Florida Regulations 69W-400.003: Rules for Government Securities Under Section 517.051(1), F.S
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For purposes of the exemption of Florida Statutes § 517.051(1), any issuer or guarantor of securities which are or have been in default shall be deemed to have satisfied the requirement of full and fair disclosure, thereby entitling the securities issued or guaranteed by such person to the exemption granted therein, if the following information is contained in an offering circular provided to each offeree prior to any sale of such securities:
(1) A description of each and every default by the issuer and guarantor including:
(a) The amount(s) currently or previously in default;
(b) The date(s) of all such defaults;
(c) Whether the amount(s) in default were principal and/or interest;
(d) The current status of each prior and current default(s);
(e) Whether there were any legal proceedings, civil, criminal, or administrative, commenced as a result of or related to any default(s), and if so, for each such proceeding, a description of the proceedings including:
1. The nature of such proceeding;
2. The name and address of the forum where such proceeding was filed;
3. The substantive allegations of the pleadings;
4. The name and address of the attorney of record for the plaintiffs or investors; and,
5. The current status, or where applicable, the final resolution of such proceeding;
(f) Whether any Trustee or Receiver has ever been appointed over the assets of the issuer and guarantor and if so:
1. The name of such Trustee and Receiver;
2. The name of the forum or person who appointed the Trustee and Receiver;
3. The dates the Trustee and Receiver were appointed and the date that such appointment terminated. If the appointment has not terminated the offering circular shall so state;
4. The reason for appointment of the Trustee and Receiver; and,
5. The amount of any costs and expenses incurred by the Trustee and Receiver and their agents or counsel in such proceeding;
(g) A discussion of each pending legal proceeding which may materially affect the issuer’s and guarantor’s ability to perform its obligations to the present and future holders of the securities being offered. Such discussion shall include:
1. The type of proceeding;
2. In what forum such proceeding is filed;
3. When such proceeding was filed;
4. The substantive allegations at issue;
5. The current status of such proceeding;
6. The damages sought by the plaintiffs and defendants in such proceeding; and,
7. The potential liability to the issuer and guarantor as a result of the proceeding and the anticipated source of payment should such liability materialize.
(h) Financial statements for the last two (2) fiscal years prepared and presented in accordance with United States generally accepted accounting principles. Such statements shall additionally have been audited by an independent governmental audit organization or by an independent certified public accountant; and,
(i) All other information which an investor would consider material in order to make an informed decision with respect to the securities being offered on behalf of the issuer pursuant to the exemption provided in Florida Statutes § 517.051(1)
(2) If the person required to make the above disclosures in good faith believes that any of the above disclosures is not an appropriate disclosure in that the information would not be considered material by a reasonable investor, the offering circular provided to each offeree as required herein shall set forth the fact that the Office of Financial Regulation has required such disclosure and the reason such disclosure is not deemed appropriate and material by the person required to make the disclosure(s).
Rulemaking Authority Florida Statutes § 517.03(1), 517.051(1) FS. Law Implemented 517.051(1) FS. History-New 12-8-87, Amended 2-17-93, Formerly 3E-400.003, Amended 5-15-07.
Terms Used In Florida Regulations 69W-400.003
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
- Pleadings: Written statements of the parties in a civil case of their positions. In the federal courts, the principal pleadings are the complaint and the answer.
- Trustee: A person or institution holding and administering property in trust.
(a) The amount(s) currently or previously in default;
(b) The date(s) of all such defaults;
(c) Whether the amount(s) in default were principal and/or interest;
(d) The current status of each prior and current default(s);
(e) Whether there were any legal proceedings, civil, criminal, or administrative, commenced as a result of or related to any default(s), and if so, for each such proceeding, a description of the proceedings including:
1. The nature of such proceeding;
2. The name and address of the forum where such proceeding was filed;
3. The substantive allegations of the pleadings;
4. The name and address of the attorney of record for the plaintiffs or investors; and,
5. The current status, or where applicable, the final resolution of such proceeding;
(f) Whether any Trustee or Receiver has ever been appointed over the assets of the issuer and guarantor and if so:
1. The name of such Trustee and Receiver;
2. The name of the forum or person who appointed the Trustee and Receiver;
3. The dates the Trustee and Receiver were appointed and the date that such appointment terminated. If the appointment has not terminated the offering circular shall so state;
4. The reason for appointment of the Trustee and Receiver; and,
5. The amount of any costs and expenses incurred by the Trustee and Receiver and their agents or counsel in such proceeding;
(g) A discussion of each pending legal proceeding which may materially affect the issuer’s and guarantor’s ability to perform its obligations to the present and future holders of the securities being offered. Such discussion shall include:
1. The type of proceeding;
2. In what forum such proceeding is filed;
3. When such proceeding was filed;
4. The substantive allegations at issue;
5. The current status of such proceeding;
6. The damages sought by the plaintiffs and defendants in such proceeding; and,
7. The potential liability to the issuer and guarantor as a result of the proceeding and the anticipated source of payment should such liability materialize.
(h) Financial statements for the last two (2) fiscal years prepared and presented in accordance with United States generally accepted accounting principles. Such statements shall additionally have been audited by an independent governmental audit organization or by an independent certified public accountant; and,
(i) All other information which an investor would consider material in order to make an informed decision with respect to the securities being offered on behalf of the issuer pursuant to the exemption provided in Florida Statutes § 517.051(1)
(2) If the person required to make the above disclosures in good faith believes that any of the above disclosures is not an appropriate disclosure in that the information would not be considered material by a reasonable investor, the offering circular provided to each offeree as required herein shall set forth the fact that the Office of Financial Regulation has required such disclosure and the reason such disclosure is not deemed appropriate and material by the person required to make the disclosure(s).
Rulemaking Authority Florida Statutes § 517.03(1), 517.051(1) FS. Law Implemented 517.051(1) FS. History-New 12-8-87, Amended 2-17-93, Formerly 3E-400.003, Amended 5-15-07.