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Law Offices of Eric Norstedt, P.A.
2924 Davie Road, Suite 200
Davie, Florida, 33314
P: (954) 467-6263

F: (954) 467-6159

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Securities Law
FEDERAL SECURITIES LAW
 - Securities Act of 1933
 - Securities Act of 1934
    - Rules Promulgated under
      the Securities Act of 1934

STATE SECURITIES LAW

Alabama Securities Law
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A Law Office Focusing on Representing Investors who were

Victims of Alaska Stock Broker Fraud

 

Selected Sections of the

Alaska Securities Act

 

Sections included on the Alaska Securities Act Page:

Sec. 45.55.010. Sales and purchases
Sec. 45.55.020. Advisory activities.
Sec. 45.55.023. Unethical business practices of state investment advisers, investment adviser representatives, and federal covered advisers.
Sec. 45.55.025. Fraudulent, dishonest, and unethical business practices of broker-dealers and agents. 
Sec. 45.55.027. Additional fraudulent, dishonest, and unethical business practices of agents
Sec. 45.55.028. Practices of broker-dealers and agents considered fraudulent. 
Sec. 45.55.925. Criminal penalties.
Sec. 45.55.930. Civil liability to buyers. 

Sec. 45.55.010. Sales and purchases.

(a)  A person may not, in connection
with the offer, sale, or purchase of a security, directly or indirectly
(1)  employ a device, scheme, or artifice to defraud;

(2)  make an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading; or
(3)  engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon a person.  (b) A person may not rely on an exemption from registration under AS 45.55.900 or on a security being a federal covered security to avoid the application of (a) of this section.

Sec. 45.55.020. Advisory activities.

(a) A person who receives a consideration
from another person primarily for advising the other person as to the value of
securities or their purchase or sale, whether through the issuance of analyses or
reports or otherwise, may not

(1) employ a device, scheme, or artifice to defraud the other person; or
(2)  engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon the other person.

(b) A state investment adviser may not enter into, extend, or renew an investment advisory contract unless the contract provides in writing that
(1)  the state investment adviser may not be compensated on the basis of a share of capital gains upon or capital appreciation of the funds or a portion of the funds of the client; and

(2)  the state investment adviser, if a partnership, shall notify the other party to the contract of a change in the membership of the partnership within a reasonable time after the change.

 The provisions of (b)(1) of this section do not prohibit an investment advisory contract that provides for compensation based upon the total value of a fund averaged over a definite period, or as of definite dates or taken as of a definite date.  The administrator, on request, may waive the provisions of (b)(1) of this section for investment advisory contracts that conform to the limitations of 15 U.S.C. 80b-5 (Investment Advisors Act of 1940).
(d) Repealed.

(e)  A state investment adviser may not take or have custody of the securities or funds of a client if

(1)  the administrator by regulation prohibits custody, or

(2)  in the absence of regulation, the state investment adviser fails to notify the administrator that the adviser has or may have custody.

Sec. 45.55.023. Unethical business practices of state investment advisers,
investment adviser representatives, and federal covered advisers. 

(a)  A  person who is a state investment adviser, investment adviser representative, or federal covered adviser is a fiduciary and has a duty to act primarily for the benefit of the client.  The provisions of this section apply to federal covered advisers only to the extent that the conduct alleged is fraudulent or deceptive under AS 45.55.010(a) or AS 45.55.020(a), or to the extent otherwise provided by P.L. 104 - 290, 101 Stat. 3416 - 3440 (National Securities Markets Improvement Act of 1996).  While the extent and nature of the duty to act primarily for the benefit of the client varies according to the nature of the relationship between an investment adviser and its clients and the circumstances of each case, a state investment adviser, an investment adviser representative, or a federal covered adviser may not engage in dishonest or unethical business practices in the investment advisory business under AS 45.55.060(a)(7), including

(1)  recommending to a client to whom investment supervisory, management, or consulting services are provided, the purchase, sale, or exchange of a security without reasonable grounds to believe that the recommendation is suitable for the client on the basis of information furnished by the client after reasonable inquiry concerning the client’s investment objectives, financial situation and needs, and other information known to the state investment adviser, investment adviser representative, or federal covered adviser;

(2)  exercising discretionary power in placing an order for the purchase or sale of securities for a client without obtaining written discretionary authority from the client within 10 business days after the date of the first transaction placed under oral discretionary authority unless the discretionary power relates solely to the price at which or the time when an order involving a definite amount of a specified security will be executed, or both;

(3)  in a client’s account inducing trading that is excessive in size or frequency in view of the financial resources, investment objectives, and character of the account if the state investment adviser, investment adviser representative, or federal covered adviser can directly benefit from the number of securities transactions effected in a client’s account;

(4)  placing an order to purchase or sell a security for the account of a client without authority to do so;

(5)  placing an order to purchase or sell a security for the account of a client upon the instruction of a third party without first having obtained a written third-party trading authorization from the client;

(6)  borrowing money or securities from a client unless the client is a financial institution engaged in the business of loaning money or the client is an affiliate of the state investment adviser or federal covered adviser borrowing the money or securities;

(7)  loaning money to a client unless the state investment adviser or federal covered adviser loaning the money is a financial institution engaged in the business of loaning money or the client is an affiliate of the state investment adviser or federal covered adviser;

(8)  misrepresenting to an advisory client or prospective advisory client the qualifications of the state investment adviser, an employee of the state investment adviser, the investment adviser representative, the federal covered adviser, or an employee of the federal covered adviser; misrepresenting the nature of the advisory services being offered or fees to be charged for a service; or omitting to state a material fact necessary to make the statements made regarding qualifications, services, or fees not misleading in light of the circumstances under which the statements are made;

(9)  providing a report or recommendation to an advisory client prepared by someone other than the state investment adviser, the investment adviser representative, or the federal covered adviser without disclosing that the report or recommendation was prepared by someone else, except that this prohibition does not apply to a situation where the state investment adviser, investment adviser representative, or federal covered adviser uses published research reports or statistical analyses to render advice or where a state investment adviser, an investment adviser representative, or a federal covered adviser orders the research reports or statistical analyses in the normal course of providing service;

(10) charging a client an unreasonable advisory fee;

(11) failing to disclose to a client in writing before any advice is rendered a material conflict of interest relating to the state investment adviser, federal covered adviser, an employee of the state investment adviser or federal covered adviser, or the investment adviser representative that could reasonably be expected to impair the rendering of unbiased and objective advice, including:

(A) compensation arrangements connected with advisory services to a client if the arrangements are in addition to compensation from the client for those services; and

(B) charging a client an advisory fee for rendering advice when a commission for executing securities transactions according to that advice will be received by the adviser or the employees or investment adviser representatives of the adviser;

(12)            guaranteeing a client that a specific investment result will be achieved with the advice given;

(13)            publishing, circulating, or distributing an advertisement that does not comply with 17 C.F.R. 275.206(4) - 1 adopted under 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers Act of 1940), as that regulation exists on or after the effective date of this Act;

(14)            disclosing the identity, affairs, or investments of a client unless required by law or unless consented to by the client;

(15)            taking action, directly or indirectly, with respect to securities or funds in which a client has a beneficial interest if the state investment adviser or federal covered adviser has custody or possession of the securities or funds and the adviser’s action does not comply with the requirements of 17 C.F.R.  275.206(4) - 2 adopted under 15 U.S.C. 80b-1 - 80b-2 (Investment Advisers Act of 1940) , as that regulation exists on or after the effective date of this Act;

(16)  entering into, extending, or renewing an investment advisory contract unless the contract is in writing and discloses in substance (A)  the services to be provided;
(B)  the term of the contract;


(C)  the advisory fee, the formula for computing the fee, whether the fee is negotiable, and the amount of the prepaid fee to be returned in the event of contract termination or nonperformance;


(D)  whether the contract grants discretionary power to the adviser; and (E)  that an assignment of the contract may not be made by a state investment adviser without the consent of the other party to the contract; in this subparagraph, “assignment” includes a direct or indirect transfer or hypothecation of an investment advisory contract by the assignor or of a controlling block of the assignor’s outstanding voting securities by a security holder of the assignor, but, if the adviser is a partnership, an assignment of an investment advisory contract is not considered to result from the death or withdrawal of a minority of the partners of the adviser having only a minority interest in the business of the adviser, or from the admission to the adviser of one or more partners who, after admission, will be only a minority of the partners and will have only a minority interest in the business;


(17)  failing, in violation of 15 U.S.C. 80b-4a (Investment Advisers Act of 1940), to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material nonpublic information;


(18)  entering into, extending, or renewing an advisory contract that
would violate 15 U.S.C. 80b-5 (Investment Advisers Act of 1940); this paragraph applies to all state investment advisers registered or required to be registered under this chapter and to all investment adviser representatives registered or required to be registered under this chapter, notwithstanding whether the adviser or representative would be exempt from federal registration under 15 U.S.C. 80b- 3 (Investment Advisers Act of 1940);

(19)  including in an advisory contract a condition, stipulation, or provision binding a person to waive compliance with a provision of this chapter or 15 U.S.C. 80b-1 - 80b-21 (Investment Advisers Act of 1940); or engaging in a practice that would violate 15 U.S.C. 80b-15 (Investment Advisers Act of 1940);


(20)  engaging in an act, a practice, or a course of business that is fraudulent, deceptive, or manipulative in contravention of 15 U.S.C. 80b-6(4) (Investment Advisers Act of 1940) and the rules adopted under that act, notwithstanding the fact that the state investment adviser may not be registered or required to be registered under 15 U.S.C. 80b-3 (Investment Advisers Act of 1940);


(21)  engaging in conduct or an act, either indirectly or through or by another person, that would be unlawful for the person to do directly under this chapter or a regulation adopted under this chapter;


(22)  acting as principal for the person’s own account, knowingly selling a security to or purchasing a security from a client, acting as broker for a person other than the client, or knowingly effecting a sale or purchase of a security for the account of the client without disclosing to the client in writing before the completion of the transaction the capacity in which the person is acting and without obtaining the written consent of the client to the transaction; the prohibitions in this paragraph do not apply to a transaction with a customer of a broker-dealer if the broker-dealer is not acting as a state investment adviser or federal covered adviser in relation to the transaction.  (b)  The conduct prohibited by (a) of this section is not the exclusive conduct prohibited by (a) of this section.  Engaging in other similar conduct, including nondisclosure, incomplete disclosure, or a deceptive practice, is considered unethical practice or conduct under AS 45.55.060(a)(7). The federal statutory and regulatory provisions referred to in this section apply to a state investment adviser and a registered investment adviser representative of either a state investment adviser or a federal covered adviser, regardless of whether the federal provisions limit their application to state investment advisers or federal covered advisers subject to federal registration.  With respect to a federal covered adviser, the provisions of this section apply only to the extent permitted under P.L. 104 - 290, 101 Stat. 3416 - 3440 (National Securities Markets Improvement Act of 1996) and only when the conduct proscribed involves fraud or deceit within the meaning of AS 45.55.010(a) and 45.55.020(a).

Sec. 45.55.025.  Fraudulent, dishonest, and unethical business practices of
broker-dealers and agents. 

A broker-dealer and an agent shall observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business.  The acts and practices that are contrary to those standards and principles, that constitute dishonest or unethical practices in the securities business under AS 45.55.060(a), and that are grounds for imposition of administrative fines, censure, denial, suspension, revocation of a registration, or  other appropriate disciplinary action include:

(1)  engaging in a pattern of unreasonable and unjustifiable delays in the delivery of securities purchased by the broker-dealer’s customers or in the payment upon request of free credit balances reflecting completed transactions of the broker-dealer’s customers;
(2)  inducing in a customer’s account trading that is excessive in size or frequency in view of the financial resources and character of the account;
(3)  recommending to a customer the purchase, sale, or exchange of a security without reasonable grounds to believe that the transaction or recommendation is suitable for the customer based on reasonable inquiry concerning the customer’s investment objectives, financial situation, and needs, and other relevant information known by the broker-dealer or agent;


(4)  executing a transaction on behalf of a customer without authorization to execute the transaction;


(5)  exercising discretionary power in effecting a transaction for a customer’s account without first obtaining written discretionary authority from the customer unless the discretionary power relates solely to the time or price for the execution of orders;


(6)  executing a transaction in a margin account without securing from the customer a properly executed written margin agreement promptly after the initial transaction in the account;


(7)  failing to segregate a customer’s free securities or securities held in safekeeping;


(8)  hypothecating a customer’s securities without having a lien on the securities unless the broker-dealer or agent receives from the customer a properly executed written consent promptly after the initial transaction, except as permitted by the rules of the United States Securities and Exchange Commission;


(9)  entering into a transaction with or for a customer at a price not reasonably related to the current market price of the securities or receiving an unreasonable commission or profit;
(10)  failing to furnish to a customer purchasing securities in a registered offering a final or preliminary prospectus no later than the date of confirmation of the transaction and, if the prospectus is preliminary, failing to furnish a final prospectus within a reasonable time after the effective date of the offering;


(11)  charging unreasonable or inequitable fees for services performed, including fees for miscellaneous services, such as the collection of money due for principal, dividends, or interest, the exchange or transfer of securities, appraisals, safekeeping, the custody of securities, and other services related to the broker-dealer’s securities business;


(12)  offering to buy from or sell to a person a security at a stated price unless the broker-dealer is prepared to purchase or sell at that price and under the conditions that are stated at the time of the offer to buy or sell;


(13)  representing that a security is being offered to a customer at market price or at a price relevant to the market price unless the broker-dealer or agent knows or has reasonable grounds to believe that a market for the security exists other than that made, created, or controlled by (A)  the broker-dealer;


(B)  a person for whom the broker-dealer is acting or with whom the broker-dealer is associated in the distribution of the security; or


(C) a person controlled by, controlling, or under common control with the broker-dealer;


(14)  effecting a transaction in, or inducing the purchase or sale of, a security by means of a manipulative, deceptive, or fraudulent device, practice, plan, program, design, or contrivance, including
(A)  effecting a transaction in a security that does not involve a change in the beneficial ownership;


(B)  entering an order for the purchase or sale of security with the knowledge that another order of substantially the same price for the sale of the same security has been or will be entered by or for the same or different parties for the purpose of creating a false or misleading appearance of active trading in the security or a false or misleading appearance with respect to the market for the security; nothing in this subparagraph prohibits a broker-dealer from entering a bona fide agency cross transaction for its customers as long as the cross transaction is noted on the confirmation and monthly account statements;


(C) effecting alone or with one or more other persons a series of transactions in a security creating actual or apparent active trading in the security or raising or depressing the price of the security for the purpose of inducing the purchase or sale of the security by others;


(15)  guaranteeing a customer against risk or loss in a securities account of the customer carried by the broker-dealer or in a securities transaction effected by the broker-dealer or agent with or for the customer;


(16)  publishing or circulating or causing to be published or circulated a notice, a circular, an advertisement, a newspaper article, an investment service, or a communication of any kind that purports to


(A)  report a transaction as a purchase or sale of a security unless the broker-dealer or agent believes that the transaction described was a bona fide purchase or sale of the security; or


(B)  quote the bid price or asked price for a security unless the broker-dealer believes that the quotation represents a bona fide bid for, or offer of, the security;


(17)  making a written or oral advertising or sales presentation that is in any manner deceptive or misleading, including


(A)  distributing nonfactual data or material, or making a presentation that is based on conjecture or unfounded or unrealistic claims or assertions, in a brochure, flyer, or other display by words, pictures, graphs, or other method designed to supplement, detract from, supersede, or defeat the purpose or effect of a prospectus or disclosure;


(B)  using supplementary material in connection with the offer of a particular security if the information in the material is not consistent with or adequately supported by the prospectus or is not filed as part of the registration statement;


(C)   using supplementary material not authorized by the issuer in connection with the offer of a particular security when a prospectus or other offering document required to be delivered in  connection with the offer specifically states that supplementary material is not authorized;

(18)  failing to disclose that the broker-dealer or agent is affiliated with the issuer of a security before entering into a contract with or for a customer for the purchase or sale of the security and, if the disclosure is made orally, failing to provide to the customer written disclosure before the completion of the transaction;

(19)  failing to make a bona fide offering of all of the securities allotted to a broker-dealer for distribution, whether acquired as an underwriter or a selling group member or from an underwriting or a selling group member participating in the distribution as an underwriter or selling group member;


(20)  failing or refusing to furnish to a customer, upon reasonable request, information to which the person is entitled or failing or refusing to respond to a formal written request, demand, or complaint;


(21)  being found by a court or an administrative proceeding of competent jurisdiction to have violated the anti-fraud or registration provisions of federal securities laws or of the securities law of a state;


(22)  marking an order ticket or confirmation as unsolicited when, in fact, the transaction was solicited;


(23)  in connection with the solicitation of a sale or purchase of an over-the-counter non-NASDAQ security, failing to provide promptly the most current prospectus or the most recent periodic report filed under 15 U.S.C. 78m (Securities Exchange Act of 1934), when requested to do so by a customer;


(24)  failing to provide to a customer for a month in which activity has occurred in a customer’s account, but in no event less than every three months, a statement of account that contains a value for each over-the-counter non-NASDAQ equity security based on the closing market bid on a certain date; this paragraph applies only if the broker-dealer has been a market maker in that security at any time during the month in which the monthly or quarterly statement is issued;


(25)  failing to maintain lists of persons who have informed the broker-dealer that the persons do not want to be solicited;


(26)  conducting business by telephone at unreasonable times;


(27)  failing to disclose to a person purchasing shares of an investment company on the premises of an insured depository institution that the investment is not covered by the Federal Deposit Insurance Corporation; or (28)  failing to comply with an applicable provision of the Conduct Rules of the National Association of Securities Dealers, Inc., or applicable fair practices or ethical standards adopted by the United States Securities and Exchange Commission or by a self-regulatory organization approved by the United States Securities and Exchange Commission.

Sec. 45.55.027.   Additional fraudulent, dishonest, and unethical business practices of agents.

In addition to the acts and practices described in AS 45.55.025, the acts and practices of an agent that constitute dishonest or unethical practices in the securities business under AS 45.55.060(a), that are grounds for imposition of administrative fines, censure, denial, suspension, revocation of a registration, or other appropriate disciplinary action, and that are contrary to the high standards of commercial honor and just and equitable principles of trade to be observed by agents, include:

(1)  engaging in the practice of lending to or borrowing money or securities from a customer or acting as a custodian for money, securities, or an executed stock power of a customer;

(2)  effecting securities transactions not recorded on the regular books and records of the broker-dealer that the agent represents unless the transactions are authorized in writing by the broker-dealer before execution of the transactions;

(3)  establishing or maintaining an account containing fictitious information in order to execute transactions that would otherwise be prohibited;

(4)  sharing directly or indirectly in profits and losses in the account of a customer without the written authorization of the customer and the broker- dealer that the agent represents;

(5)  dividing or otherwise splitting the agent’s commissions, profits, or other compensation from the purchase and sale of securities with a person who is not also registered in this state as an agent for the same broker-dealer or as a broker-dealer under direct or indirect common control of the broker-dealer or agent unless the person is not required to be registered in order to engage in the securities business in this state;

(6)  failing to disclose to a customer or prospective customer at the time of the first contact with the customer or prospective customer the name of the registered entity if different from the name under which the agent is doing business;

(7)  contacting a person who has requested to be placed on a list of persons who do not want to be contacted by the broker-dealer.

Sec. 45.55.028.  Practices of broker-dealers and agents considered fraudulent. 

Acts and practices of broker-dealers or agents that are considered fraudulent or deceitful acts, practices, or courses of business under AS 45.55.010(a) include

(1)  entering into a transaction with a customer with regard to a security at an unreasonable price or at a price not reasonably related to the current market price of the security or receiving an unreasonable commission, markup, or profit;

(2)  contradicting or negating the importance of information contained in a prospectus or other offering material with the intent to deceive or mislead, or using an advertising or sales presentation in a deceptive or misleading manner, including using supplementary material that does not consistently reflect or is not supported by information presented in prospectus or offering material required to be delivered in connection with the offer;

(3)  in connection with the offer, sale, or purchase of a security, falsely misleading a customer to believe that the broker-dealer or agent possesses material, nonpublic information that would affect the value of the security;

(4)  in connection with the solicitation of a sale or purchase of a security, engaging in a pattern or practice of making contradictory recommendations to different investors with similar investment objectives for  some to sell and others to purchase the same security, at or about the same time, when not justified by the particular circumstances of each investor;

(5)  failing to make a bona fide public offering in accordance with an underwriting agreement of all the securities allotted to a broker-dealer for distribution by using methods such as

(A) transferring securities to a customer, another broker- dealer, or a fictitious account with the understanding that the securities will be returned to the broker-dealer or its nominees; or

(B) parking or withholding securities;

(6)  with respect to transactions in securities sold in the over-the- counter market other than those securities listed in the NASDAQ National Market System,

(A) conducting sales contests in a particular security;

  1. failing or refusing to promptly execute sell orders after a solicited purchase by a customer;

(C) soliciting a secondary market transaction when there has not been a bona fide distribution in the primary issuer market;
(D) engaging in a pattern of compensating an agent in different amounts for effecting sales and purchases in the same security;

(7)  effecting a transaction in or inducing the purchase or sale of a security by means of any manipulative, deceptive, or other fraudulent device or contrivance, including the use of boiler room tactics or the use of fictitious accounts; in this paragraph, “boiler room tactics” includes high-pressure sales tactics that have the effect of creating an artificially short period in which the investor must make a decision or that are designed to overcome a customer’s reluctance to make an investment, including

(A) the use of intensive telephone campaigns or unsolicited calls to persons who are not known by or who do not have an account with the agent or broker-dealer and in which the person is encouraged to make a hasty decision to buy without regard to the person’s investment needs and objectives;

(B) the use of scripts designed to meet the customer’s objections;

(C)  repeated phone calls;

(D) phone calls designed to entrap the customer;

(E) threatening tones on the telephone informing the customer that there is little time within which to make a decision;

(8)  failing to comply with a prospectus delivery requirement adopted under federal law;

(9)  making a false, misleading, deceptive, or exaggerated representation or prediction in the solicitation or sale of a security, including a statement that

(A) the security will be resold or repurchased;

(B) the security will be listed or traded on an exchange or established market;
           
            (C)purchasing the security will result in an assured,   immediate, or extensive          increase in value, future market price, or return on        investment; or

(D) refers to the issuer’s financial condition, anticipated earnings, potential growth, or success;

(10)            failing to disclose to a customer that the broker-dealer or agent is acting as an agent for both the customer and another person; or

(11)            effecting a transaction on terms and conditions other than those stated by the confirmation.

Sec. 45.55.925. Criminal penalties.

(a)  In addition to the civil penalties assessed under AS 45.55.920, a person who wilfully violates a provision of this chapter except AS 45.55.030(e), 45.55.040(h), 45.55.075, or 45.55.160, or who wilfully violates a regulation or order under this chapter, or who wilfully violates AS 45.55.160 knowing the statement made to be false or misleading in a material respect or the omission to be misleading by any material respect, upon conviction, is punishable by a fine of not more than $5,000, or by imprisonment for not less than one year nor more than five years, or both.  Upon conviction of an individual for a felony under this chapter, imprisonment for not less than one year is mandatory.  However, an individual may not be imprisoned for the violation of a regulation or order if the individual proves that the individual had no knowledge of the regulation or order.  An indictment or information may not be returned under this chapter more than five years after the alleged violation. 
(b)  The administrator may refer the evidence that is available concerning violations of this chapter or a regulation or order under this chapter to the attorney general who may, with or without a reference, institute appropriate criminal proceedings under this chapter.
(c)  Nothing in this chapter limits the power of the state to punish a person for conduct that constitutes a crime by statute or at common law.

Sec. 45.55.930. Civil liability to buyers. 

(a)  A person is liable to the person buying the security from the person for the consideration paid for the security, together with interest at eight percent a year or the stated rate of the security if the security has a stated, fixed rate less than eight percent, from the date of payment, costs, and reasonable attorney fees, less the amount of income received on the security, on the tender of the security, or for damages if the buyer no longer owns the security, if the seller offers or sells a security

(1)        other than a federal covered security, in violation of AS 45.55.030(a), 45.55.070, or 45.55.170(b) or of a regulation or order under AS 45.55.150 that requires the filing of sales literature before it is used, or of a condition imposed under AS 45.55.100(d) or 45.55.110(g) or (h), or

(2)        by means of an untrue statement of a material fact, or omits to state a material fact, the omission of which makes a statement misleading.  (b)  Damages are the amount that would be recoverable on a tender less the value of the security when the buyer disposed of it and interest at eight percent a year, or the stated rate of the security if the security had a stated, fixed rate less than eight percent, from the date of disposition.  ©  Every person who directly or indirectly controls a seller liable under (a) of this section, every partner, officer, or director of such a seller, every person occupying a similar status or performing similar functions, every employee of the seller who materially aids in the sale, and every broker-dealer or agent who materially aids in the sale are also liable jointly and severally with and to the same extent as the seller, unless the nonseller who is liable sustains the burden of proof that the nonseller did not know, and in exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist.  There is contribution as in cases of contract among the several persons liable.

(d)  A tender specified in this section may be made at any time before entry of judgment.
(e)  Every cause of action under this chapter survives the death of a person who might have been a plaintiff or defendant.

(f)  A person may not sue under this section more than three years after the contract of sale, except as otherwise provided in this subsection.  For a violation of (a)(2) of this section or AS 45.55.010, an action under this section may be brought within three years after the  sale or two years after the person bringing the action discovered or should have discovered the facts on which the action is based, whichever is later.  Failure to bring an action on a timely basis is an affirmative defense.  A person may not sue under this section if the buyer received

(1)  a written offer, before suit and at a time when the buyer owned the security, to refund the consideration paid together with interest at eight percent a year, or the stated rate of the security if the security has a stated, fixed rate less than eight percent, from the date of payment, less the amount of income received on the security, and the buyer failed to accept the offer within 30 days of its receipt, or

(2)  the offer before suit and at a time when the buyer did not own the security unless the buyer rejected the offer in writing within 30 days of its receipt.

(g)  A person who makes or engages in the performance of a contract in violation of a provision of this chapter or a regulation or an order under this chapter, or who acquires a purported right under the contract with knowledge of the facts by reason of which its making or performance is in violation of this chapter, may not base a suit on the contract.

(h)  A condition, stipulation, or provision binding a person acquiring a security to waive compliance with a provision of this chapter or a regulation or order under this chapter is void.

(i)   The rights and remedies provided by this chapter are in addition to any other rights or remedies that may exist, but this chapter does not create a cause of action not specified in this section or AS 45.55.040(f).

(j)   Notwithstanding the time limitation in (f) of this section, an action under this section may be started after receipt of a written offer described in (a) of this section if the buyer accepted the payment offer within 30 days after receipt of the offer and has not been paid the full amount offered.

(k)  An offer to repay the buyer under this section involves the offer or sale of a security, and the transaction must be registered under this chapter or exempt from registration under AS 45.55.900.


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The above is not the complete act. This page contains only certain sections of the statute which we believe you may find informative. We do not and cannot guarantee the above sections are current law in this state. Legislatures may enact revised statutes at any time. Moreover these sections are presented for informational purposes only and are presented "as is" with all faults and with no warranties or guarantees as to the accuracy. Further, The content on these pages are not offered or intended to be legal advice by this firm for any purpose or manner whatsoever. If you require the current and complete version of the Law in your state, you should visit the Legislature home page of the particular state for more information or contact an attorney for advice on obtaining such information.

 

 
 
 
 

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