(a) General provisions. Any public advertising in connection with the sale and promotion of a public offering of registered securities or securities exempted under Arkansas Code § 23-42-503(a)(7) and (c) of the Arkansas Securities Act, Arkansas Code § 23-42-101 et seq., and 23 CAR § 300-503(b)(2)(A) shall be subject to the following requirements and restrictions:

1. (1) Filing requirement. All sales literature or promotional material, other than that exempted by the Arkansas Securities Act or this section, shall be governed by the following:

   1. (A) The applicant shall submit to the Securities Commissioner at least five (5) days prior to its intended use or dissemination one (1) copy of such proposed material;
   2. (B) If not disallowed by the commissioner by written notice or otherwise within three (3) days from the date filed, the use of the material as submitted will be permitted; and
   3. (C) The commissioner will not issue formal approval of the literature and it is the responsibility of the user to determine the accuracy and reliability of the statements and material so used and in conformity with this section; and

2. (2) Specific prohibitions. The following devices or sales presentations, and the use thereof, will be deemed deceptive or misleading practices:

   1. (A) Comparison charts or graphs showing a distorted, unfair, or unrealistic relationship between the issuer’s past performance, progress, or success and that of another:

(i) Company;

1. (ii) Business;

   1. (iii) Industry; or

      1. (iv) Investment media;
   2. (B) Layout, format, size, kind, and color of type used so as to attract attention to favorable or incomplete portions of the advertising matter, or to minimize less favorable, modified, or modifying portions necessary to make the entire advertisement a fair and truthful representation;

   3. (C)

      1. (i) Statements or representations that by themselves predict future profit, success, appreciation, performance, or otherwise related to the merit or potential of the securities that are positive or imperative in form.
      2. (ii) The statements or representations should clearly indicate that they represent solely the opinion of the publisher thereof;
   4. (D) Generalizations, generalized conclusions, opinions, representations, and general statements based upon a particular set of facts and circumstances unless those facts and circumstances are stated and modified or explained by additional facts or circumstances as are necessary to make the entire advertisement a full, fair, and truthful representation;
   5. (E) Sales kits, film clips, displays, or exposures, which alone or by sequence and progressive compilation tend to present an accumulative or composite picture or impression of certain, or exaggerated potential, profit, safety, return, or extraordinary investment opportunity, or similar benefit to the prospective purchaser;
   6. (F) Distribution of any nonfactual or inaccurate data or material by words, pictures, charts, graphs, or otherwise, based on conjectural, unfounded, extravagant, or flamboyant claims, assertions, predictions, or excessive optimism; or
   7. (G) Any package or bonus deal, prize, gift, gimmick, or similar inducement, combined with or dependent upon the sale of some other product, contract, or service, unless the unit or combination has been fully disclosed and specifically described and identified in the application as the security being offered.

(b) Exceptions. The following forms and types of advertising are permitted without the necessity for filing or prior authorization by the commissioner, unless specifically prohibited:

1. (1) So-called “tombstone” advertising, containing no more than the following information:

   1. (A) Name and address of issuer;
   2. (B) Identity of title of security;
   3. (C) Per unit offering price, number of shares, and amount of offering;
   4. (D) Brief, general description of business;
   5. (E) Name and address of underwriter or address where offering circular or prospectus can be obtained; and
   6. (F) Date of issuance;
2. (2) Dividend notices, proxy statements, and reports to shareholders, including investment company quarterly and semiannual reports;
3. (3) Sales literature, advertising, or market letters prepared in conformity with the applicable regulations and in compliance with the filing requirements of the United States Securities and Exchange Commission, FINRA, or recognized securities exchanges;
4. (4) Factual or informative letters, bulletins, or releases, similar to “newsletters”, relating to issuer’s progress or activities or current financial condition; and

5. (5) Dissemination of any data incorporated in the offering circular or prospectus, so long as the use of the material, out of context, does not tend to detract from, distort, supersede, or express a different meaning of the representations or disclosures contained therein.

   1. (c) Violations. Any person who prepares, distributes, or causes to be issued or published any sales literature that is knowingly inaccurate, false, misleading, or tending to mislead in any material respect or otherwise in violation of the provisions herein may be held responsible and accountable therefore in any administrative or civil proceeding arising under the Arkansas Securities Act or this part.