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Law Offices of Eric Norstedt, P.A.
2924 Davie Road, Suite 200
Davie, Florida, 33314
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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

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Selected Sections of the

Georgia Securities Act

 

Sections included on the Georgia Securities Act Page:

DEFINITIONS

10-5-2.
(a) As used in this chapter, the term:
(1) 'Accredited investor' shall have such meaning as the commissioner may by rule or regulation specify.
(2) 'Affiliate' or 'person affiliated with' means, when used with reference to a specified person, a person who directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the person specified. Any beneficial owner of 20 percent or more of the combined voting power of all classes of voting securities of a person or any executive officer, director, trustee, or general partner of a person is an affiliate of such person unless the shareholder, executive officer, director, trustee, or general partner shall prove that he in fact does not control, is not controlled by, and is not under common control with such person.
(3) 'Assignment,' with respect to an investment advisory contract, means any direct or indirect transfer or hypothecation of an investment advisory contract by the assignor or any such transfer or hypothecation of a controlling block of the assignor´s outstanding voting securities by a security holder of the assignor; provided, however, that, if an investment adviser is a partnership, no assignment of an investment advisory contract is considered to result from the death or withdrawal of a minority of the members of the investment adviser who have only a minority interest in the business of the investment adviser or from the admission to the investment adviser of one or more members who, after admission, will be only a minority of the members and will have only a minority interest in the business.
(4) 'Beneficial owner' means, with regard to any securities, any person who owns the securities or who enjoys benefits substantially equivalent to ownership. A person´s beneficial ownership of securities shall be deemed to include, but shall not be limited to, any securities owned by:
(A) His spouse;
(B) His minor children;
(C) Any revocable trust of which he is a settlor;
(D) Any trust of which he, his spouse, or his minor children have an aggregate vested beneficial interest of 20 percent or more in the income or the corpus;
(E) Any partnership in which he is a general partner;
(F) Any corporation of which he is the beneficial owner of 20 percent or more of the outstanding voting securities or of which he is an executive officer if the corporation has no substantial business other than investment in securities; or
(G) Any ancestor, sibling, or lineal descendant of his who resides in his home.
(5) 'Blank check offering' means an offering of securities by an issuer which has not had any substantial gross revenues from the sale of products or services or any substantial net income from any source for its latest fiscal year, which offering does not disclose the industry in which the issuer will make asset or business acquisitions or does not disclose guidelines under which such acquisitions will be made.
(6) 'Commissioner' means the commissioner of securities of this state.
(7) 'Control' (including 'controlling,' 'controlled by,' and 'under common control with') means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.
(8) 'Dealer' means every person, other than a salesman registered under this chapter, who engages, either for all or part of his time, directly or indirectly, as agent, broker, or principal in the business of offering, buying, selling, or otherwise dealing or trading in securities issued by another person but does not include a bank or trust company, or any person insofar as such person buys or sells securities for his own account, either individually or in some fiduciary capacity, other than as a part of a regular business, and does not include any general partner, or executive officer of any general partner, of an issuer or executive officer of an issuer offering or selling securities of such issuer unless he is paid a commission for the sale of such securities. Any remuneration paid which is directly related to the sale of securities shall be considered a commission for the purposes of this paragraph.
(9) 'Designated dealer' means a dealer or limited dealer as respectively defined in paragraphs (8) and (17) of this subsection:
(A) Whose commissions, commission equivalents, and markups from transactions in designated securities for one of the immediately preceding three months or for two or more of the immediately preceding 12 months exceeded 5 percent of its total commissions, commission equivalents, and markups from transactions in securities during those months; or
(B) Who has been a market maker in the designated security that is the subject of the transaction in the immediately preceding 12 months.
(10) 'Designated salesman' means a salesman or limited salesman as respectively defined in paragraphs (25) and (18) of this subsection who is employed, appointed, or authorized by a designated dealer or by an issuer to sell designated securities.
(11) 'Designated security' means any equity security the selling price of which is less than $5.00 (provided, however, if the designated security is a unit composed of one or more securities, that the unit price divided by the number of components of the unit other than warrants, options, rights, or similar securities must be less than $5.00 and that any component of the unit that is a warrant, option, right, or similar security, or a convertible security, must have an exercise price or conversion price of less than $5.00). 'Designated security' shall not include a security:
(A) Registered, or approved for registration upon notice of issuance, on a national securities exchange that makes transaction reports available pursuant to Exchange Act Rule 11Aa3-1, as promulgated by the United States Securities and Exchange Commission (17 CFR 11Aa3-1);
(B) Authorized, or approved for authorization upon notice of issuance, for quotation on the National Association of Securities Dealers Automated Quotation (NASDAQ) System;
(C) Issued by an investment company registered under the Investment Company Act of 1940 (15 U.S.C. .8a-1, et seq., as amended);
(D) Which is a put option or call option issued by the Options Clearing Corporation; or
(E) Whose issuer has net tangible assets in excess of $2 million, as demonstrated by financial statements dated less than 15 months previously that the designated dealer has reviewed and has a reasonable basis to believe are true and complete in relation to the date of the transaction with the person, and:
(i) In the event the issuer is other than a foreign private issuer, are the most recent financial statements for the issuer that have been audited and reported on by an independent public accountant in accordance with the provisions of Rule 210.2-02, as promulgated by the United States Securities and Exchange Commission (17 CFR 210.2-02); or
(ii) In the event the issuer is a foreign private issuer, are the most recent financial statements for the issuer that have been filed with the United States Securities and Exchange Commission; furnished to the United States Securities and Exchange Commission pursuant to SEC Rule 12g3-2(b) (17 CFR 240.12g3-2(b)); or prepared in accordance with generally accepted accounting principles in the country of incorporation, audited in compliance with the requirements of that jurisdiction, and reported on by an accountant duly registered and in good standing in accordance with the regulations of that jurisdiction.
(12) 'Established customer' means any person for whom the dealer or limited dealer, or a clearing broker-dealer on behalf of such dealer or limited dealer, carries an account, and who with such dealer or limited dealer:
(A) Has effected a securities transaction, or made a deposit of funds or securities, more than one year prior to the date of determination; or
(B) Has made three purchases of designated securities that occurred on separate days and involved different issuers.
(13) 'Executive officer' means the chief executive officer, the president, the principal financial officer, the principal operating officer, each vice president with responsibility involving policy-making functions for a significant aspect of a person´s business, the secretary, the treasurer, or any other person performing similar functions with respect to any organization, whether incorporated or unincorporated.
(13.1) 'Federal covered adviser' means a person who is registered with the Securities and Exchange Commission pursuant to Section 203 of the federal Investment Advisers Act of 1940.
(13.2) 'Federal covered security' means any security that is a covered security under Section 18(b) of the Securities Act of 1933 or regulations promulgated thereunder.
(14) 'Investment adviser' means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities. As used in this chapter, the term 'certified public accountant' means a certified public accountant or a firm thereof, registered pursuant to Chapter 3 of Title 43. 'Investment adviser' shall also include any person who holds himself or herself out as a 'financial planner' or 'investment adviser' other than a certified public accountant. The term 'investment adviser' does not include a person who is excluded from the definition of 'investment adviser' under Section 202(a)(11) of the federal Investment Advisers Act of 1940; a 'federal covered adviser' as defined in paragraph (13.1) of this subsection; or a certified public accountant whose performance of investment advisory services is solely incidental to the practice of his or her profession or who does not accept or receive, directly or indirectly, any commission, payment, referral, or other form of remuneration as a result of the purchase or sale of a specific security by a client, does not recommend the purchase or sale of specific securities, and does not have custody of client funds or securities for investment purposes. A person shall not be considered an investment adviser solely as a result of using a nationally recognized designation such as Certified Financial Planner, Chartered Financial Consultant, Personal Financial Specialist, or a similar designation as determined by the office of Secretary of State. Unless a person holds himself or herself out as such, the term 'investment adviser' also does not include (i) an investment adviser representative; (ii) a lawyer, engineer, or teacher whose performance of investment advisory services is solely incidental to the practice of his or her profession; (iii) a securities dealer or his or her agent whose performance of these services is solely incidental to the conduct of his or her business as a securities dealer and who receives no special compensation for such services; (iv) a publisher of any newspaper, news column, newsletter, news magazine, or business or financial publication or service, whether communicated in hard copy form, by electronic means, or otherwise, that does not consist of the rendering of advice on the basis of the specific situation of each client; or (v) such other persons not within the intent of this paragraph as the commissioner may designate by rule or order.
(15) 'Investment adviser representative' means:
(A) With respect to an investment adviser, any individual, other than an investment adviser, who is a partner, officer, or director (or a person occupying a similar status or performing similar functions) of an investment adviser or any other individual who, on behalf of an investment adviser, engages in the business of advising others as to the value of securities or as to the advisability of investing in, purchasing, or selling securities or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities; or
(B) With respect to a federal covered adviser, any individual defined as an 'investment adviser representative' by Rule 203A-3 of the Securities and Exchange Commission under the federal Investment Advisers Act of 1940, Section 275.203A, provided such representative has a 'place of business,' as defined by Rule 203A-3, in this state.
(16) 'Issuer' means every person who issues or proposes to issue any security, except that, with respect to certificates of deposit, voting-trust certificates, or collateral-trust certificates or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors (or persons performing similar functions) or of the fixed, restricted management, or unit type, the term 'issuer' means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which such securities are issued; except that, in the case of an unincorporated association which provides by its articles for limited liability of any or all of its members or in the case of a trust, committee, or other legal entity, the trustees or members thereof shall not be individually liable as issuers of any security issued by the association, trust, committee, or other legal entity; except that, with respect to equipment-trust certificates or like securities, the term 'issuer' means the person by whom the equipment or property is or is to be used; and except that, with respect to fractional undivided interests in oil, gas, or other mineral rights, the term 'issuer' means the owner of any such right or of any interest in such right (whether whole or fractional) who creates fractional interests therein for the purpose of public offering.
(17) 'Limited dealer' means a dealer who is authorized under this chapter to act as a dealer only with respect to a certain issue of or a certain class or type of securities specified by the commissioner.
(18) 'Limited salesman' means a salesman who is authorized under this chapter to sell or offer for sale only a certain issue of or a certain class or type of securities specified by the commissioner. A limited salesman may be authorized to sell or offer for sale securities of one or more issuers either concurrently or successively, provided such issuers are affiliates and provided, further, that one of such issuers shall enter into and file with the commissioner a written agreement which shall provide that such issuer shall be primarily responsible for supervising the limited salesman and shall assume all duties, responsibilities, and liabilities imposed by this chapter for the securities transactions of the limited salesman to the same extent as if the limited salesman were only registered with respect to such issuer. Nothing in such agreement shall relieve any issuer on whose behalf the limited salesman is acting of the responsibilities imposed upon such issuer by this chapter for the securities transactions of the limited salesman.
(19) 'Majority owned subsidiary' means a subsidiary more than 50 percent of whose outstanding securities representing the right, other than as affected by events of default, to vote for the election of directors is owned by the subsidiary´s parent, by one or more of the parent´s other majority owned subsidiaries, or by the subsidiary´s parent and one or more of the parent´s other majority owned subsidiaries.
(20) 'Market maker' means any specialist permitted to act as a dealer, any dealer acting in the capacity of block positioner, and any dealer who, with respect to a security, holds himself out (by entering quotations in an inter-dealer communications system or otherwise) as being willing to buy and sell such security for his own account on a regular or continuous basis.
(21) 'Parent' means, when used with reference to a specified person, an affiliate controlling such person directly, or indirectly through one or more intermediaries.
(22) 'Person' means an individual, a corporation, a partnership, a limited liability company, an association, a joint-stock company, a trust, or any unincorporated organization.
(23) 'Prospectus' means any prospectus, notice, circular, advertisement, sales literature, letter, offering circular, offering sheet, or communication, written or by radio or television, which offers any security for sale or which is used in connection with any such offer or which confirms the sale of any security, except that:
(A) A confirmation of the sale of a security which is sent or given after the effective date of the registration statement shall not be deemed a prospectus if it is proved that prior to or at the same time with such confirmation a written prospectus, meeting the requirements of paragraph (3) of subsection (b), paragraph (3) of subsection (e), or paragraph (4) of subsection (f) of Code Section 10-5-5 as appropriate to form of registration under this chapter, at the time of such confirmation, was sent or given to the person to whom the confirmation was sent or given; and
(B) A notice, circular, advertisement, sales literature, letter, or communication in respect of a security shall not be deemed to be a prospectus if it states from whom a written prospectus meeting the requirements of paragraph (3) of subsection (b), paragraph (3) of subsection (e), or paragraph (4) of subsection (f) of Code Section 10-5-5 may be obtained and, in addition, does no more than identify the security, state the price thereof, state by whom orders will be executed, and contain such other information as the commissioner, by rules or regulations, deemed necessary or appropriate in the public interest and for the protection of investors, and subject to such terms and conditions as may be prescribed therein, may permit.
(24) 'Sale' or 'sell' means and shall include every contract of sale or disposition of a security or interest in a security for value. The term 'offer to sell,' 'offer for sale,' or 'offer' shall include every attempt or offer to dispose of or solicitation of an offer to buy a security or interest in a security for value. The terms defined in this paragraph shall not include preliminary negotiations or agreements between an issuer or any person on whose behalf an offering is to be made and any underwriter or among underwriters who are or are to be in privity of contract with an issuer or any person on whose behalf an offering is to be made. Any security given or delivered with or as a bonus on account of any purchase of securities or any other thing shall be conclusively presumed to constitute a part of the subject of such purchase and to have been offered and sold for value. The issue or transfer of a right or privilege, when originally issued or transferred with a security, giving the holder of such security the right to convert such security into another security of the same issuer or of another person or giving a right to subscribe to another security of the same issuer or of another person, which right cannot be exercised until some future date, shall not be deemed to be an offer or sale of such other security; but the issue or transfer of such other security upon the exercise of such right of conversion or subscription shall be deemed a sale of such other security.
(25) 'Salesperson' means an individual, other than a dealer or limited dealer registered under this chapter, employed or appointed or authorized by a dealer, limited dealer, or issuer to sell securities in this state. The general partners or executive officers of a dealer or a limited dealer engaged in the offer or sale of securities and any general partners of an issuer or executive officers of any general partner of an issuer or executive officers of an issuer offering or selling securities of such issuer shall not be deemed to be salespersons within the meaning of this definition unless they are paid a commission for the sale of such securities. Any remuneration paid which is directly related to the sale of securities shall be considered a commission for the purposes of this paragraph. The term 'salesperson' does not include an individual who represents a dealer in effecting only transactions in this state which are described in Section 15(h)(2) of the Securities Exchange Act of 1934 or an individual who represents an issuer in effecting transactions in a federal covered security as described in Sections 18(b)(3) or 18(b)(4)(D) of the Securities Act of 1933.
(26) 'Security' means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of indebtedness, investment certificate, certificate of interest or participation in any profit-sharing agreement, certificate of interest in oil, gas, or other mineral rights, collateral trust certificates, preorganization certificate or subscription, transferable share, investment contract, viatical investment, voting-trust certificate, limited partnership interest, or beneficial interest in profits or earnings, or any other instrument commonly known as a security, including any certificate of interest or participation in, temporary or interim certificate for, receipt for, guaranty of, or warrant or right to subscribe to or purchase, any of the foregoing. The term 'investment contract' shall include but is not limited to an investment which holds out the possibility of return on risk capital even though the investor´s efforts are necessary to receive such return if:
(A) Such return is dependent upon essential managerial or sales efforts of the issuer or its affiliates;
(B) One of the inducements to invest is the promise of promotional or sales efforts of the issuer or its affiliates in the investor´s behalf; and
(C) The investor shall thereby acquire the right to earn a commission or other compensation from sales of rights to sell goods, services, or other investment contracts of the issuer or its affiliates.
Security shall not mean any insurance or endowment policy or annuity contract under which an insurance company promises to pay a fixed number of dollars either in a lump sum or periodically for life or some other specified period nor any variable annuity contract as provided for and regulated under Title 33 and issued by a life insurance company licensed to do business in the State of Georgia nor shall it mean any interest in a residential unit and a rental management arrangement relating to such residential unit so long as the owner-participants under the rental management arrangement, whether optional or mandatory, do not participate directly in the income derived from the rental of units owned by others.
(27) 'Securities of the same class' means:
(A) All common stock of an issuer, regardless of varying series or designations, and all securities convertible into common stock or conferring the right to acquire common stock; or
(B) All preferred stock of an issuer, regardless of varying preferences, series, or designations, and all securities convertible into preferred stock or conferring the right to acquire preferred stock.
(28) 'Significant subsidiary' means a subsidiary meeting any one of the following conditions:
(A) The assets of the subsidiary or the investments in and advances to the subsidiary by its parent and the parent´s other subsidiaries, if any, exceed 10 percent of the assets of the parent and its subsidiaries on a consolidated basis.
(B) The sales and operating revenues of the subsidiary exceed 10 percent of the sales and operating revenues of its parent and the parent´s subsidiaries on a consolidated basis.
(C) The subsidiary is the parent of one or more subsidiaries and, together with such subsidiaries, would, if considered in the aggregate, constitute a significant subsidiary.
(29) 'State' means any state, territory, or possession of the United States, the District of Columbia, Puerto Rico, and the Virgin Islands.
(30) 'Subsidiary' means, when used with reference to a specified person, an affiliate controlled by such person, directly or indirectly, through one or more intermediaries.
(31) 'Underwriter' means any person who has purchased from an issuer or an affiliate of an issuer with a view to or offers or sells for an issuer or an affiliate of an issuer in connection with the distribution of any security or participates or has a direct or indirect participation in any such undertaking or participates or has a participation in the direct or indirect underwriting of any such undertaking; provided, however, that a person shall be presumed not to be an underwriter with respect to any securities which he has owned beneficially for at least one year; and provided, further, that a dealer shall not be considered an underwriter with respect to any securities which do not represent part of an unsold allotment to or subscription by the dealer as a participant in the distribution of such securities by the issuer or an affiliate of the issuer; provided, further, that, in the case of securities acquired on the conversion of another security without payment of additional consideration, the length of time such securities have been beneficially owned by a person shall include the period during which the convertible security was beneficially owned and the period during which the security acquired on conversion has been beneficially owned.
(32) 'Viatical investment' means the contractual right to receive any portion of the death benefit or ownership of a life insurance policy or certificate for consideration that is less than the expected death benefit of the life insurance policy or certificate. Viatical investment does not include:
(A) Any sale or transfer of any portion of the death benefit or ownership of a life insurance policy or certificate by the insured or policy owner to a viatical issuer or to any person or entity regularly engaged in the business of reselling or transferring such benefits to viatical issuers;
(B) The assignment of a life insurance policy to a bank, savings bank, savings and loan association, credit union, or other institution licensed under the laws of any state or the United States as collateral for a loan;
(C) The obtaining of accelerated benefits from the issuer pursuant to the terms of a life insurance policy issued in accordance with the laws of this or another state; or
(D) The sale or transfer of any portion of the death benefit or ownership of a life insurance policy by an individual who enters into no more than one agreement in a calendar year regarding the transfer of life insurance policies insuring the life of only one person for consideration that is less than the death benefit, unless any third party receives, directly or indirectly, any fee, commission, or other remuneration in connection with said assignment.
(33) 'Viatical issuer' means, in the case of a fractional or pooled interest in viatical investments, any person who creates, for the purpose of sale, the fractional or pooled interest, and in the case of a viatical investment that is not fractionalized or pooled, any person engaged in the business of effecting transactions in viatical investments. A viatical issuer pursuant to this Code section is an issuer within the definition contained in this Code section.
(b) The rules of statutory construction contained in Chapter 3 of Title 1 shall apply to this chapter.

10-5-4. Denial, suspension, or revocation of registration of dealer, salesman, investment adviser, or investment adviser representative; current financial statements

(a) The commissioner, by order, may deny, suspend, or revoke a registration, limit the securities or investment advisory activities that an applicant or registered person may perform in this state, bar an applicant or registered person from association with a registered dealer, limited dealer, or investment adviser, or bar a person who is a partner, officer, director, or a person occupying a similar status or performing a similar function for an applicant or registered person from employment with a registered dealer, limited dealer, or investment adviser, if the commissioner finds that the order is in the public interest and that the applicant or registered person or, in the case of a dealer, limited dealer, or investment adviser, a partner, officer, or director, a person occupying a similar status or performing similar functions, or a person directly or indirectly controlling the dealer, limited dealer, or investment adviser:
(1) Has filed an application for registration with the commissioner which, as of its effective date or any date after filing in the case of an order denying effectiveness, was incomplete in a material respect or contained a statement that was, in light of the circumstances under which it was made, false or misleading with respect to a material fact;
(2) Has willfully violated or willfully failed to comply with this chapter, a prior enactment, or a rule promulgated by the commissioner under this chapter or a prior enactment;
(3) Is the subject of an adjudication or determination, after notice and opportunity for hearing, within the last five years by a securities agency or administrator of another state or a court of competent jurisdiction that the person has willfully violated the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, the Commodity Exchange Act, or the securities law of another state, but only if the acts constituting the violation of that state´s law would constitute a violation of this chapter had the acts occurred in this state;
(4) Within the last ten years has been convicted of a felony or misdemeanor, which the commissioner finds:
(A) Involves the purchase or sale of a security, the taking of a false oath, the making of a false report, bribery, perjury, burglary, or conspiracy to commit any of the foregoing offenses;
(B) Arises out of the conduct of business as a dealer or limited dealer, investment adviser, financial institution, insurance company, or fiduciary; or
(C) Involves the larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulent concealment, embezzlement, fraudulent conversion, or misappropriation of funds or securities;
(5) Is permanently or temporarily enjoined by a court of competent jurisdiction from acting as an investment adviser, underwriter, dealer or limited dealer or as an affiliated person or employee of an investment company, depository institution, or insurance company or from engaging in or continuing conduct or practice in connection with any of the foregoing activities or in connection with the purchase or sale of a security;
(6) Is the subject of an order of the commissioner denying, suspending, or revoking the person´s registration as a dealer, limited dealer, salesman, limited salesman, investment adviser, or investment adviser representative;
(7) Is the subject of any of the following orders which are effective at the time of the commissioner´s order and were issued within five years before the commissioner´s order:
(A) An order by the securities agency or administrator of another state, a Canadian province or territory, or the Securities and Exchange Commission, entered after notice and opportunity for hearing, denying, suspending, or revoking the person´s registration as a dealer, limited dealer, salesman, limited salesman, investment adviser, or investment adviser representative, or the substantial equivalent of those terms as defined in this chapter;
(B) A suspension or expulsion from membership in or association with a member of a self-regulatory organization registered under the Securities Exchange Act of 1934 or the Commodity Exchange Act;
(C) A United States Postal Service fraud order;
(D) A cease and desist order entered after notice and opportunity for hearing by the commissioner, the securities agency or administrator of another state, a Canadian province or territory, the Securities and Exchange Commission, or the Commodity Futures Trading Commission; or
(E) An order by the Commodity Futures Trading Commission denying, suspending, or revoking registration under the Commodity Exchange Act;
(8) Has engaged in unethical or dishonest practices in the securities business, as defined in the rules and regulations of the commissioner;
(9) Is insolvent, either in the sense that liabilities exceed assets or in the sense that obligations cannot be met as they mature, but the commissioner may not enter an order against a dealer, limited dealer, or investment adviser under this paragraph without a finding of insolvency as to the dealer, limited dealer, or investment adviser;
(10) Is determined by the commissioner, in compliance with Code Section 10-5-3, not to be qualified on the basis of the lack of training, experience, and knowledge of the securities business;
(11) Has failed reasonably to supervise salesmen, limited salesmen, investment adviser representatives, or employees; or
(12) Has failed to pay the proper filing fee within 30 days after being notified by the commissioner of a deficiency, but the commissioner shall vacate an order under this paragraph when the deficiency is corrected.
(b) The commissioner may not begin a proceeding on the basis of a fact or transaction known to the commissioner when the registration became effective unless the proceeding is begun within 90 days after effectiveness of the registration.
(c) If the commissioner finds that an applicant or registered person is no longer in existence; has ceased to do business as dealer, salesman, limited dealer, limited salesman, investment adviser, or investment adviser representative; is adjudicated mentally incompetent or subjected to the control of a committee, conservator, or guardian; or cannot be located after reasonable search, the commissioner, by order, may deny the application or revoke the registration.
(d) The commissioner may at any time require a dealer, limited dealer, or investment adviser to file with him a financial statement showing the financial condition of such dealer, limited dealer, or investment adviser as of the most recent practicable date but such financial statement need not be certified.
(e) The commissioner, by order, may deny, suspend, deny renewal of, or revoke the registration of a salesperson or investment adviser representative upon notice to the commissioner by either a court of competent jurisdiction or the child support agency within the Department of Human Resources that the applicant for or holder of such a registration is not in compliance with an order for child support as defined in Code Section 19-6-28.1 or Code Section 19-11-9.3. Notwithstanding the provisions of Code Section 10-5-16, the hearings and appeals procedures provided in Code Section 19-6-28.1 or Code Section 19-11-9.3, where applicable, shall be the only such procedures required under this subsection.
(f) The commissioner, by order, may deny, suspend, deny renewal of, or revoke the registration of a salesperson or investment adviser representative upon notice to the commissioner by the Georgia Higher Education Assistance Corporation that the applicant for or holder of either such license is a borrower in default who is not in satisfactory repayment status as defined in Code Section 20-3-295. Notwithstanding the provisions of Code Section 10-5-16, the hearings and appeals procedures provided in Code Section 20-3-295, where applicable, shall be the only such procedures required under this subsection.

10-5-12.  Unlawful practices

(a) It shall be unlawful for any person:
(1) To offer to sell or to sell any security in violation of Code Section 10-5-3, 10-5-5, or 10-5-19 or any rule, regulation, or order promulgated or issued by the commissioner under this chapter;
(2) In connection with an offer to sell, sale, offer to purchase, or purchase of any security, directly or indirectly:
(A) To employ a device, scheme, or artifice to defraud;
(B) To 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
(C) To engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon a person;
(3) To offer or sell any security:
(A) Registered under subsection (b) of Code Section 10-5-5 by means of any prospectus except a prospectus which complies with paragraph (3) of subsection (b) of Code Section 10-5-5;
(B) Registered under subsection (e) of Code Section 10-5-5 by means of any prospectus except a prospectus which complies with paragraph (3) of subsection (e) of Code Section 10-5-5; or
(C) Registered under subsection (f) of Code Section 10-5-5 by means of any prospectus except a prospectus which complies with paragraph (4) of subsection (f) of Code Section 10-5-5; or
(4) In connection with the sale of any securities registered under this chapter:
(A) To make any representation concerning any future sales of securities of the same class by the issuer at a price higher than the current offering price; or
(B) To make any representations as to the future existence of any public market for the securities offered for sale.
(b) It shall be unlawful for any person to make to any prospective purchaser, customer, or client any representation that the filing or effectiveness of a registration statement or the registration of any security under Code Section 10-5-5 or the existence of any exemption for any security or transaction means that the commissioner has passed in any way upon the truth, completeness, or accuracy of such registration statement or the merits of such security or has recommended or given approval to such security or transaction.
(c) It shall be unlawful for any person who:
(1) Is a dealer, limited dealer, salesperson, limited salesperson, investment adviser, federal covered adviser, or investment adviser representative under this chapter;
(2) Is making a notice filing or filing an application for registration as a dealer, limited dealer, salesperson, limited salesperson, investment adviser, or investment adviser representative under this chapter;
(3) Is an issuer which has filed a registration statement or notice filing with respect to securities it intends to issue; or
(4) Is an affiliate of any of the persons described in paragraph (1), (2), or (3) of this subsection
knowingly to cause to be made, in any document filed with the commissioner or in any proceeding under this chapter, any statement which is, at the time it is made and in light of the circumstances under which it is made, false or misleading in any material respect.
(d) Without limiting the general applicability of subsections (a), (b), and (c) of this Code section, it shall be unlawful to:
(1) Quote a fictitious price with respect to a security;
(2) Effect a transaction in a security which involves no change in the beneficial ownership of the security for the purpose of creating a false or misleading appearance of active trading in a security or with respect to the market for the security;
(3) Enter an order for the purchase of a security with the knowledge that an order of substantially the same size and at substantially the same time and price for the sale of the security has been, or will be, entered by or for the same, or affiliated, person for the purpose of creating a false or misleading appearance of active trading in a security or with respect to the market for the security;
(4) Enter an order for the sale of a security with the knowledge that an order at substantially the same time and price for the purchase of the security has been, or will be, entered by or for the same, or affiliated, person for the purpose of creating a false or misleading appearance of active trading in a security or with respect to the market for the security;
(5) Misappropriate, convert, or improperly withhold any funds or other property in connection with an offer or sale of any security; or
(6) Employ any other deceptive or fraudulent device, scheme, or artifice to manipulate the market in a security.
(e) Transactions effected in compliance with the applicable provisions of the Securities Exchange Act of 1934 and the rules and regulations of the Securities and Exchange Commission thereunder shall not be deemed to constitute market manipulation under subsection (d) of this Code section.
(f) It shall be unlawful for any person to transact business within or from this state as an investment adviser or investment adviser representative in violation of Code Section 10-5-3 or any rule, regulation, or order promulgated or issued by the commissioner under this chapter.
(g) It shall be unlawful for any person to hold himself or herself out as, or otherwise represent that he or she is, a 'financial planner' or 'investment adviser' or use as descriptive of his or her business the term 'financial planner' or 'investment adviser' or such similar term as may be specified in rules and regulations promulgated by the commissioner unless said person is a certified public accountant, is registered as an investment adviser or investment adviser representative under this chapter, or is a federal covered adviser who has made a notice filing under this chapter. The use of the term 'financial planner' or 'investment adviser' or a similar term to describe a person´s business shall not be used in such a way so as to be deceptive, as that term may be defined in the rules and regulations promulgated by the commissioner.
(h)(1) It shall be unlawful for any investment adviser, federal covered adviser, or investment adviser representative in the course of his or her business as such:
(A) To employ any device, scheme, or artifice to defraud;
(B) To engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit.
(2) It shall be unlawful for any investment adviser, federal covered adviser, or investment adviser representative in the course of business to engage in dishonest or unethical practices, as the commissioner may define by rule.
(i) It shall be unlawful for any person registered as an investment adviser or investment adviser representative under this chapter or for any federal covered adviser who has made a notice filing under this chapter to represent or imply in any manner whatsoever that such person has been sponsored, recommended, or approved or that his or her abilities or qualifications have in any respect been passed upon by the State of Georgia or any agency or any officer thereof; provided, however, that this provision shall not be construed to prohibit a statement that a person is so registered under this chapter if such statement is true in fact and if the effect of such registration is not misrepresented.
(j) Except as may be permitted by rule or order of the commissioner, it shall be unlawful for any investment adviser to enter into, extend, or renew any investment advisory contract unless it provides in writing:
(1) That the investment adviser shall not be compensated on the basis of a share of capital gains upon or capital appreciation of the funds or any portion of the funds of the client; provided, however, that the prohibitions of this paragraph shall not prohibit an investment advisory contract which provides for compensation based on the total value of a fund averaged over a definite period, as of definite dates, or taken as of definite date;
(2) That no assignment of the contract may be made by the investment adviser without the consent of the other party to the contract; and
(3) That the investment adviser, if a partnership, shall notify the other party to the contract of any change in the membership of the partnership within a reasonable time after the change.
(k) The provisions of subsections (h) and (i) of this Code section and paragraph (1) of subsection (j) of this Code section shall be applicable to any certified public accountant who holds himself out as a 'financial planner' or 'investment adviser.'
(l) All records relating to the preparation of financial plans and the giving of investment advice prepared and maintained by a certified public accountant who holds himself out as a 'financial planner' or 'investment adviser' are subject to reasonable examination by representatives of the commissioner, within or outside this state, as the commissioner deems necessary or appropriate to determine whether any person has violated or is about to violate this chapter or any rule, regulation, or order under this chapter. This provision shall not be construed to require, or authorize the commissioner to require, such certified public accountant to disclose the identity, investments, or affairs of any client of such certified public accountant, except insofar as such disclosure may be necessary or appropriate in a particular proceeding or investigation having as its object the enforcement of this chapter.
(m)(1) In order to prevent fraudulent, deceptive, or manipulative acts or practices, it shall be unlawful for any designated dealer or designated salesman to sell a designated security to, or to effect the purchase of a designated security by, any person unless the transaction is exempt under paragraph (6) of this subsection or, prior to the transaction, (A) the designated dealer and designated salesman, if involved, have approved the person´s account for transactions in designated securities in accordance with the procedures set forth in paragraph (2) of this subsection and (B) the designated dealer and designated salesman, if involved, have submitted to the person a risk disclosure document in a form approved by the commissioner and have thereafter received from the person a written agreement to the transaction in compliance with the requirements of paragraph (3) of this subsection.
(2) In order to approve a person´s account for transactions in designated securities, the designated dealer or designated salesman must:
(A) Obtain from the person information concerning the person´s financial situation (including but not limited to net worth and annual income), investment experience, and investment objectives;
(B) Reasonably determine, based on the information required by subparagraph (A) of this paragraph and any other information known by the dealer or salesman, that transactions in designated securities are suitable for the person and that the person (or the person´s independent adviser in these transactions) has sufficient knowledge and experience in financial matters, such that the person (or adviser) reasonably may be expected to be capable of evaluating the risks of transactions in designated securities;
(C) Deliver to the person a written statement:
(i) Setting forth the basis on which the dealer and salesman made the determination required by subparagraph (B) of this paragraph;
(ii) Stating in a highlighted format that it is unlawful for the dealer or salesman to effect a transaction in a designated security subject to the provisions of subparagraph (B) of paragraph (1) of this subsection unless the dealer and salesman have received, prior to the transaction, a written agreement to the transaction from the person; and
(iii) Stating in a highlighted format immediately preceding the customer´s signature line that:
(I) The dealer and salesman are required by this subsection to provide the person with the written statement; and
(II) The person should not sign and return the written statement to the dealer or salesman if it does not accurately reflect the person´s financial situation, investment experience, and investment objectives; and
(D) Obtain from the person a manually signed and dated copy of the written statement required by subparagraph (C) of this paragraph.
(3) The written agreement to the transaction required by subparagraph (B) of paragraph (1) of this subsection shall:
(A) Be signed by the purchaser and dated;
(B) Set forth the identity and quantity of the designated security to be purchased;
(C) Prominently disclose, in close proximity to the signature lines of the agreement, that the purchaser has a right to rescind the agreement, in accordance with paragraph (4) of this subsection;
(D) Disclose all commissions, fees, bonuses, or other compensation payable to the dealer and salesman as a result of the transaction; and
(E) Disclose the price at which the dealer is currently selling or offering to sell the security and the price at which the dealer is currently buying or offering to buy the security.
(4)(A) Any person purchasing a designated security from a designated dealer or designated salesman shall have an unqualified right to rescind the transaction within three business days of receipt of the confirmation of the transaction.
(B) To exercise the right to rescind, the purchaser shall notify the designated dealer in writing and shall send the notice by mail or other means to the designated dealer´s place of business by midnight of the third business day following receipt of the confirmation of the transaction.
(C) If the designated dealer does not send a confirmation as required by paragraph (2) of subsection (p) of Code Section 10-5-3, the right to rescind under this subsection shall expire two years after the purchase of securities or upon the purchaser´s sale of the security, whichever occurs first.
(D) In a transaction subject to rescission under this paragraph, the designated dealer shall send to the purchaser a written notice of the right to rescind. Such notice shall be included in or accompany the confirmation of the transaction and shall include:
(i) A disclosure of the purchaser´s right to rescind under subparagraphs (A) and (B) of this paragraph;
(ii) A description of how to exercise the right to rescind; and
(iii) A form which may be used to effect a rescission and which sets forth the dealer´s address to which such form may be delivered.
(5) A designated dealer, or another dealer on behalf of such designated dealer, shall disclose, on each statement of account sent to account holders having a designated security shown as a 'long' position in the person´s account as of the statement date, the price at which the designated dealer is offering to buy such security or, if no such price is available, the average of the bid prices by other dealers and the date of the most recent bid available from the designated dealer and the amount of money represented by the long position, if it were to be sold at the bid price shown on the statement.
(6) The requirements of paragraph (1) of this subsection do not apply to:
(A) Transactions in which the purchaser is an accredited investor of the dealer or salesman;
(B) Transactions that are not recommended by the dealer or salesman;
(C) Transactions by a dealer or salesman who is not and has not been a market maker in the designated security that is the subject of the transaction in the immediately preceding 12 months;
(D) Transactions in which the purchaser is an established customer of the dealer or salesman; or
(E) Any transaction or transactions that, upon prior written request or upon his own motion, the commissioner conditionally or unconditionally exempts as not encompassed within the purposes of this subsection.
(7) The requirements of paragraph (4) of this subsection do not apply to:
(A) Transactions in which the purchaser is an accredited investor of the dealer or salesman;
(B) Transactions that are not recommended by the dealer or salesman;
(C) Any transaction or transactions that, upon prior written request or upon his own motion, the commissioner conditionally or unconditionally exempts as not encompassed within the purposes of this subsection.
(8) Compliance with SEC Rule 15c2-6 (17 CFR .240.15c2-6, as amended) shall be deemed to be compliance with paragraph (2) of this subsection.
(n) It shall be unlawful for any designated dealer or designated salesman to charge or receive any commission, fee, bonus, markup, or other compensation with respect to a transaction involving the purchase or sale of designated securities which, singly or in combination, exceeds 10 percent of the purchase or sales price of the securities involved in the transaction.
(o) It shall be unlawful for any dealer, limited dealer, salesman, or limited salesman who is participating or otherwise financially interested in the primary or secondary distribution of any security which is not admitted to trading on a national securities exchange to represent to a customer that any security is being offered to such customer 'at the market' or at a price related to the market price unless such dealer, limited dealer, salesman, or limited salesman knows or has reasonable grounds to believe that a market for such security exists other than that made, created, or controlled by him, or by any person for whom he is acting or with whom he is associated in such distribution, or by any person controlled by, controlling, or under common control with him.
(p) It shall be unlawful for any designated dealer to offer or sell in or from the State of Georgia a designated security unless the designated dealer:
(1) At the time of the offer and sale has entered upon a quotation system approved by the commissioner, a firm bid to purchase at least 100 shares of the stock sold at a firm price; and
(2) Actually intends to purchase and, when called upon to do so by any person, actually will purchase at least 100 shares at such price, and does not intend to reduce, and does not reduce below the quoted bid price, the price for which it actually purchases additional shares, except in reasonable response to market or economic circumstances or conditions.
(q) It shall be unlawful for any person to offer for sale or to sell viatical investments in or from this state unless the following requirements are met:
(1) The viatical issuer first files with the commissioner a statement which provides the following information:
(A) A full description of the types of viatical investments to be offered or sold, including without limitation statements as to whether the underlying policies or certificates will be whole, fractionalized, or pooled, whether the underlying policies are currently owned by the viatical issuer or will be acquired in the future, and whether the investors will be sold only policies or certificates owned by the viatical issuer at the time of the investment or will have their investments matched to policies that may be acquired after the date of the investment;
(B) The financial statements of the viatical issuer, prepared in conformity with generally accepted accounting principles;
(C) A list of all dealers, salespersons, and agents authorized by the viatical issuer to sell in this state, together with their securities registration numbers;
(D) A list of all states in which the viatical issuer is licensed to purchase viatical settlement contracts, has an application pending, or has been denied exemption or registration;
(E) A list of all states in which the viatical issuer sells viatical investments pursuant to exemption, is licensed to sell viatical investments, has an application pending, or has been denied exemption or registration;
(F) A copy of any escrow agreements for the escrow of proceeds or for the escrow of funds for the payment of premiums;
(G) A copy of all advertisements or sales literature and the text of any script to be used in conjunction with the solicitation, offer, or sale of a viatical investment;
(H) A copy of all documents to be used to disclose the risk factors associated with the sale of a viatical investment; and
(I) A copy of all documents to be used to conduct any determination of suitability of a viatical investment to the particular investor.
The viatical issuer shall have an affirmative duty to file with the commissioner a supplemental or amended statement if at any time there is a material change to any of the information provided in the statement;
(2) The viatical issuer files an annual report that shall include such information pertaining to the offer, sale, or status of any viatical investment as the commissioner may by rule require;
(3) In connection with the offer or sale of any viatical investment, the viatical issuer, dealer, salesperson, and agent offering or selling the viatical investment shall not make any projections or representations regarding rates of return of any investment or prospective investment other than a rate of return expressed on an annual basis. Such projection or representation must be based upon a written opinion of life expectancy by a qualified physician;
(4) The viatical issuer, dealer, salesperson, and agent shall, for a minimum of five years after the date of maturity of any policy that is the subject of a viatical investment, retain and provide to the commissioner upon request copies of documents relating to the offer or sale of viatical investments that the commissioner may by rule require and shall make said documents available for inspection by the commissioner upon request; and
(5) Neither the viatical issuer nor any of its officers, directors, partners, 10 percent or greater stockholders, promoters, affiliates, nor the escrow agent nor any selling agent of the viatical investment being offered, nor any officer, director, or partner of the selling agent shall have:
(A) Within the last five years filed a registration statement which is the subject of a currently effective stop order entered by any state securities administrator or the United States Securities and Exchange Commission;
(B) Within the last five years been convicted of any felony or misdemeanor in connection with the purchase or sale of any security or any felony involving fraud or deceit, including, but not limited to, forgery, embezzlement, obtaining money under false pretenses, larceny, or conspiracy to defraud;
(C) Within the last five years been subject to an administrative order or decision issued by any state securities or insurance administrator or the United States Securities and Exchange Commission which administrative order or decision has not been vacated;
(D) Within the last five years been subject to any administrative order or decision issued by any state or federal regulatory authority or any financial services self-regulatory organization in which fraud or deceit was found, which administrative order or decision has not been vacated;
(E) Within the last five years been subject to an order or decision issued by any state securities administrator, which order or decision has not been vacated and prohibits the use of any exemption from registration in connection with the purchase or sale of securities; or

(F) Within the last five years been subject to any order, judgment, or decree of any court of competent jurisdiction temporarily, preliminarily, or permanently restraining or enjoining the person from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security or involving the making of any false filing with any state.

10-5-13. Administrative, civil, and criminal actions 

(a) Whenever it may appear to the commissioner, either upon complaint or otherwise, that any person has engaged in or is engaging in or is about to engage in any act or practice or transaction which is prohibited by this chapter or by any rule, regulation, or order of the commissioner promulgated or issued pursuant to any Code section of this chapter or which is declared to be unlawful under this chapter, the commissioner may, at his or her discretion, act under any or all of the following paragraphs:
(1) Impose administrative sanctions as provided in this paragraph:
(A) Subject to notice and opportunity for hearing in accordance with Code Section 10-5-16, unless the right to notice is waived by the person against whom the sanction is imposed, the commissioner may:
(i) Issue a cease and desist order against any person;
(ii) Censure the person if the person is registered as an issuer, dealer, limited dealer, salesperson, limited salesperson, investment adviser, or investment adviser representative;
(iii) Bar or suspend the person from association with a registered dealer, a limited dealer, or an investment adviser in this state; or
(iv) Issue an order against an applicant, registered person, or other person who willfully violates this chapter, imposing a civil penalty up to a maximum of $50,000.00 for a single violation or up to $500,000.00 for multiple violations in a single proceeding or a series of related proceedings;
(B) Imposition of the sanctions under this paragraph is limited as follows:
(i) If the commissioner revokes the registration of a dealer, limited dealer, salesperson, limited salesperson, investment adviser, or investment adviser representative or bars a person from association with a registered dealer, limited dealer, or investment adviser under subparagraph (A) of this paragraph, the imposition of that sanction precludes imposition of the sanction specified in division (iv) of subparagraph (A) of this paragraph; and
(ii) The imposition by the commissioner of one or more sanctions under this paragraph with respect to a specific violation precludes the commissioner from later imposing any other sanctions under this paragraph with respect to the violation;
(C) For the purpose of determining the amount or extent of a sanction, if any, to be imposed under subparagraph (A) of this paragraph, the commissioner shall consider, among other factors, the frequency, persistence, and willfulness of the conduct constituting a violation of this chapter or a rule promulgated thereunder or an order of the commissioner, the number of persons adversely affected by the conduct, and the resources of the person committing the violation;
(2) Seek civil sanctions by applying to any superior court of competent jurisdiction in this state, which court:
(A) Upon a showing by the commissioner that a person has violated this chapter, a rule promulgated thereunder, or an order of the commissioner, may enter or grant:
(i) A temporary restraining order, permanent or temporary injunction, or a writ of prohibition or mandamus;
(ii) A civil penalty up to a maximum of $50,000.00 for a single violation or up to $500,000.00 for multiple violations in a single proceeding or a series of related proceedings;
(iii) A declaratory judgment;
(iv) Restitution to investors;
(v) The appointment of a receiver, auditor, or conservator for the defendant or the defendant´s assets;
(vi) An order of disgorgement; or
(vii) Other relief as the court deems just and equitable;
(B) May, upon a showing by the commissioner that the defendant is about to violate this chapter, a rule promulgated thereunder, or an order of the commissioner, issue:
(i) A temporary restraining order;
(ii) A temporary or permanent injunction;
(iii) A writ of prohibition or mandamus; or
(iv) Such other relief as the court deems just and equitable;
(C) In determining the appropriate relief to grant, shall consider enforcement action taken and sanctions imposed by the commissioner under paragraph (1) of this subsection in connection with the transaction or transactions constituting a violation of this chapter, a rule promulgated thereunder, or an order of the commissioner; and
(D) Upon a showing by the securities agency or administrator of another state that a person has violated the securities or investment adviser law of that state, a rule promulgated thereunder, or an order of said agency or administrator, in addition to any other legal or equitable remedies, may impose one or more of the following remedies:
(i) The appointment of a receiver, auditor, conservator, or ancillary receiver or conservator for the defendant or the defendant´s assets located in this state; and
(ii) Such other relief as the court deems just and equitable; or
(3) Transmit such evidence as may be available concerning such act, practice, or transaction to any district attorney or to the Attorney General, who may, at his or her individual discretion, institute the necessary criminal proceedings.
(b) In any proceedings for an injunction, the commissioner may apply for and be entitled to have issued the court´s subpoena requiring:
(1) The appearance forthwith of any defendant and his agents, employees, partners, officers, or directors; and
(2) The production of such documents, books, and records as may appear necessary for the hearing upon the petition for an injunction.
Upon proof of any of the offenses described in this Code section, the court may grant such injunction and appoint a receiver or an auditor and issue such other orders for the protection of investors as the facts may warrant.
(c) In any criminal proceeding either the district attorney or the Attorney General or both may apply for and be entitled to have issued the court´s subpoena requiring:
(1) The appearance forthwith of any defendant or his agents, employees, partners, officers, or directors; and
(2) The production of such documents, books, and records as may appear necessary for the prosecution of such criminal proceedings.

10-5-14. Civil liability from sales of securities      

(a) Any person who violates subsection (a) of Code Section 10-5-12 shall be liable to the person buying such security; and such buyer may sue in any court of competent jurisdiction to recover the consideration paid in cash (or the fair value thereof at the time the consideration was paid if such consideration was not paid in cash) for the security with interest thereon from the date of payment down to the date of repayment as computed in paragraph (1) of subsection (d) of this Code section (less the amount of any income received thereon), together with all taxable court costs and reasonable attorney´s fees, upon the tender, where practicable, of the security at any time before the entry of judgment, or for damages if he no longer owns the security. Damages are the amount which equals the difference between the fair value of the consideration the buyer gave for the security and the fair value of the security at the time the buyer disposed of it, plus interest thereon from the date of payment down to the date of repayment as computed in paragraph (2) of subsection (d) of this Code section. A person who offers or sells a security in violation of paragraph (2) of subsection (a) of Code Section 10-5-12 is not liable under this subsection if:
(1) The purchaser knew of the untrue statement of a material fact or omission of a statement of a material fact; or
(2) The seller did not know and in the exercise of reasonable care could not have known of the untrue statement or misleading omission.
(b) Every contract between a certified public accountant who holds himself out as a 'financial planner' or an 'investment adviser' and an advisory client or between an investment adviser and an advisory client made in violation of any provision of this chapter and every such contract heretofore or hereafter made, the performance of which involves the violation of or continuance of any relationship or practice in violation of any provision of this chapter or any rule, regulation, or order thereunder, shall be void:
(1) As regards the rights of any person who, in violation of any such provision, rule, regulation, or order shall have made or engaged in the performance of any such contract; and
(2) As regards the rights of any person who, not being a party to such contract, shall have acquired any right thereunder with actual knowledge of the facts by reason of which the making or performance of such contract was in violation of any such provision.
The advisory client who is a party to such a contract may sue to recover the consideration paid under such contract to such investment adviser or investment adviser representative, together with interest thereon at the annual rate of 6 percent from the date of payment of the consideration, plus costs and reasonable attorney´s fees.
(c) Every person who directly or indirectly controls a person liable under subsection (a), (b), or (h) of this Code section, every general partner, executive officer, or director of such person liable under subsection (a), (b), or (h) of this Code section, every person occupying a similar status or performing similar functions, and every dealer, limited dealer, salesman, or limited salesman who participates in any material way in the sale is liable jointly and severally with and to the same extent as the person whose liability arises under subsection (a), (b), or (h) of this Code section unless the person whose liability arises under this subsection sustains the burden of proof that he did not know and in the exercise of reasonable care could not have known of the existence of the facts by reason of which liability is alleged to exist. There is contribution as in the case of contract among several persons so liable.
(d) With respect to the purchase, sale, or offer to purchase or sell a security, no person may sue under this Code section more than two years from the date of the contract for sale or sale, if there is no contract for sale. With respect to the purchase, sale, or offer to purchase or sell a security, no person may sue under this Code section:
(1) If the buyer received a written offer, before suit and at a time when he owned the security, to repay in cash or by certified or official bank check, within 30 days from the date of acceptance of such offer in exchange for the securities, the fair value of the consideration paid (determined as of the date such payment was originally paid by the buyer), together with interest on such amount for the period from the date of payment down to the date of repayment, such interest to be computed in case the security consists of an interest-bearing obligation at the same rate as provided in the security or, in case the security consists of other than an interest-bearing obligation, at the rate of 6 percent per annum, less, in every case, the amount of any income received on the security, and:
(A) Such offeree does not accept the offer within 30 days of its receipt; or
(B) If such offer was accepted, the terms thereof were complied with by the offeror; or
(2) If the buyer received a written offer before suit and at a time when he did not own the security to repay in cash or by certified or official bank check, within 30 days from the date of acceptance of such offer, an amount equal to the difference between the fair value of the consideration the buyer gave for the security and the fair value of the security at the time the buyer disposed of it, together with interest on such amount for the period from the date of payment down to the date of repayment, such interest to be computed in case the security consists of an interest-bearing obligation at the same rate as provided in the security or, in case the security consists of other than an interest-bearing obligation, at the rate of 6 percent per annum, less, in every case, the amount of any income received on the security, and:
(A) Such offeree does not accept the offer within 30 days of its receipt; or
(B) If such offer was accepted, the terms thereof were complied with by the offeror,
provided no written offer shall be effective within the meaning of this subsection unless it would be exempt under Code Section 10-5-9 or, if registration would have been required, then unless such rescission offer has been registered and effected under a subsection of Code Section 10-5-5. Any person who is paid for his security in the amount provided by this subsection shall be foreclosed from asserting any remedies under this chapter regardless of whether the other requirements of this subsection have been complied with.
(e) With respect to the activities of a certified public accountant who holds himself out as a 'financial planner' or an 'investment adviser' or an investment adviser or investment adviser representative, no person may sue under this Code section more than two years from the date of the transaction upon which the suit is based.
(f) Every cause of action under this chapter survives the death of any person who might have been a plaintiff or defendant.
(g) Nothing in this chapter shall limit any statutory or common-law right of any person in any court for any act involving the sale of a security.
(h) Any designated dealer or designated salesman who materially violates Code Section 10-5-4 or 10-5-5 or subsection (a) or (d) of Code Section 10-5-12 with respect to a transaction involving a designated security shall be liable to the person buying such security for:
(1) The consideration paid in cash (or the fair value of the consideration paid at the time it was paid if such consideration was not paid in cash) for such security with interest thereon from the date of payment to the date of repayment as computed under paragraph (1) of subsection (d) of this Code section, less the amount of any income paid thereon, upon the tender of the security at any time before the entry of judgment;
(2) An additional amount equal to three times the amount calculated pursuant to paragraph (1) of this subsection; and
(3) Court costs and reasonable attorney´s fees
The form of action provided by Code Section 9-11-23 may be used in any action brought pursuant to subsection (h) of this Code section, and, in such case, it shall be conclusively presumed that a class of persons numbering ten or more who purchased the same designated security from or through the same designated dealer or designated salesman shall constitute a class so numerous as to make it impracticable to bring them all before the courts.

10-5-15.  Venue of civil or criminal actions  

For the purposes of venue for any civil or criminal action under this chapter, any violation of this chapter or of any rule, regulation, or order promulgated under this chapter shall be considered to have been committed in any county in which any act was performed in furtherance of the transaction which violated the chapter, in the county of any violator´s principal place of business in this state, in the county of the issuer´s principal place of business in this state, and in any county in which any violator had control or possession of any proceeds of the violation or of any books, records, documents, or other material or objects which were used in furtherance of the violation.

10-5-23. Application of law in effect at time cause of action arose or crime occurred

Any criminal proceeding or civil proceeding, including but not limited to judicial review of all administrative orders, instituted under this chapter shall be governed by the provisions of this chapter as such provisions existed in full force and effect on the date of the alleged commission of the underlying facts or circumstances which constitutes evidence of the commission of a crime or violation of this chapter, notwithstanding any subsequent amendment to this chapter, unless the General Assembly shall specifically declare otherwise, except that no civil or criminal proceeding shall be instituted after the lapse of the appropriate period of limitation which was in effect at the time the cause of action arose or the alleged commission of the crime occurred.

10-5-24. Criminal penalties for violating chapter; penalties for violating other laws not affected

(a) Any person who shall willfully violate any provision of this chapter shall be guilty of a felony and, upon conviction thereof, shall be punished by a fine of not more than $500,000.00 or imprisonment for not less than one and not more than five years, or both.
(b) Nothing in this chapter shall limit any statutory or common-law right of the state to punish any person for violation of any law.


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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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