§485-7 Securities issued by residential cooperative corporations. In order to be entitled to the exemption provided by section 485-6(13), the issuer of a security defined in such paragraph shall make application for the exemption to the commissioner of securities on such form and containing such information as the commissioner may prescribe. If the commissioner finds that the proposed plan of business of the applicant and the proposed issuance of securities are fair, just, and equitable, that the applicant intends to transact its business fairly and honestly, and that the securities that the applicant proposes to issue and the method to be used by the applicant in issuing or disposing of the securities are not such as, in the opinion of the commissioner, will work a fraud upon the purchaser thereof, the commissioner shall issue to the applicant a permit authorizing the applicant to issue and dispose of the securities in this State in the manner provided in section 485-6(13) and in such amounts and for such consideration as the commissioner may provide in the permit. Otherwise, the commissioner shall deny the application and refuse the permit and notify the applicant in writing of such decision, and the exemption of section 485-6(13) shall not apply, subject to appeal as provided in section 485-23.

In any permit issued under this section, the commissioner may impose conditions requiring the deposit in escrow of any or all securities, the impoundment of the proceeds from the sale thereof, approval of advertising material, any of the conditions set forth in section 485-18, and such other conditions as the commissioner deems advisable for the protection of the public and the purchasers of the securities. The commissioner may act as escrow holder for securities required to be deposited in escrow by the commissioner's order or as a necessary signatory on any account in which impounded proceeds from the sale of escrowed securities are deposited. [L 1961, c 136, §2; Supp, §199-5.5; HRS §485-7; gen ch 1985]