(a) Subject to § 73-208(e) of this title, the Director may issue a stop order prohibiting the offering and sale of a security, or the Director may issue a stop order denying effectiveness to, or suspending or revoking the effectiveness of, any registration statement, if the Director finds that the order is in the public interest and that:

(1) The registration statement as of its effective date or as of any earlier date in the case of an order denying effectiveness, or any amendment or renewal under § 73-205(f) of this title as of its effective date, or any report under § 73-205(e) of this title is incomplete in any material respect or contains any statement which was, in the light of the circumstances under which it was made, false or misleading with respect to any material fact;

(2) Any provision of this chapter or any rule, order, or condition lawfully imposed under this chapter has been violated, in connection with the offering, by:

a. The person filing the registration statement;

b. The issuer, any partner, officer, or director of the issuer, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling or controlled by the issuer, but only if the person filing the registration statement is directly or indirectly controlled by or acting for the issuer; or

c. Any underwriter;

(3) The security registered or sought to be registered is the subject of an administrative stop order or similar order or permit or temporary injunction of any court of competent jurisdiction entered under any federal or state act applicable to the offering; but the Director may not institute the proceeding against an effective registration statement under this subsection more than one year from the date of the order or injunction relied on, and may not enter an order under this subsection on the basis of an order or injunction entered under any other state act unless that order or injunction is based on facts which would currently constitute a ground for stop order under this section;

(4) The issuer’s enterprise or method of business includes or would include activities which are illegal where performed;

(5) The offering has worked or tended to work a fraud upon purchasers or would so operate;

(6) The offering has been or would be made with unreasonable amounts of underwriters’ and sellers’ discounts, commissions, or other compensation, or promoters’ profits or participation, or unreasonable amounts or kinds of options;

(7) The applicant or registrant has failed to pay the proper filing fee; but the Director shall vacate any such order when the deficiency has been corrected; or

(8) When a security is sought to be registered by coordination, there has been a failure to comply with the undertaking required by § 73-203(b)(4) of this title.

(b) The Director may not institute a stop-order proceeding against an effective registration statement on the basis of a fact or transaction known to the Director when the registration statement became effective, unless the proceeding is instituted within the next 90 days.

(c) The Director may by order summarily postpone or suspend the effectiveness of the registration statement pending final determination of any proceeding under this section. Upon the entry of the order, the Director shall promptly notify each person specified in subsection (d) of this section that it has been entered and of the reasons therefor and that within 15 days after the receipt of a written request the matter will be set down for hearing. If no hearing is requested and none is ordered by the Director, the order will remain in effect until it is modified or vacated by the Director. If a hearing is requested or ordered, the Director, after notice of and opportunity for hearing to each person specified in subsection (d) of this section, may modify or vacate the order or extend it until final determination.

(d) No stop order may be entered under any part of this section, except the first sentence of subsection (c) of this section, without appropriate prior notice to the applicant making the filing, the issuer, and the person on whose behalf the securities are to be or have been offered, opportunity for hearing, and written findings of fact and conclusions of law.

(e) The Director may vacate or modify a stop order upon finding that the conditions which prompted entry have changed or that it is otherwise in the public interest to do so.

6 Del. C. 1953, § 7308; 59 Del. Laws, c. 208, § 1; 68 Del. Laws, c. 181, § 13; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 560, § 2; 71 Del. Laws, c. 162, § 7; 78 Del. Laws, c. 175, §§ 23-27, 92, 118; 79 Del. Laws, c. 182, § 3.