                                 CODE OF VIRGINIA

STOP ORDERS (§ 13.1-513)

a. The Commission may issue a stop order denying effectiveness to, or revoking
the effectiveness of, any registration statement if it finds that such an order
is in the public interest and that:

   1. The registration statement together with any amendments, or any report
   filed by the registrant or any other document filed in connection with the
   registration statement contained any statement which was, at the time and in
   the circumstances in which it was made, false or misleading with respect to
   any material fact or omitted to state any material fact required to be stated
   therein;

   2. The applicant or registrant or any agent, partner, officer or director of
   the applicant or registrant (or any person occupying a similar status or
   performing similar functions) or any person directly or indirectly controlling
   or controlled by the applicant or registrant has violated, in connection with
   the offering, any provision of this chapter or of any other law applicable to
   the offering, or any rule, order or condition lawfully imposed under this
   chapter;

   3. Any person specified in subdivision (2) of this subsection has failed to
   furnish any information lawfully requested by the Commission;

   4. The right to sell the securities which are the subject of the registration
   statement has been denied or revoked or is suspended under any federal act
   applicable to the offering (and such denial, revocation or suspension is still
   in effect);

   5. The issuer is insolvent, either in the sense that its liabilities exceed
   its assets or in the sense that it cannot meet its obligations as they mature;

   6. The issuer&#8217;s business includes or probably will include activities
   which are forbidden by law;

   7. The offering has worked or tended to work a fraud upon investors or
   probably will so operate; or

   8. Where a security is to be or has been registered by notification, it is not
   eligible for such registration.

b. No stop order shall be entered without reasonable notice to the applicant or
registrant.

c. In any proceeding under this section, the Commission may refrain from issuing
or, after issuing, may revoke a stop order on condition that the persons against
whom it is directed correct the matters complained of on which it is based.

HISTORY: 1956, c. 428; 1960, c. 71.