12 C.F.R. § 563b.340 What sales practices are prohibited?
Title 12 - Banks and Banking
(a) In connection with offers, sales, or purchases of conversion shares under this part, you and your directors, officers, agents, or employees may not: (1) Employ any device, scheme, or artifice to defraud; (2) Obtain money or property by means of any untrue statement of a material fact or any omission of a material fact necessary to make the statements, in light of the circumstances under which they were made, not misleading; or (3) Engage in any act, transaction, practice, or course of business that operates or would operate as a fraud or deceit upon a purchaser or seller. (b) During your conversion, no person may: (1) Transfer, or enter into any agreement or understanding to transfer, the legal or beneficial ownership of subscription rights for your conversion shares or the underlying securities to the account of another; (2) Make any offer, or any announcement of an offer, to purchase any of your conversion shares from anyone but you; or (3) Knowingly acquire more than the maximum purchase allowable under your plan of conversion. (c) The restrictions in paragraphs (b)(1) and (b)(2) of this section do not apply to offers for more than 10 percent of any class of conversion shares by: (1) An underwriter or a selling group, acting on your behalf, that makes the offer with a view toward public resale; or (2) One or more of your tax-qualified employee stock ownership plans so long as the plan or plans do not beneficially own more than 25 percent of any class of your equity securities in the aggregate. (d) If any person is found to have violated the restrictions in paragraphs (b)(1) and (b)(2) of this section, they may face prosecution or other legal action.
Title 12: Banks and Banking
PART 563b—CONVERSIONS FROM MUTUAL TO STOCK FORM
Subpart A—Standard Conversions
Offers and Sales of Stock
§ 563b.340 What sales practices are prohibited?
