44-1878. Impoundment of funds from sale of speculative securities
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/az/title-44/44-1878A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
A. Except as provided in section 44-1901, as a condition to registration under this chapter of securities of a speculative nature the commission may by order impose reasonable restrictions and conditions upon the use and disbursement of funds to be derived from the sale of such securities, including impoundment of such funds in a depository satisfactory to the commission, subject to the orders of the commission and to such terms and conditions as to release as the commission deems necessary.
B. If the commission imposes impoundment of funds derived from such securities sales, and if the registrant fails to comply with other terms and conditions imposed by the commission pursuant to this section or fails to comply with the other provisions of, or rules adopted pursuant to, this chapter, then the commission may order such impounded funds returned to the investors purchasing such securities at their election.
C. For the purpose of this section, an issue of a speculative nature means one in which the business or earnings of the issuer are based upon future developments and potentials rather than on current tangible assets.