Imágenes de páginas
PDF
EPUB

exchange or national securities association registered under the Securities Exchange Act of 1934.

FILING OF SALES AND ADVERTISING LITERATURE

SEC. 8. The Commission may by rule or order require any broker-dealer or agent to file with the Commission any prospectus, pamphlet, circular, form letter, advertisement, or other sales literature or advertising communication addressed or intended for distribution to prospective investors.

MISLEADING FILINGS

SEC. 9. It shall be unlawful for any person to make or cause to be made, in any document filed with the Commission or in any proceeding under this Act, any statement which is, at the time and in the light of the circumstances in which it is made, false or misleading in any material respect.

DENIAL, REVOCATION, SUSPENSION, CANCELLATION, AND WITHDRAWAL OF LICENSES

SEC. 10. (a) The Commission may by order deny, suspend, or revoke any license if it finds that the order is in the public interest and that the applicant or licensee or, in the case of a broker-dealer, any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker-dealer

(1) has filed an application for a license which as of its effective date, or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact;

(2) has willfully violated or willfully failed to comply with any provision of this Act or any rule or order under this Act, or has violated or failed to comply with the minimum capital requirement of section 5(d) or any ratio rule prescribed thereunder;

(3) has been convicted, within the past ten years, of any misdemeanor involving a fiduciary relationship or a security or any aspect of the securities business, or of any felony, or has been acquitted of any such offense within the same period solely on the ground that he was insane at the time of its commission;

(4) is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the securities business ;

(5) is the subject of an order of the Commission denying, suspending, or revoking a license as a broker-dealer or agent;

(6) is the subject of an order entered within the past five years by the securities administrator of any State or by the Securities and Exchange Commission denying or revoking a license or registration as a broker-dealer or agent, or the substantial equivalent of those terms as defined in this Act, or is the subject of an order of the Securities and Exchange Commission, suspending or expelling him from a national securities exchange or national securities association, or is the subject of a United States Post Office fraud order; but (i) the Commission may not institute a revocation or suspension proceeding under clause (6) more than two years from the date of the order or action relied on, and (ii) it may not enter an order under clause (6) on the basis of an order under a State act unless that order was based on facts which would currently constitute a ground for an order under this section:

(7) has engaged in fraudulent practices in the securities business or while acting in any fiduciary capacity;

(8) is insolvent, either in the sense that his liabilities exceed his assets or in the sense that he cannot meet his obligations as they mature; but the Commission may not enter an order against a broker-dealer under this clause without a finding of insolvency as to the broker-dealer; or

(9) is not qualified on the basis of such factors as training, experience, and knowledge of the securities business, except as otherwise provided in

subsection (b). The Commission may by order deny, suspend. or revoke any license if it finds that the order is in the public interest and that the applicant or licensee

(10) has failed reasonably to supervise his agents if he is a brokerdealer; or

(11) has failed to pay the proper filing fee; but the Commission may enter only a denial order under this clause, and it shall vacate any such

order when the deficiency has been corrected. The Commission may not institute a suspension or revocation proceeding solely on the basis of a fact or transaction known to it when the license became effective unless the proceeding is instituted within the next thirty days.

(b) The following provisions shall govern the application of section 10(a) (9):

(1) The Commission may not enter an order against a broker-dealer on the basis of the lack of qualification of any person other than (A) the broker-dealer himself if he is an individual or (B) an agent of the broker-dealer.

(2) The Commission may not enter an order solely on the basis of lack of experience if the applicant or licensee is qualified by training or knowledge or both.

(3) The Commission shall consider that an agent who will work under the supervision of a licensed broker-dealer need not have the same qualifications as a broker-dealer.

(4) The Commission shall by rule provide for an examination, which may be written or oral or both, to be taken by any class of, or all, applicants.

(c) The Commission may by order summarily postpone issuance of a license or suspend an effective license pending determination of any proceeding under this section. Upon the entry of the order, the Commission shall promptly notify the applicant or licensee, as well as the employer or prospective employer if the applicant or licensee is an agent, that it has been entered and of the reasons therefor and that within fifteen days after the receipt of a written request the matter will be set down for hearing. If no hearing is requested and none is ordered by the Commission, the order will remain in effect until it is modified or vacated by the Commission. If hearing is requested or ordered, the Commission, after notice of and opportunity for hearing, may modify or vacate the order or extend it until final determination.

(d) If the Commission finds that any licensee or applicant for a license is no longer in existence, or has ceased to do business as a broker-dealer or agent, or has been adjudicated to be of unsound mind or is subject to the control of a committee, conservator, or guardian, or cannot be located after reasonable search, the Commission may by order cancel the license or application.

(e) Withdrawal of a license of a broker-dealer or agent shall become effective thirty days after receipt of an application to withdraw or within such shorter period of time as the Commission may determine, unless a revocation or suspension proceeding is pending when the application is filed or a proceeding to revoke or suspend or to impose conditions upon the withdrawal is instituted within thirty days after the application is filed. If a proceeding is pending or instituted, withdrawal shall become effective at such time and upon such conditions as the Commission shall by order determine.

If no proceeding is pending or instituted and withdrawal automatically becomes effective, the Commission may nevertheless institute a revocation or suspension proceeding under section 10(a) (2) within one year after withdrawal became effective and enter a revocation or suspension order as of the last date on which the license was effective.

(f) No order may be entered under any part of this section except the first sentence of subsection (c) without (1) appropriate prior notice to the applicant or licensee (as well as the employer or prospective employer if the applicant or licensee is an agent), (2) opportunity for hearing, and (3) findings and conclusions, as well as the reasons or basis therefor, upon all the material issues of fact, law, or discretion presented on the record.

INVESTIGATIONS AND SUBPENAS

SEC. 11. (a) The Commission in its discretion (1) may make such public or private investigations within or without the District as it deems necessary to determine whether any person has violated or is about to violate any provision of this Act or any rule or order hereunder, or to aid in the enforcement of this Act or in the prescribing of rules and forms hereunder, (2) may require or permit any person to file a statement in writing, under oath or otherwise as the Commission may determine, as to all the facts and circumstances concerning the matter to be investigated, and (3) may publish information concerning any violation of this Act or any rule or order hereunder.

(b) For the purpose of any investigation or proceeding under this Act, the Commission may administer oaths and affirmations, subpena witnesses,

compel their attendance, take evidence, and require the production of any books, papers, correspondence, memorandums, agreements, or other documents or records which it deems relevant or material to the inquiry.

(c) In case of contumacy by, or refusal to obey a subpena issued to any person, the United States District Court for the District of Columbia, upon application by the Commission with the approval of the United States attorney for the District of Columbia, may issue an order compelling such person to appear before the Commission, or the officer designated by it, there to produce documentary evidence if so ordered or to give evidence touching the matter under investigation or in question; and any failure to obey such order of the court may be punished by such court as a contempt thereof.

(d) No person shall be excused from attending and testifying or from producing any document or record before the Commission, or the officer designated by it, in obedience to a court order pursuant to subsection (c), on the ground that the testimony or evidence (documentary or otherwise) required of him may tend to incriminate him or subject him to a penalty or forfeiture; but no individual may be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is by such order compelled, after claiming his privilege against selfincrimination, to testify or produce evidence (documentary or otherwise), except that the individual testifying shall not be exempt from prosecution and punishment for perjury or contempt committed in testifying.

INJUNCTIONS

SEC. 12. Whenever it shall appear to the Commission that any person has engaged or is about to engage in any act or practice constituting a violation of this Act or any rule or order hereunder, it may in its discretion bring an action in the United States District Court for the District of Columbia to enjoin the acts or practices and to enforce compliance with this Act or any rule or order hereunder. Upon a proper showing a permanent or emporary injunction, restraining order, or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets. The court may not require the Commission to post a bond.

CRIMINAL PENALTIES

Sec. 13. (a) Any person who shall willfully violate any provision of this Act except sections 3 and 9, or who shall willfully violate section 9 knowing the representation to be false or misleading in any material respect, shall upon conviction be fined not more than $5,000 or imprisoned not more than three years, or both.

(b) Any person who shall willfully violate section 3 of this Act shall upon conviction be fined not more than $5,000 or imprisoned not more than five years, or both.

(c) Any person who shall willfully violate any rule or order under this Act shall upon conviction be fined not more than $5,000 or imprisoned not more than one year, or both; but no person may be imprisoned for the violation of any rule or order if he proves that he had no knowledge of the rule or order.

(d) Nothing in this Act shall be construed to limit the power of the United States or of the District of Columbia to punish any person for any conduct which constitutes an offense under any other Act of Congress applicable in the District, or under any municipal ordinance or regulation of the District, or at common law.

CIVIL LIABILITIES

Sec. 14. (a) Any person who

(1) offers or sells a security in violation of section 4(a) or 6(b) of this Act; or

(2) offers or sells a security by means of any written or oral communication which includes any untrue statement of a material fact or omitss to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading (the purchaser not knowing of such untruth or omission), and who shall not sustain the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission

shall be liable to the person purchasing such security from him, and the purchaser may bring a civil action to recover the consideration paid for the security with interest thereon and with costs and reasonable attorney fees less the amount of any income received on the security, upon the tender of the security, or for damages if he no longer owns the security. For this purpose damages shall be the amount that would be recoverable upon a tended, less the market value of the security when the buyer disposed of it and interest from the date of disposition.

(b) Any person who directly or indirectly controls a seller liable under subsection (a), any partner, officer, or director of such a seller and any person occupying a similar status or performing similar functions, any employee of such a seller who materially aids in the sale, and any broker-dealer or agent who materially aids in the sale shall also be liable jointly and severally with and to the same extent as the seller, unless the nonseller who shall be so liable 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 the liability is alleged to exist. There shall be contribution as in cases of contract among the several persons so liable.

(c) Any tender specified in this section may be made at any time before entry of judgment.

(d) Any liability or cause of action under this section shall survive the death of any person who, if living, would have such a liability or cause of action.

(e) No person may bring an action under this section after two years from the contract of sale. No person may bring an action under this section (1) if the buyer received a written offer, before suit and at a time when he owned the security, to refund the consideration paid for the security together with interest at 6 per centum per annum from the date of payment, less the amount of any income received on the security, and if he failed to accept that offer within thirty days of its receipt, or (2) if the buyer received such an offer before suit and at a time when he did not own the security, unless he rejected the offer in writing within thirty days of its receipt.

(f) No person who has made or engaged in the performance of any contract in violation of any provision of this Act or of any rule or order hereunder, or who has acquired any purported right under any such contract with knowledge of the facts by reason of which its making or performance was in violation, may base any suit upon the contract.

(g) Any condition, stipulation, or provision binding any person who acquires any security to waive compliance with any provision of this Act or with any rule or order under this Act shall be void.

(h) The rights and remedies provided by this Act shall be in addition to any rights or remedies that may exist at law or in equity, but this Act shall not create any cause of action not specified in this or section 5(e).

SCOPE OF ACT AND SERVICE OF PROCESS

SEC. 15. (a) Sections 3, 4(a), 6, and 14 shall apply to persons who sell or offer to sell when (1) an offer to sell is made in the District, or (2) any offer to buy is made and accepted in the District.

(b) Seetions 3, 4(a), and 6 shall apply to persons who buy or offer to buy when (1) an offer to buy is made in the District, or (2) an offer to sell is made and accepted in the District.

(c) For the purpose of this section, an offer to sell or to buy is made in the District whether or not either party is then present in the District, when the offer (1) originates from the District or (2) is directed by the offeror to the District and received at the place to which it is directed (or at any post office in the District in the case of a mailed offer).

(d) For the purpose of this section, an offer to buy or to sell is accepted in the District when acceptance (1) is communicated to the offeror in the District and (2) has not previously been communicated to the offeror, orally or in writing, outside the District. Acceptance is communicated to the offeror in the District, whether or not either party is then present in the District, when the offeree directs it to the offeror in the District reasonably believing the offeror to be in the District and it is received at the place to which it is drecteid (or at any post office in the District in the case of a mailed acceptance).

(e) An offer to sell or to buy is not made in the District by anything appearing in (1) any bona fide newspaper or other publication of general, regular, and paid circulation, circulated by or on behalf of the publisher in the District which is not published in the District, or which is published in the District but has had

more than two-thirds of its circulation outside the District during the past twelve months, or (2) any radio or television program received in the District which originates outside of the District.

(f) Any applicant for a license under this Acst shall file with the Commission, in such form as it by rule may prescribe, an irrevocable consent appointing each member of the Commission or his successor in office to be his attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against him or his successor, executor, or administrator which shall arise under this Act or any rule or order hereunder after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. A person who shall have filed such a consent in connection with one application or offering need not file another. Service may be made by leaving a copy of the process in the office of the Commission, but it shall not be effective unless (1) the plaintiff forthwith shall send notice of the service and a copy of the process by registered mail to the defendant or respondent at his last address on file with the Commission, and (2) the plaintiff's affidavit of compliance with this subsection shall be filed in the case on or before the return day of the process, if any, or within such further time as the court may allow.

(g) When any person, including any nonresident of the District, shall engage in conduct prohibited or made actionable by this Act or any rule or order under this Act and he shall not have filed a consent to service of process under subsection (f) and personal jurisdiction over him cannot otherwise be obtained in the District, that conduct shall be considered equivalent to his appointment of each member of the Commission, or his successor in office, to be his attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against him or his successor, executor, or administrator which shall arise from that conduct and which shall be brought under this Act or any rule or order under this Act, with the same force and validity as if served on him personally. Service may be made by leaving a copy of the process in the office of the Commission, but it shall not be effective unless (1) the plaintiff forthwith shall send notice of the service and a copy of the process by registered mail to the defendant or respondent at his last known address or shall take other steps reasonably calculated to give actual notice, and (2) the plaintiff's affidavit of compliance with this subsection shall be filed in the case on or before the return day of the process, if any, or within such further time as the court may allow.

(h) For the purposes of subsections (f) and (g) of this section, the term “plaintiff" includes the Commission in any suit, action, or proceeding initiated by it.

(i) After service of process under this section, the court, or the Commission in a proceeding before it, shall order such continuance as may be necessary to afford the defendant or respondent reasonable opportunity to defend.

ADMINISTRATION OF ACT

SEC. 16. (a) This Act shall be administered by the Public Service Commission of the District of Columbia. The Commission is hereby authorized to establish such offices and with such names or titles, and to appoint and employ such officers and employees and prescribe their duties, as may be necessary to carry out the provisions of this Act, and to prescribe the compensation of its officers and employees in accordance with the classification laws.

(b) All collections, including fees, received pursuant to this Act shall be deposited in the Treasury of the United States to the credit of the District of Columbia : Provided, That not to exceed $5,000 of such fees and other funds shall be retained in a trust fund account for the purpose of defraying the expenses, as authorized by the Commission, of hearings held pursuant to this Act, including stenographic and reporting services (by contract or otherwise) and rental or purchase of equipment: Provided further, That the amount so retained shall not exceed $5,000 at any one time. Expenditures from such trust fund account shall be made in the same manner as provided by law for other expenditures of the District.

(c) Appropriations to carry out the purposes of this Act are hereby authorized.

(d) The provisions of section 8 of the Act entitled “An Act making appropriations to provide for the expenses of the government of the District of Columbia for the fiscal year ending June thirtieth, nineteen hundred and fourteen, and for other purposes”, approved March 4, 1913 (37 Stat. 974, ch. 150) as now or hereafter amended (43 D.C. Code, 1961 edition) are, insofar as they are applicable,

« AnteriorContinuar »