HRS §431:4-210
Rules against selling company stock you do not own
This section makes it illegal for company owners, directors, or officers to sell company stock they do not own, or to sell stock they own but fail to deliver within a set time. A person is not guilty if they tried in good faith but could not deliver on time, or if delivering would be very inconvenient or costly.
The statute, as written — Unlawful sales of equity security
It shall be unlawful for any beneficial owner, director, or officer, directly or indirectly, to sell any equity security of the company if the person selling the security or the person's principal: (1) Does not own the security sold; or (2) If owning the security, does not deliver it against the sale within twenty days thereafter, or does not within five days after the sale deposit it in the mails or other usual channels of transportation. No person shall be deemed to have violated this section if the person proves that notwithstanding the exercise of good faith the person was unable to make delivery or deposit within the required time, or that to do so would cause undue inconvenience or expense.
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