 from the date of purchase, less the amount of any income
2439 received by the purchaser on the security or investment upon
2440 tender of the security or investment.
2441 (b) A seller may recover the security upon tender of the
2442 consideration paid for the security, plus interest at the legal
2443 rate from the date of purchase, less the amount of any income
2444 received by the defendant on the security.
2445 (5)(4) In an action for damages brought by a purchaser of a
2446 security or investment, the plaintiff must shall recover an
2447 amount equal to the difference between:
2448 (a) The consideration paid for the security or investment,
2449 plus interest thereon at the legal rate from the date of
2450 purchase; and
2451 (b) The value of the security or investment at the time it
2452 was disposed of by the plaintiff, plus the amount of any income
2453 received on the security or investment by the plaintiff.
2454 (6)(5) In an action for damages brought by a seller of a
2455 security, the plaintiff shall recover an amount equal to the
2456 difference between:
2457 (a) The value of the security at the time of the complaint,
2458 plus the amount of any income received by the defendant on the
2459 security; and
2460 (b) The consideration received for the security, plus
2461 interest at the legal rate from the date of sale.
2462 (7)(6) In any action brought under this section, including
2463 an appeal, the court shall award reasonable attorney attorneys’
2464 fees to the prevailing party unless the court finds that the
2465 award of such fees would be unjust.
2466 (8) This chapter does not limit any statutory or common-law
2467 right of a person to bring an action in a court for an act
2468 involved in the sale of securities or investments.
2469 (9) The same civil remedies provided by the laws of the
2470 United States for the purchasers or sellers of securities in
2471 interstate commerce also extend to purchasers or sellers of
2472 securities under this chapter.
2473 Section 16. Section 517.221, Florida Statutes, is repealed.
2474 Section 17. Section 517.241, Florida Statutes, is repealed.
2475 Section 18. Section 517.301, Florida Statutes, is amended
2476 to read:
2477 517.301 Fraudulent transactions; falsification or
2478 concealment of facts.—
2479 (1) It is unlawful and a violation of the provisions of
2480 this chapter for a person:
2481 (a) In connection with the rendering of any investment
2482 advice or in connection with the offer, sale, or purchase of any
2483 investment or security, including any security exempted under
2484 the provisions of s. 517.051 and including any security sold in
2485 a transaction exempted under the provisions of s. 517.061, s.
2486 517.0611, or s. 517.0612, directly or indirectly:
2487 1. To employ any device, scheme, or artifice to defraud;
2488 2. To obtain money or property by means of any untrue
2489 statement of a material fact or any omission to state a material
2490 fact necessary in order to make the statements made, in the
2491 light of the circumstances under which they were made, not
2492 misleading; or
2493 3. To engage in any transaction, practice, or course of
2494 business which operates or would operate as a fraud or deceit
2495 upon a person.
2496 (b) By use of any means, to publish, give publicity to, or
2497 circulate any notice, circular, advertisement, newspaper,
2498 article, letter, investment service, communication, or broadcast
2499 that, although which, though not purporting to offer a security
2500 for sale, describes such security for a consideration received
2501 or to be received directly or indirectly from an issuer,
2502 underwriter, or dealer, or from an agent or employee of an
2503 issuer, underwriter, or dealer, without fully disclosing the
2504 receipt, whether past or prospective, of such consideration and
2505 the amount of the consideration.
2506 (c) In any matter within the jurisdiction of the office, to
2507 knowingly and willfully falsify, conceal, or cover up, by any
2508 trick, scheme, or device, a material fact, make any false,
2509 fictitious, or fraudulent statement or representation, or make
2510 or use any false writing or document, knowing the same to
2511 contain any false, fictitious, or fraudulent statement or entry.
2512 (2) For purposes of ss. 517.311 and 517.312 and this
2513 section, the term “investment” means any commitment of money or
2514 property principally induced by a representation that an
2515 economic benefit may be derived from such commitment, except
2516 that the term does not include a commitment of money or property
2517 for:
2518 (a) The purchase of a business opportunity, business
2519 enterprise, or real property through a person licensed under
2520 chapter 475 or registered under former chapter 498; or
2521 (b) The purchase of tangible personal property through a
2522 person not engaged in telephone solicitation, electronic mail,
2523 text messages, social media, or other electronic means where
2524 said property is offered and sold in accordance with the
2525 following conditions:
2526 1. there are no specific representations or guarantees made
2527 by the offeror or seller as to the economic benefit to be
2528 derived from the purchase.;
2529 2. The tangible property is delivered to the purchaser
2530 within 30 days after sale, except that such 30-day period may be
2531 extended by the office if market conditions so warrant; and
2532 3. The seller has offered the purchaser a full refund
2533 policy in writing, exercisable by the purchaser within 10 days
2534 of the date of delivery of such tangible personal property,
2535 except that the amount of such refund may not exceed the bid
2536 price in effect at the time the property is returned to the
2537 seller. If the applicable sellers’ market is closed at the time
2538 the property is returned to the seller for a refund, the amount
2539 of such refund shall be based on the bid price for such property
2540 at the next opening of such market.
2541 (3) It is unlawful for a person in issuing or selling a
2542 security within this state, including a security exempted under
2543 s. 517.051 and including a transaction exempted under s.
2544 517.061, s. 517.0611, or s. 517.0612, to misrepresent that such
2545 security or business entity has been guaranteed, sponsored,
2546 recommended, or approved by the state or an agency or officer of
2547 the state or by the United States or an agency or officer of the
2548 United States.
2549 (4) It is unlawful for a person registered or required to
2550 be registered, or subject to the notice requirements, under this
2551 chapter, including such persons and issuers who are subject to
2552 s. 517.051, s. 517.061, s. 517.0611, s. 517.0612, or s. 517.081,
2553 to misrepresent that such person has been sponsored,
2554 recommended, or approved, or that such person’s abilities or
2555 qualifications have in any respect been approved, by the state
2556 or an agency or officer of the state or by the United States or
2557 an agency or officer of the United States.
2558 (5) It is unlawful and a violation of this chapter for a
2559 person in connection with the offer or sale of an investment to
2560 obtain money or property by means of:
2561 (a) A misrepresentation that the investment offered or sold
2562 is guaranteed, sponsored, recommended, or approved by the state
2563 or an agency or officer of the state or by the United States or
2564 an agency or officer of the United States; or
2565 (b) A misrepresentation that such person is sponsored,
2566 recommended, or approved, or that such person’s abilities or
2567 qualifications have in any respect been approved, by the state
2568 or an agency or officer of the state or by the United States or
2569 an agency or officer of the United States.
2570 (6)(a) Subsection (3) or subsection (4) may not be
2571 construed to prohibit a statement that a person or security is
2572 registered or has made a notice filing under this chapter if
2573 such statement is required by this chapter or rules promulgated
2574 thereunder and is true in fact and if the effect of such
2575 statement is not a misrepresentation.
2576 (b) A statement that a person is registered made in
2577 connection with the offer or sale of a security under this
2578 chapter must include the following disclaimer: “Registration
2579 does not imply that such person has been sponsored, recommended,
2580 or approved by the state or an agency or officer of the state or
2581 by the United States or an agency or officer of the United
2582 States.”
2583 1. If the statement of registration is made in writing, the
2584 disclaimer must immediately follow such statement and must be in
2585 the same size and style of print as the statement of
2586 registration.
2587 2. If the statement of registration is made orally, the
2588 disclaimer must be made or broadcast with the same force and
2589 effect as the statement of registration.
2590 (7) It is unlawful and a violation of this chapter for a
2591 person to directly or indirectly manage, supervise, control, or
2592 own, either alone or in association with others, a boiler room
2593 in this state which sells or offers for sale a security or
2594 investment in violation of subsection (1), subsection (3),
2595 subsection (4), subsection (5), or subsection (6).
2596 Section 19. Section 517.311, Florida Statutes, is repealed.
2597 Section 20. Section 517.312, Florida Statutes, is repealed.
2598 Section 21. Subsections (1), (2), and (3) of section
2599 517.072, Florida Statutes, are amended to read:
2600 517.072 Viatical settlement investments.—
2601 (1) The exemptions provided for by s. 517.051(6) and (11)
2602 ss. 517.051(6), (8), and (10) do not apply to a viatical
2603 settlement investment.
2604 (2) The offering of a viatical settlement investment is not
2605 an exempt transaction under s. 517.061(10), (12), (13), and (18)
2606 s. 517.061(2), (3), (8), (11), and (18), regardless of whether
2607 the offering otherwise complies with the conditions of that
2608 section, unless such offering is to a qualified institutional
2609 buyer.
2610 (3) The registration provisions of ss. 517.07 and 517.12 do
2611 not apply to any of the following transactions in viatical
2612 settlement investments; however, such transactions in viatical
2613 settlement investments are subject to s. 517.301 the provisions
2614 of ss. 517.301, 517.311, and 517.312:
2615 (a) The transfer or assignment of an interest in a
2616 previously viaticated policy from a natural person who transfers
2617 or assigns no more than one such interest in a single calendar
2618 year.
2619 (b) The provision of stop-loss coverage to a viatical
2620 settlement provider, financing entity, or related provider
2621 trust, as those terms are defined in s. 626.9911, by an
2622 authorized or eligible insurer.
2623 (c) The transfer or assignment of a viaticated policy from
2624 a licensed viatical settlement provider to another licensed
2625 viatical settlement provider, a related provider trust, a
2626 financing entity, or a special purpose entity, as those terms
2627 are defined in s. 626.9911, or to a contingency insurer,
2628 provided that such transfer or assignment is not the direct or
2629 indirect promotion of any scheme or enterprise with the intent
2630 of violating or evading any provision of this chapter.
2631 (d) The transfer or assignment of a viaticated policy to a
2632 bank, trust company, savings institution, insurance company,
2633 dealer, investment company as defined in the Investment Company
2634 Act of 1940, as amended, pension or profit-sharing trust,
2635 qualified institutional buyer, or an accredited investor,
2636 provided such transfer or assignment is not for the direct or
2637 indirect promotion of any scheme or enterprise with the intent
2638 of violating or evading any provision of this chapter.
2639 (e) The transfer or assignment of a viaticated policy by a
2640 conservator of a viatical settlement provider appointed by a
2641 court of competent jurisdiction who transfers or assigns
2642 ownership of viaticated policies pursuant to that court’s order.
2643 Section 22. Subsection (2), paragraph (a) of subsection
2644 (9), paragraph (j) of subsection (16), subsection (20), and
2645 paragraphs (b) and (c) of subsection (21) of section 517.12,
2646 Florida Statutes, are amended to read:
2647 517.12 Registration of dealers, associated persons,
2648 intermediaries, and investment advisers.—
2649 (2) The registration requirements of this section do not
2650 apply in a transaction exempted by s. 517.061(1)-(6), (8), (9),
2651 (12), and (13) s. 517.061(1)-(10), (12), (14), and (15).
2652 (9)(a) An applicant for registration shall pay an
2653 assessment fee of $200, in the case of a dealer or investment
2654 adviser, or $50, in the case of an associated person. An
2655 associated person may be assessed an additional fee to cover the
2656 cost for the fingerprints to be processed by the office. Such
2657 fee shall be determined by rule of the commission. Such fees
2658 become the revenue of the state, except for those assessments
2659 provided for under s. 517.131(2) s. 517.131(1) until such time
2660 as the Securities Guaranty Fund satisfies the statutory limits,
2661 and are not returnable in the event that registration is
2662 withdrawn or not granted.
2663 (16)
2664 (j) All fees collected under this subsection become the
2665 revenue of the state, except those assessments provided for
2666 under s. 517.131(2) s. 517.131(1), until the Securities Guaranty
2667 Fund has satisfied the statutory limits. Such fees are not
2668 returnable if a notice-filing is withdrawn.
2669 (20) The registration requirements of this section do not
2670 apply to any general lines insurance agent or life insurance
2671 agent licensed under chapter 626, with regard to for the sale of
2672 a security as defined in s. 517.021(25)(g) s. 517.021(23)(g), if
2673 the individual is directly authorized by the issuer to offer or
2674 sell the security on behalf of the issuer and the issuer is a
2675 federally chartered savings bank subject to regulation by the
2676 Federal Deposit Insurance Corporation. Actions under this
2677 subsection shall constitute activity under the insurance agent’s
2678 license for purposes of ss. 626.611 and 626.621.
2679 (21)
2680 (b) Prior to the completion of any securities transaction
2681 described in s. 517.061(7) s. 517.061(22), a merger and
2682 acquisition broker must receive written assurances from the
2683 control person with the largest percentage of ownership for both
2684 the buyer and seller engaged in the transaction that:
2685 1. After the transaction is completed, any person who
2686 acquires securities or assets of the eligible privately held
2687 company, acting alone or in concert, will be a control person of
2688 the eligible privately held company or will be a control person
2689 for the business conducted with the assets of the eligible
2690 privately held company; and
2691 2. If any person is offered securities in exchange for
2692 securities or assets of the eligible privately held company,
2693 such person will, before becoming legally bound to complete the
2694 transaction, receive or be given reasonable access to the most
2695 recent year-end financial statements of the issuer of the
2696 securities offered in exchange. The most recent year-end
2697 financial statements shall be customarily prepared by the
2698 issuer’s management in the normal course of operations. If the
2699 financial statements of the issuer are audited, reviewed, or
2700 compiled, the most recent year-end financial statements must
2701 include any related statement by the independent certified
2702 public accountant; a balance sheet dated not more than 120 days
2703 before the date of the exchange offer; and information
2704 pertaining to the management, business, results of operations
2705 for the period covered by the foregoing financial statements,
2706 and material loss contingencies of the issuer.
2707 (c) A merger and acquisition broker engaged in a
2708 transaction exempt under s. 517.061(7) s. 517.061(22) is exempt
2709 from registration under this section unless the merger and
2710 acquisition broker:
2711 1. Directly or indirectly, in connection with the transfer
2712 of ownership of an eligible privately held company, receives,
2713 holds, transmits, or has custody of the funds or securities to
2714 be exchanged by the parties to the transaction;
2715 2. Engages on behalf of an issuer in a public offering of
2716 any class of securities which is registered, or which is
2717 required to be registered, with the United States Securities and
2718 Exchange Commission under the Securities Exchange Act of 1934,
2719 15 U.S.C. ss. 78a et seq., or with the office under s. 517.07;
2720 or for which the issuer files, or is required to file, periodic
2721 information, documents, and reports under s. 15(d) of the
2722 Securities Exchange Act of 1934, 15 U.S.C. s. 78o(d);
2723 3. Engages on behalf of any party in a transaction
2724 involving a public shell company;
2725 4. Is subject to a suspension or revocation of registration
2726 under s. 15(b)(4) of the Securities Exchange Act of 1934, 15
2727 U.S.C. s. 78o(b)(4);
2728 5. Is subject to a statutory disqualification described in
2729 s. 3(a)(39) of the Securities Exchange Act of 1934, 15 U.S.C. s.
2730 78c(a)(39);
2731 6. Is subject to a disqualification under the United States
2732 Securities and Exchange Commission Rule 506(d), 17 C.F.R. s.
2733 230.506(d); or
2734 7. Is subject to a final order described in s. 15(b)(4)(H)
2735 of the Securities Exchange Act of 1934, 15 U.S.C. s.
2736 78o(b)(4)(H).
2737 Section 23. Subsection (6) of section 517.1201, Florida
2738 Statutes, is amended to read:
2739 517.1201 Notice filing requirements for federal covered
2740 advisers.—
2741 (6) All fees collected under this section become the
2742 revenue of the state, except for those assessments provided for
2743 under s. 517.131(2) s. 517.131(1) until such time as the
2744 Securities Guaranty Fund satisfies the statutory limits, and are
2745 not returnable in the event that a notice filing is withdrawn.
2746 Section 24. Subsections (4) and (8) of section 517.1202,
2747 Florida Statutes, are amended to read:
2748 517.1202 Notice-filing requirements for branch offices.—
2749 (4) A branch office notice-filing under this section shall
2750 be summarily suspended by the office if the notice-filer fails
2751 to provide to the office, within 30 days after a written request
2752 by the office, all of the information required by this section
2753 and the rules adopted under this section. The summary suspension
2754 shall be in effect for the branch office until such time as the
2755 notice-filer submits the requested information to the office,
2756 pays a fine as prescribed by s. 517.191(9) s. 517.221(3), and a
2757 final order is entered. At such time, the suspension shall be
2758 lifted. For purposes of s. 120.60(6), failure to provide all
2759 information required by this section and the underlying rules
2760 constitutes immediate and serious danger to the public health,
2761 safety, and welfare. If the notice-filer fails to provide all of
2762 the requested information within a period of 90 days, the
2763 notice-filing shall be revoked by the office.
2764 (8) All fees collected under this section become the
2765 revenue of the state, except for those assessments provided for
2766 under s. 517.131(2) s. 517.131(1) until such time as the
2767 Securities Guaranty Fund satisfies the statutory limits, and are
2768 not returnable in the event that a branch office notice-filing
2769 is withdrawn.
2770 Section 25. Subsection (2) of section 517.302, Florida
2771 Statutes, is amended to read:
2772 517.302 Criminal penalties; alternative fine; Anti-Fraud
2773 Trust Fund; time limitation for criminal prosecution.—
2774 (2) Any person who violates s. 517.301 the provisions of s.
2775 517.312(1) by obtaining money or property of an aggregate value
2776 exceeding $50,000 from five or more persons is guilty of a
2777 felony of the first degree, punishable as provided in s.
2778 775.082, s. 775.083, or s. 775.084.
2779 Section 26. This act shall take effect October 1, 2024.