TITLE 71
CHAPTER 1. OKLAHOMA UNIFORM SECURITIES ACT OF 2004
ARTICLE 1
SECURITIES COMMISSION
§§ 1-101. Short title,
This act shall be known and may be cited as the "Oklahoma Uniform
Securities Act of 2004."
§§ 1-102. Definitions
In this act, unless the context otherwise requires:
1. "Administrator" means the securities Administrator
appointed by the Oklahoma Securities Commission;
2. "Agent" means an individual, other than a broker-dealer,
who represents a broker-dealer in effecting or attempting to effect purchases or
sales of securities or represents an issuer in effecting or attempting to effect
purchases or sales of the issuer's securities. A partner, officer, or director
of a broker-dealer or issuer, or an individual having a similar status or
performing similar functions is an agent only if the individual otherwise comes
within the term. The term does not include an individual excluded by rule
adopted or order issued under this act;
3. "Bank" means:
a. a banking institution organized under the laws
of the United States,
b. a member bank of the Federal Reserve System,
c. any other banking institution, whether
incorporated or not, doing business under the laws of a state or of
the United States, a substantial portion of the business of which
consists of receiving deposits or exercising fiduciary powers
similar to those permitted to be exercised by national banks under
the authority of the Comptroller of the Currency pursuant to Section
1 of Public Law 87-722 (12 U.S.C. Section 92a), and which is
supervised and examined by a state or federal agency having
supervision over banks, and which is not operated for the purpose of
evading this act, and
d. a receiver, conservator, or other liquidating agent of any
institution or firm included in subparagraph a, b or c of this paragraph;
4. "Broker-dealer" means a person engaged in the business of
effecting transactions in securities for the account of others or for the
person's own account. The term does not include:
a. an agent,
b. an issuer,
c. a bank or savings institution if its activities as a
broker-dealer are limited to those specified in subsections 3(a)(4)(B)(i)
through (vi), (viii) through (x), and (xi) if limited to unsolicited
transactions; 3(a)(5)(B); and 3(a)(5)(C) of the Securities Exchange Act of 1934
(15 U.S.C. Sections 78c(a)(4) and (5)) or a bank that satisfies the conditions
described in subsection 3(a)(4)(E) of the Securities Exchange Act of 1934 (15
U.S.C. Section 78c(a)(4)),
d. an international banking institution, or
e. a person excluded by rule adopted or order issued under
this act;
5. “Commission” means the Oklahoma Securities Commission;
6. “Department” means the Oklahoma Department of Securities;
7. “Depository institution” means:
a. a bank, or
b. a savings institution, trust company, credit union, or
similar institution that is organized or chartered under the laws of a state or
of the United States, authorized to receive deposits, and supervised and
examined by an official or agency of a state or the United States if its
deposits or share accounts are insured to the maximum amount authorized by
statute by the Federal Deposit Insurance Corporation, the National Credit Union
Share Insurance Fund, or a successor authorized by federal law. The term does
not include:
(1) an insurance company or other organization primarily
engaged in the business of insurance,
(2) a Morris Plan bank, or
(3) an industrial loan company;
8. "Federal covered investment adviser" means a person
registered under the Investment Advisers Act of 1940;
9. "Federal covered security" means a security that is, or
upon completion of a transaction will be, a covered security under Section 18(b)
of the Securities Act of 1933 (15 U.S.C. Section 77r(b)) or rules or regulations
adopted pursuant to that provision;
10. "Filing" means the receipt under this act of a record by
the Administrator or a designee of the Administrator;
11. "Fraud," "deceit," and "defraud" are not limited to
common law deceit;
12. "Guaranteed" means guaranteed as to payment of all
principal and all interest;
13. "Institutional investor" means any of the following,
whether acting for itself or for others in a fiduciary capacity:
a. a depository institution or international banking
institution,
b. an insurance company,
c. a separate account of an insurance company,
d. an investment company as defined in the Investment Company
Act of 1940,
e. a broker-dealer registered under the Securities Exchange
Act of 1934,
f. an employee pension, profit-sharing, or benefit plan if
the plan has total assets in excess of Ten Million Dollars ($10,000,000.00) or
its investment decisions are made by a named fiduciary, as defined in the
Employee Retirement Income Security Act of 1974, that is a broker-dealer
registered under the Securities Exchange Act of 1934, an investment adviser
registered or exempt from registration under the Investment Advisers Act of
1940, an investment adviser registered under this act, a depository institution,
or an insurance company,
g. a plan established and maintained by a state, a political
subdivision of a state, or an agency or instrumentality of a state or a
political subdivision of a state for the benefit of its employees, if the plan
has total assets in excess of Ten Million Dollars ($10,000,000.00) or its
investment decisions are made by a duly designated public official or by a named
fiduciary, as defined in the Employee Retirement Income Security Act of 1974,
that is a broker-dealer registered under the Securities Exchange Act of 1934, an
investment adviser registered or exempt from registration under the Investment
Advisers Act of 1940, an investment adviser registered under this act, a
depository institution, or an insurance company,
h. a trust, if it has total assets in excess of Ten Million
Dollars ($10,000,000.00), its trustee is a depository institution, and its
participants are exclusively plans of the types identified in subparagraph f or
g of this paragraph, regardless of the size of their assets, except a trust that
includes as participants self-directed individual retirement accounts or similar
self-directed plans,
i. an organization described in Section 501(c)(3) of the
Internal Revenue Code (26 U.S.C. Section 501(c)(3)), corporation, Massachusetts
trust or similar business trust, limited liability company, or partnership, not
formed for the specific purpose of acquiring the securities offered, with total
assets in excess of Ten Million Dollars ($10,000,000.00),
j. a small business investment company licensed by the Small
Business Administration under Section 301(c) of the Small Business Investment
Act of 1958 (15 U.S.C. Section 681(c)) with total assets in excess of Ten
Million Dollars ($10,000,000.00),
k. a “private business development company” as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940 (15 U.S.C. Section
80b-2(a)(22)) with total assets in excess of Ten Million Dollars
($10,000,000.00),
l. a federal covered investment adviser acting for its own
account,
m. a "qualified institutional buyer" as defined in Rule
144A(a)(1), other than Rule 144A(a)(1)(i)(H), adopted under the Securities Act
of 1933 (17 C.F.R. 230.144A),
n. a "major U.S. institutional investor" as defined in Rule
15a-6(b)(4)(i) adopted under the Securities Exchange Act of 1934 (17 C.F.R.
240.15a-6),
o. any other person, other than an individual, of
institutional character with total assets in excess of Ten Million Dollars
($10,000,000.00) not organized for the specific purpose of evading this act, or
p. any other person specified by rule adopted or order issued
under this act;
14. "Insurance company" means a company organized as an
insurer whose primary business is writing insurance or reinsuring risks
underwritten by insurance companies and that are subject to supervision by the
insurance commissioner or a similar official or agency of a state;
15. "Insured" means insured as to payment of all principal
and all interest;
16. "International banking institution" means an
international financial institution of which the United States is a member and
whose securities are exempt from registration under the Securities Act of 1933;
17. "Investment adviser" means a person that, for
compensation, engages in the business of advising others, either directly or
through publications or writings, as to the value of securities or the
advisability of investing in, purchasing, or selling securities or that, for
compensation and as a part of a regular business, issues or promulgates analyses
or reports concerning securities. The term includes a financial planner or other
person that, as an integral component of other financially related services,
provides investment advice to others for compensation as part of a business or
that holds itself out as providing investment advice to others for compensation.
The term does not include:
a. an investment adviser representative,
b. a lawyer, accountant, engineer, or teacher whose
performance of investment advice is solely incidental to the practice of the
person's profession,
c. a broker-dealer or its agents whose performance of
investment advice is solely incidental to the conduct of business as a
broker-dealer and that does not receive special compensation for the investment
advice,
d. a publisher of a bona fide newspaper, news magazine, or
business or financial publication of general and regular circulation,
e. a depository institution, or
f. any other person excluded by rule adopted or order issued
under this act;
18. "Investment adviser representative" means an individual
employed by or associated with an investment adviser or federal covered
investment adviser and who makes any recommendations or otherwise gives
investment advice regarding securities, manages accounts or portfolios of
clients, determines which recommendation or advice regarding securities should
be given, provides investment advice or holds herself or himself out as
providing investment advice, receives compensation to solicit, offer, or
negotiate for the sale of or for selling investment advice, or supervises
employees who perform any of the foregoing. The term does not include an
individual who:
a. performs only clerical or ministerial acts,
b. is an agent whose performance of investment advice is
solely incidental to the individual acting as an agent and who does not receive
special compensation for investment advisory services, or
c. is excluded by rule adopted or order issued under this
act;
19. "Issuer" means a person that issues or proposes to issue
a security, subject to the following:
a. the issuer of a voting trust certificate, collateral trust
certificate, certificate of deposit for a security, or share in an investment
company without a board of directors or individuals performing similar functions
is the person performing the acts and assuming the duties of depositor or
manager pursuant to the trust or other agreement or instrument under which the
security is issued,
b. the issuer of an equipment trust certificate or similar
security serving the same purpose is the person by which the property or
equipment is or will be used or to which the property or equipment is or will be
leased or conditionally sold or that is otherwise contractually responsible for
assuring payment of the certificate,
c. the issuer of a fractional undivided interest in an oil,
gas, or other mineral lease or in payments out of production under a lease,
right, or royalty is the owner of an interest in the lease or in payments out of
production under a lease, right, or royalty, whether whole or fractional, that
creates fractional interests for the purpose of sale;
20. "Nonissuer transaction" or "nonissuer distribution" means
a transaction or distribution not directly or indirectly for the benefit of the
issuer;
21. "Offer to purchase" includes an attempt or offer to
obtain, or solicitation of an offer to sell, a security or interest in a
security for value. The term does not include a tender offer that is subject to
Section 14(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78n(d));
22. "Person" means an individual; corporation; business
trust; estate; trust; partnership; limited liability company; association; joint
venture; government, governmental subdivision, agency, or instrumentality;
public corporation; or any other legal or commercial entity;
23. "Place of business" of a broker-dealer, an investment
adviser, or a federal covered investment adviser means:
a. an office at which the broker-dealer, investment adviser,
or federal covered investment adviser regularly provides brokerage or investment
advice or solicits, meets with, or otherwise communicates with customers or
clients, or
b. any other location that is held out to the general public
as a location at which the broker-dealer, investment adviser, or federal covered
investment adviser provides brokerage or investment advice or solicits, meets
with, or otherwise communicates with customers or clients;
24. "Predecessor act" means the act repealed by Section 52 of
this act [Section 1-701 of this title];
25. "Price amendment" means the amendment to a registration
statement filed under the Securities Act of 1933 or, if an amendment is not
filed, the prospectus or prospectus supplement filed under the Securities Act of
1933 that includes a statement of the offering price, underwriting and selling
discounts or commissions, amount of proceeds, conversion rates, call prices, and
other matters dependent upon the offering price;
26. "Principal place of business" of a broker-dealer or an
investment adviser means the executive office of the broker-dealer or investment
adviser from which the officers, partners, or managers of the broker-dealer or
investment adviser direct, control, and coordinate the activities of the
broker-dealer or investment adviser;
27. "Promoter" includes:
a. a person who, acting alone or in concert with one or more
persons, takes the entrepreneurial initiative in founding or organizing the
business or enterprise of an issuer,
b. an officer or director owning securities of an issuer or a
person who owns, beneficially or of record, ten percent (10%) or more of a class
of securities of the issuer if the officer, director, or person acquires any of
those securities in a transaction within three (3) years before the filing by
the issuer of a registration statement under this act and the transaction is not
an arms-length transaction, or
c. a member of the immediate family of a person within
subparagraph a or b of this paragraph if the family member receives securities
of the issuer from that person in a transaction within three (3) years before
the filing by the issuer of a registration statement under this act and the
transaction is not an arms-length transaction.
For purposes of this subsection, "immediate family" means a
spouse of a person within subparagraph a or b of this paragraph, an emancipated
child residing in such person’s household, or an individual claimed as a
dependent by such person for tax purposes;
28. "Record" except in the phrases "of record," "official
record," and "public record," means information that is inscribed on a tangible
medium or that is stored in an electronic or other medium and is retrievable in
perceivable form;
29. "Registration statement" means the documentation provided
to the Securities and Exchange Commission or the Department in connection with
the registration of securities under the Securities Act of 1933 or this title
and includes any amendment thereto and any report, document, exhibit or
memorandum filed as part of such statement or incorporated therein by reference;
30. "Sale" includes every contract of sale, contract to sell,
or disposition of, a security or interest in a security for value, and "offer to
sell" includes every attempt or offer to dispose of, or solicitation of an offer
to purchase, a security or interest in a security for value. Both terms include:
a. a security given or delivered with, or as a bonus on
account of, a purchase of securities or any other thing constituting part of the
subject of the purchase and having been offered and sold for value,
b. a gift of assessable stock involving an offer and sale,
and
c. a sale or offer of a warrant or right to purchase or
subscribe to another security of the same or another issuer and a sale or offer
of a security that gives the holder a present or future right or privilege to
convert the security into another security of the same or another issuer,
including an offer of the other security;
31. "Securities and Exchange Commission" means the United
States Securities and Exchange Commission;
32. "Security" means a note; stock; treasury stock; security
future; bond; debenture; evidence of indebtedness; certificate of interest or
participation in a profit-sharing agreement; collateral trust certificate;
preorganization certificate or subscription; transferable share; investment
contract; voting trust certificate; certificate of deposit for a security;
fractional undivided interest in oil, gas, or other mineral rights; put, call,
straddle, option, or privilege on a security, certificate of deposit, or group
or index of securities, including an interest therein or based on the value
thereof; put, call, straddle, option, or privilege entered into on a national
securities exchange relating to foreign currency; or, in general, an interest or
instrument commonly known as a "security," or a certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing. The
term:
a. includes both a certificated and an uncertificated
security,
b. does not include an insurance or endowment policy or
annuity contract under which an insurance company promises to pay a sum of money
either in a lump sum or periodically for life or other specified period,
c. does not include an interest in a contributory or
noncontributory pension or welfare plan subject to the Employee Retirement
Income Security Act of 1974,
d. includes as an "investment contract" an investment in a
common enterprise with the expectation of profits to be derived primarily from
the efforts of a person other than the investor and a "common enterprise" means
an enterprise in which the fortunes of the investor are interwoven with those of
either the person offering the investment, a third party, or other investors,
e. includes as an "investment contract," among other
contracts, an interest in a limited partnership and a third party managed
limited liability company and an investment in a viatical or life settlement or
similar contract or agreement,
f. includes an investment of money or money’s worth including
goods furnished or services performed in the risk capital of a venture with the
expectation of some benefit to the investor where the investor has no direct
control over the investment or policy decision of the venture, and
g. does not include an interest in an oil, gas or mineral
lease as part of a transaction between parties, each of whom is engaged in the
business of exploring for or producing oil and gas or other valuable minerals as
an ongoing business or the execution of oil and gas leases by land, mineral and
royalty owners in favor of a party or parties engaged in the business of
exploring for or producing oil and gas or other valuable minerals;
33. "Self-regulatory organization" means a national
securities exchange registered under the Securities Exchange Act of 1934, a
national securities association of broker-dealers registered under the
Securities Exchange Act of 1934, a clearing agency registered under the
Securities Exchange Act of 1934, or the Municipal Securities Rulemaking Board
established under the Securities Exchange Act of 1934;
34. "Sign" means, with present intent to authenticate or
adopt a record:
a. to execute or adopt a tangible symbol, or
b. to attach or logically associate with the record an
electronic symbol, sound, or process;
35. "State" means a state of the United States, the District
of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or
insular possession subject to the jurisdiction of the United States; and
36. "Underwriter" means any person who has purchased from an
issuer or from any other person with a view to, or offers or sells for an issuer
or for any other person 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. "Underwriter" does not include a person whose interest is
limited to a commission from an underwriter or broker-dealer not in excess of
the usual and customary distributor's or seller's commission.
§§ 1-103. References to federal statutes
"Securities Act of 1933" (15 U.S.C. Section 77a et seq.),
"Securities Exchange Act of 1934" (15 U.S.C. Section 78a et seq.), "Public
Utility Holding Company Act of 1935" (15 U.S.C. Section 79 et seq.), "Investment
Company Act of 1940" (15 U.S.C. Section 80a-1 et seq.), "Investment Advisers Act
of 1940" (15 U.S.C. Section 80b-1 et seq.), "Employee Retirement Income Security
Act of 1974" (29 U.S.C. Section 1001 et seq.), "National Housing Act" (12 U.S.C.
Section 1701 et seq.), "Commodity Exchange Act" (7 U.S.C. Section 1 et seq.),
"Internal Revenue Code" (26 U.S.C. Section 1 et seq.), "Securities Investor
Protection Act of 1970" (15 U.S.C. Section 78aaa et seq.), "Securities
Litigation Uniform Standards Act of 1998" (112 Stat. 3227), "Small Business
Investment Act of 1958" (15 U.S.C. Section 661 et seq.), and "Electronic
Signatures in Global and National Commerce Act" (15 U.S.C. Section 7001 et seq.)
mean those statutes and the rules and regulations adopted under those statutes,
as in effect on the date of enactment of this act, or as later amended.
§§ 1-104. Reference to federal agencies
A reference in this act to an agency or department of the
United States is also a reference to a successor agency or department.
§§ 1-105. Electronic records and signatures
This Act modifies, limits, and supersedes the federal
Electronic Signatures in Global and National Commerce Act, but does not
modify, limit, or supersede Section 101(c) of that act (15 U.S.C. Section
7001(c)) or authorize electronic delivery of any of the notices described in
Section 103(b) of that act (15 U.S.C. Section 7003(b)). This Act authorizes
the filing of records and signatures, when specified by provisions of this
act or by a rule adopted or order issued under this act, in a manner
consistent with Section 104(a) of that act (15 U.S.C. Section 7004(a)).
ARTICLE 2
EXEMPTIONS FROM REGISTRATION OF SECURITIES
§§ 1-201. Exempt securities
The following securities are exempt from the requirements
of Sections 10 and 32 of this act [Sections 1-301 and 1-504 of this title]:
1. A security, including a revenue obligation or a
separate security as defined in Rule 131 (17 C.F.R. 230.131) adopted
under the Securities Act of 1933, issued, insured, or guaranteed by the
United States; by a state; by a political subdivision of a state; by a
public authority, agency, or instrumentality of one or more states; by a
political subdivision of one or more states; or by a person controlled
or supervised by and acting as an instrumentality of the United States
under authority granted by the Congress; or a certificate of deposit for
any of the foregoing; however, notwithstanding the provisions of Section
106(c) of the Secondary Mortgage Market Enhancement Act of 1984, Public
Law 98-440, any security that is offered and sold pursuant to Section
4(5) of the Securities Act of 1933 or that is a mortgage related
security as that term is defined in Section 3(a)(41) of the Securities
Exchange Act of 1934 shall not be exempt from Sections 10 and 32 of this
act [Sections 1-301 and 1-504 of this title] by virtue of such Secondary
Mortgage Market Enhancement Act but may be exempt based upon the
availability of the exemptions from registration provided for in this
section;
2. A security issued, insured, or guaranteed by a
foreign government with which the United States maintains diplomatic
relations, or any of its political subdivisions, if the security is
recognized as a valid obligation by the issuer, insurer, or guarantor;
3. A security issued by and representing or that will
represent an interest in or a direct obligation of, or be guaranteed by:
a. an international banking institution,
b. a banking institution organized under the laws
of the United States; a member bank of the Federal Reserve System;
or a depository institution a substantial portion of the business of
which consists or will consist of receiving deposits or share
accounts that are insured to the maximum amount authorized by
statute by the Federal Deposit Insurance Corporation, the National
Credit Union Share Insurance Fund, or a successor authorized by
federal law or exercising fiduciary powers that are similar to those
permitted for national banks under the authority of the Comptroller
of Currency pursuant to Section 1 of Public Law 87-722 (12 U.S.C.
Section 92a),
c. a trust company or other institution that is
authorized by federal or state law to exercise fiduciary powers of
the type a national bank is permitted to exercise under the
authority of the Comptroller of the Currency and is supervised and
examined by an official or agency of a state or the United States,
or
d. any other depository institution;
4. A security issued by and representing an interest
in, or a debt of, or insured or guaranteed by, an insurance company
authorized to transact insurance business in this state by the Insurance
Commissioner;
5. A security issued or guaranteed by a railroad,
other common carrier, public utility, or public utility holding company
that is:
a. regulated in respect to its rates and charges
by the United States or a state,
b. regulated in respect to the issuance or
guarantee of the security by the United States, a state, Canada, or
a Canadian province or territory, or
c. a public utility holding company registered
under the Public Utility Holding Company Act of 1935 or a subsidiary
of such a registered holding company within the meaning of that act;
6. A federal covered security specified in Section
18(b)(1) of the Securities Act of 1933 (15 U.S.C. Section 77r(b)(1)) or
by rule adopted under that provision or a security listed or approved
for listing on another securities market specified by rule under this
act; a put or a call option contract, a warrant, or a subscription right
on or with respect to such securities; or an option or similar
derivative security on a security or an index of securities or foreign
currencies issued by a clearing agency registered under the Securities
Exchange Act of 1934 and listed or designated for trading on a national
securities exchange, a facility of a national securities exchange, or a
facility of a national securities association registered under the
Securities Exchange Act of 1934 or the underlying security in connection
with the offer, sale, or exercise of an option or other derivative
security that was exempt when the option or other derivative security
was written or issued; or an option or other derivative security
designated by the Securities and Exchange Commission under Section 9(b)
of the Securities Exchange Act of 1934 (15 U.S.C. Section 78i(b));
7. A security issued by a person organized and
operated exclusively for religious, educational, benevolent, fraternal,
charitable, social, athletic, or reformatory purposes, or as a chamber
of commerce, and not for pecuniary profit, no part of the net earnings
of which inures to the benefit of a private stockholder or other person,
or a security of a company that is excluded from the definition of an
investment company under Section 3(c)(10)(B) of the Investment Company
Act of 1940 (15 U.S.C. Section 80a-3(c)(10)(B)); except that with
respect to the offer or sale of a note, bond, debenture, or other
evidence of indebtedness issued by such a person, a rule may be adopted
under this act limiting the availability of this exemption by
classifying securities, persons, and transactions, imposing different
requirements for different classes, specifying with respect to
subparagraph b of this paragraph the scope of the exemption, the
requirement of an offering statement, the filing of sales and
advertising literature, the filing of consent to service of process
complying with Section 49 of this act [Section 1-611 of this title], and
the grounds for denial or suspension, and requiring an issuer:
a. to file a notice specifying the material terms
of the proposed offer or sale and copies of any proposed sales and
advertising literature to be used and providing that the exemption
becomes effective if the Administrator does not disallow the
exemption within the period established by the rule,
b. to file a request for exemption, or
c. to register under Section 13 of this act
[Section 1-304 of this title];
8. A member's or owner's interest in, or a retention
certificate or like security given in lieu of a cash patronage dividend
issued by, a cooperative organized and operated as a not for profit
membership cooperative under the cooperative laws of a state, but not a
member's or owner's interest, retention certificate, or like security
sold to persons other than bona fide members of the cooperative; and
9. An equipment trust certificate with respect to
equipment leased or conditionally sold to a person, if any security
issued by the person would be exempt under this section or would be a
federal covered security under Section 18(b)(1) of the Securities Act of
1933 (15 U.S.C. Section 77r(b)(1)).
§§ 1-202. Exempt transactions
The following transactions are exempt from the requirements of Sections 1-301 and 1-504 of the Oklahoma Uniform Securities Act of 2004:
1. An isolated nonissuer transaction, whether or not effected by or through a broker-dealer;
2. A nonissuer transaction by or through a broker-dealer registered, or exempt from registration under the Oklahoma Uniform
Securities Act of 2004, and a resale transaction by a sponsor of a unit investment trust registered under the Investment Company
Act of 1940, in a security of a class that has been outstanding in the hands of the public for at least ninety (90) days, if, at
the date of the transaction:
a. the issuer of the security is engaged in
business, the issuer is not in the organizational stage or in
bankruptcy or receivership, and the issuer is not a blank check,
blind pool, or shell company that has no specific business plan or
purpose or has indicated that its primary business plan is to engage
in a merger or combination of the business with, or an acquisition
of, an unidentified person,
b. the security is sold at a price reasonably
related to its current market price,
c. the security does not constitute the whole or
part of an unsold allotment to, or a subscription or participation
by, the broker-dealer as an underwriter of the security or a
redistribution, and
d. a nationally recognized securities manual or
its electronic equivalent designated by rule adopted or order issued
under this act or a record filed with the Securities and Exchange
Commission that is publicly available contains:
(1) a description of the business and
operations of the issuer,
(2) the names of the issuer's executive
officers and the names of the issuer's directors, if any,
(3) an audited balance sheet of the issuer as
of a date within eighteen (18) months before the date of the
transaction or, in the case of a reorganization or merger when
the parties to the reorganization or merger each had an audited
balance sheet, a pro forma balance sheet for the combined
organization, and
(4) an audited income statement for each of
the issuer's two (2) immediately previous fiscal years or for
the period of existence of the issuer, whichever is shorter, or,
in the case of a reorganization or merger when each party to the
reorganization or merger had audited income statements, a pro
forma income statement, or
e. the issuer of the security has a class of
equity securities listed on a national securities exchange
registered under the Securities Exchange Act of 1934 or designated
for trading on the National Association of Securities Dealers
Automated Quotation System, unless the issuer of the security is a
unit investment trust registered under the Investment Company Act of
1940; or the issuer of the security, including its predecessors, has
been engaged in continuous business for at least three (3) years; or
the issuer of the security has total assets of at least Two Million
Dollars ($2,000,000.00) based on an audited balance sheet as of a
date within eighteen (18) months before the date of the transaction
or, in the case of a reorganization or merger when the parties to
the reorganization or merger each had the audited balance sheet, a
pro forma balance sheet for the combined organization;
3. A nonissuer transaction by or through a
broker-dealer registered or exempt from registration under this act in a
security of a foreign issuer that is a margin security defined in
regulations or rules adopted by the Board of Governors of the Federal
Reserve System;
4. A nonissuer transaction by or through a broker-dealer registered or exempt from registration under the Oklahoma Uniform
Securities Act of 2004 in an outstanding security if the guarantor of the security files reports with the Securities and Exchange
Commission under the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m
or 78o(d));
5. A nonissuer transaction by or through a broker-dealer registered or exempt from registration under the Oklahoma Uniform
Securities Act of 2004 in a security that:
a. is rated at the time of the transaction by a
nationally recognized statistical rating organization in one of its
four highest rating categories, or
b. has a fixed maturity or a fixed interest or
dividend, if:
(1) a default has not occurred during the
current fiscal year or within the three (3) previous fiscal
years or during the existence of the issuer and any predecessor
if less than three (3) fiscal years, in the payment of
principal, interest, or dividends on the security, and
(2) the issuer is engaged in business, is not
in the organizational stage or in bankruptcy or receivership,
and is not and has not been within the previous twelve (12)
months a blank check, blind pool, or shell company that has no
specific business plan or purpose or has indicated that its
primary business plan is to engage in a merger or combination of
the business with, or an acquisition of, an unidentified person;
6. A nonissuer transaction by or through a broker-dealer registered or exempt from registration under the Oklahoma Uniform
Securities Act of 2004 effecting an unsolicited order or offer to purchase;
7. A nonissuer transaction executed by a bona fide pledgee without the purpose of evading the Oklahoma Uniform Securities Act of 2004;
8. A nonissuer transaction by a federal covered
investment adviser with investments under management in excess of One
Hundred Million Dollars ($100,000,000.00) acting in the exercise of
discretionary authority in a signed record for the account of others;
9. A transaction in a security, whether or not the
security or transaction is otherwise exempt, in exchange for one or more
bona fide outstanding securities, claims, or property interests, or
partly in such exchange and partly for cash, if the terms and conditions
of the issuance and exchange or the delivery and exchange and the
fairness of the terms and conditions have been approved by the
Administrator after a hearing;
10. A transaction between the issuer or other person
on whose behalf the offering is made and an underwriter, or among
underwriters;
11. A transaction in a note, bond, debenture, or
other evidence of indebtedness secured by a mortgage or other security
agreement if:
a. the note, bond, debenture, or other evidence
of indebtedness is offered and sold with the mortgage or other
security agreement as a unit,
b. a general solicitation or general
advertisement of the transaction is not made, and
c. a commission or other remuneration is not paid or given, directly or indirectly, to a person not registered under the
Oklahoma Uniform Securities Act of 2004 as a broker-dealer or as an agent;
12. A transaction by an executor, administrator of an
estate, sheriff, marshal, receiver, trustee in bankruptcy, guardian, or
conservator;
13. A sale or offer to sell to:
a. an institutional investor,
b. a federal covered investment adviser, or
c. any other person exempted by rule adopted or order issued under the Oklahoma Uniform Securities Act of 2004;;
14. A sale or an offer to sell securities by an
issuer, if the transaction is part of a single issue in which:
a. not more than twenty-five purchasers during
any twelve (12) consecutive months, other than those designated in
paragraph 13 of this section,
b. a general solicitation or general advertising
is not made in connection with the offer to sell or sale of the
securities,
c. a commission or other remuneration is not paid or given, directly or indirectly, to a person other than a broker-dealer
registered under the Oklahoma Uniform Securities Act of 2004 or an agent registered under the Oklahoma Uniform
Securities Act of 2004 for soliciting a prospective purchaser in this state, and
d. the issuer reasonably believes that all the
purchasers in this state, other than those designated in paragraph
13 of this section, are purchasing for investment;
15. A transaction under an offer to existing security
holders of the issuer, including persons that at the date of the
transaction are holders of convertible securities, options, or warrants,
if:
a. no commission or other remuneration, other
than a standby commission, is paid or given, directly or indirectly,
for soliciting a security holder in this state, or
b. the issuer first files a notice specifying the
terms of the offer and the Administrator, by order, does not
disallow the exemption within the next ten (10) full business days;
16. A sale from or in this state to not more than
thirty-two persons of a unit consisting of interests in oil, gas or
mining titles or leases or any certificate of interest or participation,
or conveyance in any form of an interest therein, or in payments out of
production pursuant to such titles or leases, whether or not offered in
conjunction with, or as an incident to, an operating agreement or other
contract to drill oil or gas wells or otherwise exploit the minerals on
the particular leases, whether or not the seller or any buyers are then
present in this state, if:
a. the seller reasonably believes that all buyers
are purchasing for investment,
b. no commission is paid or given directly or
indirectly for the solicitation of any such sale excluding any
commission paid or given by and between parties each of whom is
engaged in the business of exploring for or producing oil and gas or
other valuable minerals,
c. no public advertising or public solicitation
is used in any such solicitation or sale, and
d. sales are effected only to persons the seller
has reasonable cause to believe are capable of evaluating the risk
of the prospective investment and able to bear the economic risk of
the investment; but the Administrator, by rule or order, as to any
specific transaction, may withdraw or further condition this
exemption or decrease the number of sales permitted or waive the
conditions in subparagraphs a, b and c of this paragraph, with or
without substitution of a limitation on remuneration.
For purposes of this subsection, no units of the
issuer shall be integrated; however, this exemption cannot be
combined or used in conjunction with any other transactional
exemption;
17. An offer to sell, but not a sale, of a security
not exempt from registration under the Securities Act of 1933 if:
a. a registration or offering statement or
similar record as required under the Securities Act of 1933 has been
filed, but is not effective, or the offer is made in compliance with
Rule 165 adopted under the Securities Act of 1933 (17 C.F.R.
230.165), and
b. no stop order of which the offeror is aware
has been issued against the offeror by the Administrator or the
Securities and Exchange Commission, and an audit, inspection, or
proceeding that is public and that may culminate in a stop order is
not known by the offeror to be pending;
18. An offer to sell, but not a sale, of a security
exempt from registration under the Securities Act of 1933 if:
a. a registration statement has been filed under
this act, but is not effective,
b. a solicitation of interest is provided in a record to offerees in compliance with a rule adopted by the Administrator
under the Oklahoma Uniform Securities Act of 2004, and
c. a stop order of which the offeror is aware has not been issued by the Administrator under the Oklahoma Uniform
Securities Act of 2004 and an audit, inspection, or proceeding that may culminate in a stop order is not known by
the offeror to be pending;
19. A transaction involving the distribution of the
securities of an issuer to the security holders of another person in
connection with a merger, consolidation, exchange of securities, sale of
assets, or other reorganization to which the issuer, or its parent or
subsidiary and the other person, or its parent or subsidiary, are
parties if:
a. the securities to be distributed are
registered under the Securities Act of 1933 before the vote by
security holders on the transaction, or
b. the securities to be distributed are not
required to be registered under the Securities Act of 1933, written
notice of the transaction and a copy of the materials, if any, by
which approval of the transaction will be solicited from such
security holders is given to the Administrator at least ten (10)
full business days before the vote by security holders on the
transaction and the Administrator does not commence a proceeding to
deny the exemption within the next ten (10) full business days;
however, such notice shall not be required if the sole purpose of
the transaction is to change an issuer’s domicile solely within the
United States;
20. A rescission offer, sale, or purchase under Section 38 of the Oklahoma Uniform Securities Act of 2004;
21. An offer or sale of a security through a broker-dealer registered under the Oklahoma Uniform Securities Act of 2004 to a
person not a resident of this state and not present in this state if the offer or sale does not constitute a violation of the laws of
the state or foreign jurisdiction in which the offeree or purchaser is present and is not part of an unlawful plan or scheme to
evade the Oklahoma Uniform Securities Act of 2004;
22. Employees' stock purchase, savings, option,
profit-sharing, pension, or similar employees' benefit plan, including
any securities, plan interests, and guarantees issued under a
compensatory benefit plan or compensation contract, contained in a
record, established by the issuer, its parents, its majority-owned
subsidiaries, or the majority-owned subsidiaries of the issuer's parent
for the participation of their employees including offers or sales of
such securities to:
a. directors; general partners; trustees, if the
issuer is a business trust; and officers,
b. family members who acquire such securities
from those persons through gifts or domestic relations orders,
c. former employees, directors, general partners,
trustees, and officers if those individuals were employed by or
providing services to the issuer when the securities were offered,
and
d. insurance agents who are exclusive insurance
agents of the issuer, or the issuer's subsidiaries or parents, or
who derive more than fifty percent (50%) of their annual income from
those organizations;
23. A transaction involving:
a. a stock dividend or equivalent equity
distribution, whether the corporation or other business organization
distributing the dividend or equivalent equity distribution is the
issuer or not, if nothing of value is given by stockholders or other
equity holders for the dividend or equivalent equity distribution
other than the surrender of a right to a cash or property dividend
if each stockholder or other equity holder may elect to take the
dividend or equivalent equity distribution in cash, property, or
stock,
b. an act incident to a judicially approved
reorganization in which a security is issued in exchange for one or
more outstanding securities, claims, or property interests, or
partly in such exchange and partly for cash, or
c. the solicitation of tenders of securities by
an offeror in a tender offer in compliance with Rule 162 adopted
under the Securities Act of 1933 (17 C.F.R. 230.162);
24. A nonissuer transaction in an outstanding security by or through a broker-dealer registered or exempt from registration
under this act, if the issuer is a reporting issuer in a foreign jurisdiction designated by this paragraph or by rule adopted or
order issued under the Oklahoma Uniform Securities Act of 2004; has been subject to continuous reporting requirements in
the foreign jurisdiction for not less than one hundred eighty (180) days before the transaction; and the security is listed on the
foreign jurisdiction's securities exchange that has been designated by this paragraph or by rule adopted or order issued under
the Oklahoma Uniform Securities Act of 2004, or is a security of the same issuer that is of senior or substantially equal rank
to the listed security or is a warrant or right to purchase or subscribe to any of the foregoing. For purposes of this paragraph,
Canada, together with its provinces and territories, is a designated foreign jurisdiction and The Toronto Stock Exchange, Inc., is
a designated securities exchange. After an administrative hearing in compliance with the Administrative Procedures Act, 3 the
Administrator, by rule adopted or order issued under the Oklahoma Uniform Securities Act of 2004, may revoke the designation
of a securities exchange under this paragraph, if the Administrator finds that revocation is necessary or appropriate in the public
interest and for the protection of investors; or
25. A sale or offer to sell a security by an issuer if:
a. the issuer is a corporation or other business entity residing in and doing business in this state and the transaction meets
the requirements of the federal exemption for intrastate offerings in Section 3(a)(11) of the Securities Act of 1933,
15 U.S.C. 77c(a)(11) and Rule 147A adopted under the Securities Act of 1933 (17 C.F.R. 230.147A) and as such the
securities shall be sold only to persons who are residents of this state at the time of purchase,
b. the sum of all cash and other consideration to be received for the sale of securities in reliance on this exemption shall
be limited to Five Million Dollars ($5,000,000.00),
c. the aggregate value of securities sold under this exemption by an issuer to any one person does not exceed Five
Thousand Dollars ($5,000.00) unless the purchaser is an accredited investor as that term is defined by Rule 501 of
Regulation D of the Securities Act of 1933 (17 C.F.R. 230.501),
d. a commission or other renumeration is not paid or given, directly or indirectly, to a person not registered under the
Oklahoma Uniform Securities Act of 2004 as a broker-dealer or as an agent,
e. the issuer reasonably believes that all purchasers are purchasing for investment and not for sale in connection with
a distribution of the security,
f. the issuer distributes to prospective purchasers a disclosure document containing the information set forth by rule
adopted under the Oklahoma Uniform Securities Act of 2004,
g. the issuer, at least ten (10) business days prior to a sale, files a notice of exemption with the Department accompanied
by the disclosure document required by paragraph f of this subsection, and the filing fee set forth in the Oklahoma
Uniform Securities Act of 2004, pursuant to Section 1-612 of Title 71 of the Oklahoma Statutes,
h. the issuer files with the Department, for as long as the offering is continuing, quarterly and fiscal year-end reports
containing any changes to information that has become inaccurate or incomplete in any material respect including,
but not limited to, the most recent financial statements, and
i. the issuer holds funds received from sales made in reliance on this exemption in an escrow account established in a
bank or depository institution authorized to do business in this state and subject to regulation under the laws of the
United States or under the laws of this state until the aggregate funds raised from all purchases is equal to or greater
than the minimum target offering amount specified in the disclosure document. All funds shall be used in accordance
with the representations made by the issuer in the disclosure document required by subparagraph f of this paragraph.
Notwithstanding the foregoing provisions of this subsection, an issuer shall be prohibited from offering securities under this
subsection if the issuer or any of its principals or control persons:
(1) within the last five (5) years has filed a registration statement that is the subject of a currently effective registration
stop order entered by any state securities administrator or the Securities and Exchange Commission,
(2) within the last five (5) years has been convicted of any criminal offense in connection with the offer, purchase,
or sale of any security or involving fraud or deceit,
(3) is currently subject to any state or federal administrative enforcement order or judgment entered within the last
five (5) years finding fraud or deceit in connection with the purchase or sale of any security, or
(4) is currently subject to any order, judgment or decree of any court of competent jurisdiction entered within the
last five (5) years temporarily, preliminarily or permanently restraining or enjoining such party from engaging in
or continuing to engage in any conduct or practice involving fraud or deceit in connection with the purchase or
sale of any security.
Nothing in this subsection prohibits the use of general solicitation or general advertising in connection with the exemption
under this subsection.
As to a particular offering, the Administrator may by rule or order withdraw or further condition the exemption under this
subsection.
§§ 1-203. Additional exemptions and waivers
A rule adopted or order issued under this act may exempt
a security, transaction, or offer; a rule under this act may exempt a class
of securities, transactions, or offers from any or all of the requirements
of Sections 10 and 32 of this act [Sections 1-301 and 1-504 of this title];
and an order under this act may waive, in whole or in part, any or all of
the conditions for an exemption or offer under Sections 6 and 7 of this act
[Sections 1-201 and 1-202 of this title].
§§ 1-204. Denial, suspension of application, revocation,
condition, or limitation of exemptions
A. Except with respect to a federal covered security or a
transaction involving a federal covered security, an order under this act
may deny, suspend application of, condition, limit, or revoke an exemption
created under subparagraph c or d of paragraph 3 of Section 6 of this act
[Section 1-201 of this title], or paragraph 7 or 8 of Section 6 of this act
[Section 1-201 of this title] or Section 7 of this act [Section 1-202 of
this title] or an exemption or waiver created under Section 8 of this act
[Section 1-203 of this title] with respect to a specific security,
transaction, or offer. An order under this section may be issued only
pursuant to the procedures in subsection D of Section 15 or Section 42 of
this act [Section 1-306 or Section 1-604 of this title] and only
prospectively.
B. A person does not violate Section 10, 32 or 38 of this
act [Section 1-301, 1-504 or 1-510 of this title] by an offer to sell, offer
to purchase, sale, or purchase effected after the entry of an order issued
under this section if the person did not know, and in the exercise of
reasonable care could not have known, of the order.
ARTICLE 3
REGISTRATION OF SECURITIES AND
NOTICE FILING OF FEDERAL COVERED SECURITIES
§§ 1-301. Offer or Sell Security in State
It is unlawful for a person to offer or sell a security in
this state unless:
1. The security is a federal covered security;
2. The security, transaction, or offer is exempted from
registration under Sections 6 through 8 of this act [Sections 1-201 through
1-203 of this title]; or
3. The security is registered under this act.
§§ 1-302. Federal
covered security notice filing
A. With respect to a federal covered security, as defined
in Section 18(b)(2) of the Securities Act of 1933, 15 U.S.C. Section
77r(b)(2), that is not otherwise exempt under Sections 1-201 through 1-203
of this title, the issuer shall file a notice with the Administrator prior
to an offer in this state. A separate notice shall be filed for each class
of an issuer's securities offered in this state. Each notice shall be for an
indefinite amount of securities. A notice, or renewal thereof, shall be
accompanied by the filing fee set forth in Section 1-612 of this title. The
Administrator may, by rule or order, prescribe notice filing and renewal
requirements, and the requirements for filing of reports of the dollar
amount of securities sold or offered to be sold to persons located in this
state.
B. A notice filing under subsection A of this section is
effective for one (1) year commencing on the later of the notice filing or
the effectiveness of the offering filed with the Securities and Exchange
Commission. On or before expiration, the issuer may renew a notice filing by
filing a copy of those records filed by the issuer with the Securities and
Exchange Commission that are required by rule or order under this act to be
filed and by paying a renewal fee as provided in Section 1-612 of this
title. A previously filed consent to service of process complying with
Section 1-611 of this title may be incorporated by reference in a renewal. A
renewed notice filing becomes effective upon the expiration of the filing
being renewed.
C. 1. With respect to a security that is a federal covered
security under Section 18(b)(4)(E) of the Securities Act of 1933, 15 U.S.C.
Section 77r(b)(4)(E), [currently renumbered as Section 18(b)(4)(F) of the
Securities Act of 1933, 15 U.S.C. Section 77r(b)(4)(F)], a rule under this
act may require a notice filing by or on behalf of an issuer as allowed by
applicable federal law.
2. With respect to a security that is a federal covered
security under Section 18(b)(3) or Section 18(b)(4)(D)(ii) of the Securities
Act of 1933, 15 U.S.C. Section 77r(b)(3) and 77r(b)(4)(D)(ii), a rule under
this act may require a notice filing by or on behalf of an issuer as allowed
by applicable federal law.
D. Except with respect to a federal covered security under
Section 18(b)(1) of the Securities Act of 1933, 15 U.S.C. Section 77r(b)(1),
if the Administrator finds that there is a failure to comply with a notice
or fee requirement of this section, the Administrator may issue a stop order
suspending the offer and sale of a federal covered security in this state.
If the deficiency is corrected, the stop order is void as of the time of its
issuance and no penalty may be imposed by the Administrator.
§§ 1-303. Securities registration by coordination
A. A security for which a registration statement has been
filed under the Securities Act of 1933 in connection with the same offering
may be registered by coordination under this section.
B. A registration statement under this section must contain
or be accompanied by the following records in addition to the information
specified in Section 14 of this act [Section 1-305 of this title] and a
consent to service of process complying with Section 49 of this act [Section
1-611 of this title]:
1. A copy of the latest form of prospectus filed under
the Securities Act of 1933;
2. A copy of the articles of incorporation and bylaws or
their substantial equivalents currently in effect; a copy of any agreement
with or among underwriters; a copy of any indenture or other instrument
governing the issuance of the security to be registered; and a specimen,
copy, or description of the security that is required by rule adopted or
order issued under this act;
3. Copies of any other information or any other records
filed by the issuer under the Securities Act of 1933 requested by the
Administrator; and
4. An undertaking to forward each amendment to the
federal prospectus, other than an amendment that delays the effective date
of the registration statement, promptly after it is filed with the
Securities and Exchange Commission and in any event not later than the first
business day after the day the amendment is forwarded to or filed with the
Securities and Exchange Commission, whichever first occurs.
C. A registration statement under this section becomes
effective simultaneously with or subsequent to the federal registration
statement when all the following conditions are satisfied:
1. A stop order under subsection D of this section or
Section 15 of this act [Section 1-306 of this title] or issued by the
Securities and Exchange Commission is not in effect and a proceeding is not
pending against the issuer under Section 15 of this act [Section 1-306 of
this title]; and
2. The registration statement has been on file for at
least twenty (20) days or a shorter period provided by rule adopted or order
issued under this act.
D. The registrant shall promptly notify the Administrator
in a record of the date when the federal registration statement becomes
effective and the content of any price amendment and shall promptly file a
record containing the price amendment. If the notice is not timely received,
the Administrator may issue a stop order, without prior notice or hearing,
retroactively denying effectiveness to the registration statement or
suspending its effectiveness until compliance with this section. The
Administrator shall promptly notify the registrant of the order by telegram,
telephone, or electronic means and promptly confirm this notice by a record.
If the registrant subsequently complies with the notice requirements of this
section, the stop order is void as of the date of its issuance.
E. If the federal registration statement becomes effective
before each of the conditions in this section is satisfied or is waived by
the Administrator, the registration statement is automatically effective
under this act when all the conditions are satisfied or waived. If the
registrant notifies the Administrator of the date when the federal
registration statement is expected to become effective, the Administrator
shall promptly notify the registrant by telegram, telephone, or electronic
means and promptly confirm this notice by a record, indicating whether all
the conditions are satisfied or waived and whether the Administrator intends
the institution of a proceeding under Section 15 of this act [Section 1-306
of this title]. The notice by the Administrator does not preclude the
institution of such a proceeding.
§§ 1-304. Securities registration by qualification
A. A security may be registered by qualification under this
section.
B. A registration statement under this section must contain
the information or records specified in Section 14 of this act [Section
1-305 of this title], a consent to service of process complying with Section
49 of this act [Section 1-611 of this title], and the following information
or records:
1. With respect to the issuer and any significant
subsidiary, its name, address, and form of organization; the state or
foreign jurisdiction and date of its organization; the general character and
location of its business; a description of its physical properties and
equipment; and a statement of the general competitive conditions in the
industry or business in which it is or will be engaged;
2. With respect to each director and officer of the
issuer, and other person having a similar status or performing similar
functions, the person's name, address, and principal occupation for the
previous five (5) years; the amount of securities of the issuer held by the
person as of the 30th day before the filing of the registration statement;
the amount of the securities covered by the registration statement to which
the person has indicated an intention to subscribe; and a description of any
material interest of the person in any material transaction with the issuer
or a significant subsidiary effected within the previous three (3) years or
proposed to be effected;
3. With respect to persons covered by paragraph 2 of this
subsection, the aggregate sum of the remuneration paid to those persons
during the previous twelve (12) months and estimated to be paid during the
next twelve (12) months, directly or indirectly, by the issuer, and all
predecessors, parents, subsidiaries, and affiliates of the issuer;
4. With respect to a person owning of record or owning
beneficially, if known, ten percent (10%) or more of the outstanding shares
of any class of equity security of the issuer, the information or records
specified in paragraph 2 of this subsection other than the person's
occupation;
5. With respect to a promoter, if the issuer was
organized within the previous three (3) years, the information or records
specified in paragraph 2 of this subsection, any amount paid to the promoter
within that period or intended to be paid to the promoter, and the
consideration for the payment;
6. With respect to a person on whose behalf any part of
the offering is to be made in a nonissuer distribution, the person's name
and address; the amount of securities of the issuer held by the person as of
the date of the filing of the registration statement; a description of any
material interest of the person in any material transaction with the issuer
or any significant subsidiary effected within the previous three (3) years
or proposed to be effected; and a statement of the reasons for making the
offering;
7. The capitalization and long term debt, on both a
current and pro forma basis, of the issuer and any significant subsidiary,
including a description of each security outstanding or being registered or
otherwise offered, and a statement of the amount and kind of consideration,
whether in the form of cash, physical assets, services, patents, goodwill,
or anything else of value, for which the issuer or any subsidiary has issued
its securities within the previous two (2) years or is obligated to issue
its securities;
8. The kind and amount of securities to be offered; the
proposed offering price or the method by which it is to be computed; any
variation at which a proportion of the offering is to be made to a person or
class of persons other than the underwriters, with a specification of the
person or class; the basis on which the offering is to be made if otherwise
than for cash; the estimated aggregate underwriting and selling discounts or
commissions and finders' fees, including separately cash, securities,
contracts, or anything else of value to accrue to the underwriters or
finders in connection with the offering or, if the selling discounts or
commissions are variable, the basis of determining them and their maximum
and minimum amounts; the estimated amounts of other selling expenses,
including legal, engineering, and accounting charges; the name and address
of each underwriter and each recipient of a finder's fee; a copy of any
underwriting or selling group agreement under which the distribution is to
be made or the proposed form of any such agreement whose terms have not yet
been determined; and a description of the plan of distribution of any
securities that are to be offered otherwise than through an underwriter;
9. The estimated monetary proceeds to be received by the
issuer from the offering; the purposes for which the proceeds are to be used
by the issuer; the estimated amount to be used for each purpose; the order
or priority in which the proceeds will be used for the purposes stated; the
amounts of any funds to be raised from other sources to achieve the purposes
stated; the sources of the funds; and, if a part of the proceeds is to be
used to acquire property, including goodwill, otherwise than in the ordinary
course of business, the names and addresses of the vendors, the purchase
price, the names of any persons that have received commissions in connection
with the acquisition, and the amounts of the commissions and other expenses
in connection with the acquisition, including the cost of borrowing money to
finance the acquisition;
10. A description of any stock options or other security
options outstanding, or to be created in connection with the offering, and
the amount of those options held or to be held by each person required to be
named in paragraph 2, 4, 5, 6, or 8 of this subsection and by any person
that holds or will hold ten percent (10%) or more in the aggregate of those
options;
11. The dates of, parties to, and general effect
concisely stated of each managerial or other material contract made or to be
made otherwise than in the ordinary course of business to be performed in
whole or in part at or after the filing of the registration statement or
that was made within the previous two (2) years, and a copy of the contract;
12. A description of any pending litigation, action, or
proceeding to which the issuer is a party and that materially affects its
business or assets, and any litigation, action, or proceeding known to be
contemplated by governmental authorities;
13. A copy of any prospectus, pamphlet, circular, form
letter, advertisement, or other sales literature intended as of the
effective date to be used in connection with the offering and any
solicitation of interest used in compliance with subparagraph b of paragraph
18 of Section 7 of this act [Section 1-202 of this title];
14. A specimen or copy of the security being registered,
unless the security is uncertificated; a copy of the issuer's articles of
incorporation and bylaws or their substantial equivalents, in effect; and a
copy of any indenture or other instrument covering the security to be
registered;
15. A signed or conformed copy of an opinion of counsel
concerning the legality of the security being registered, with an English
translation if it is in a language other than English, which states whether
the security when sold will be validly issued, fully paid, and nonassessable
and, if a debt security, a binding obligation of the issuer;
16. A signed or conformed copy of a consent of any
accountant, engineer, appraiser, or other person whose profession gives
authority for a statement made by the person, if the person is named as
having prepared or certified a report or valuation, other than an official
record, that is public, which is used in connection with the registration
statement;
17. A balance sheet of the issuer as of a date within
four (4) months before the filing of the registration statement; a statement
of income and changes in financial position for each of the three (3) fiscal
years preceding the date of the balance sheet and for any period between the
close of the immediately previous fiscal year and the date of the balance
sheet, or for the period of the issuer's and any predecessor's existence if
less than three (3) years; and, if any part of the proceeds of the offering
is to be applied to the purchase of a business, the financial statements
that would be required if that business were the registrant; and
18. Any additional information or records required by
rule adopted or order issued under this act.
C. A registration statement under this section becomes
effective thirty (30) days, or any shorter period provided by rule adopted
or order issued under this act, after the date the registration statement or
the last amendment other than a price amendment is filed, if:
1. A stop order is not in effect and a proceeding is not
pending under Section 15 of this act [Section 1-306 of this title];
2. The Administrator has not issued an order under
Section 15 of this act [Section 1-306 of this title] postponing
effectiveness; and
3. The applicant or registrant has not requested that
effectiveness be delayed.
D. The Administrator may delay effectiveness once for not
more than ninety (90) days if the Administrator determines the registration
statement is not complete in all material respects and promptly notifies the
applicant or registrant of that determination. The Administrator may also
delay effectiveness for a further period of not more than thirty (30) days
if the Administrator determines that the delay is necessary or appropriate.
E. A rule adopted or order issued under this act may
require as a condition of registration under this section that a prospectus
containing a specified part of the information or record specified in
subsection B of this section be sent or given to each person to which an
offer is made, before or concurrently, with the earliest of:
1. The first offer made in a record to the person
otherwise than by means of a public advertisement, by or for the account of
the issuer or another person on whose behalf the offering is being made or
by an underwriter or broker-dealer that is offering part of an unsold
allotment or subscription taken by the person as a participant in the
distribution;
2. The confirmation of a sale made by or for the account
of the person;
3. Payment pursuant to such a sale; or
4. Delivery of the security pursuant to such a sale.
§§ 1-305. Registration -- Requirements and provisions
A. A registration statement may be filed by the issuer, a
person on whose behalf the offering is to be made, or a broker-dealer
registered under this act.
B. A person filing a registration statement shall pay the
filing fee set forth in Section 50 of this act [Section 1-612 of this
title]. If a registration statement is withdrawn before the effective date
or a preeffective stop order is issued under Section 15 of this act [Section
1-306 of this title], the Administrator shall retain the fee.
C. A registration statement filed under Section 12 or 13 of
this act [Section 1-303 or 1-304 of this title] must specify:
1. The amount of securities to be offered in this state;
2. The states in which a registration statement or
similar record in connection with the offering has been or is to be filed;
and
3. Any adverse order, judgment, or decree issued in
connection with the offering by a state securities regulator, the Securities
and Exchange Commission, or a court.
D. A record filed under this act or the predecessor act
within five (5) years preceding the filing of a registration statement may
be incorporated by reference in the registration statement to the extent
that the record is currently accurate.
E. In the case of a nonissuer distribution, information or
a record may not be required under subsection I of this section or Section
13 of this act [Section 1-304 of this title], unless it is known to the
person filing the registration statement or to the person on whose behalf
the distribution is to be made or unless it can be furnished by those
persons without unreasonable effort or expense.
F. A rule adopted or order issued under this act may
require as a condition of registration that a security issued within the
previous five (5) years or to be issued to a promoter for a consideration
substantially less than the public offering price or to a person for a
consideration other than cash be deposited in escrow; and that the proceeds
from the sale of the registered security in this state be impounded until
the issuer receives a specified amount from the sale of the security either
in this state or elsewhere. The conditions of any escrow or impoundment
required under this subsection may be established by rule adopted or order
issued under this act, but the Administrator may not reject a depository
institution solely because of its location in another state.
G. A rule adopted or order issued under this act may
require as a condition of registration that a security registered under this
act be sold only on a specified form of subscription or sale contract and
that a signed or conformed copy of each contract be filed under this act or
preserved for a period specified by the rule or order, which may not be
longer than five (5) years.
H. Except while a stop order is in effect under Section 15
of this act [Section 1-306 of this title], a registration statement is
effective for one year after its effective date, or for any longer period
designated in an order under this act during which the security is being
offered or distributed in a nonexempted transaction by or for the account of
the issuer or other person on whose behalf the offering is being made or by
an underwriter or broker-dealer that is still offering part of an unsold
allotment or subscription taken as a participant in the distribution. For
the purposes of a nonissuer transaction, all outstanding securities of the
same class identified in the registration statement as a security registered
under this act are considered to be registered while the registration
statement is effective. If any securities of the same class are outstanding,
a registration statement may not be withdrawn until one year after its
effective date. A registration statement may be withdrawn only with the
approval of the Administrator.
I. While a registration statement is effective, the person
that filed the registration statement shall file reports, not more often
than quarterly, to keep the information or other record in the registration
statement reasonably current and to disclose the progress of the offering.
J. A registration statement may be amended after its
effective date. The posteffective amendment becomes effective when the
Administrator so orders. If a posteffective amendment is made to increase
the number of securities specified to be offered or sold, the person filing
the amendment shall pay a registration fee as provided in Section 50 of this
act [Section 1-612 of this title]. A posteffective amendment relates back to
the date of the offering of the additional securities being registered if,
within one year after the date of the sale, the amendment is filed and the
additional registration fee is paid.
K. The records of an issuer registered or required to be
registered under this act are subject to such reasonable periodic, special,
or other audits or inspections by a representative of the Administrator,
within or without this state, as the Administrator considers necessary or
appropriate in the public interest and for the protection of investors. An
audit or inspection may be made at any time and without prior notice. The
Administrator may copy, and remove for audit or inspection copies of, all
records the Administrator reasonably considers necessary or appropriate to
conduct the audit or inspection. The Administrator may assess a reasonable
charge for conducting an audit or inspection under this subsection.
§§ 1-306. Denial, suspension, or revocation of
effectiveness of registration statement
A. The Administrator may issue a stop order denying
effectiveness to, or suspending or revoking the effectiveness of, a
registration statement if the Administrator finds that the order is in the
public interest and that:
1. The registration statement as of its effective date or
before the effective date in the case of an order denying effectiveness, an
amendment under subsection J of Section 14 of this act [Section 1-305 of
this title] as of its effective date, or a report under subsection I of
Section 14 of this act [Section 1-305 of this title], is incomplete in a
material respect or contains a statement that, in the light of the
circumstances under which it was made, was false or misleading with respect
to a material fact;
2. This act or a rule adopted or order issued under this
act or a condition imposed under this act has been willfully violated, in
connection with the offering, by the person filing the registration
statement; by the issuer, a partner, officer, or director of the issuer or a
person having a similar status or performing a similar function, a promoter
of the issuer, or a person directly or indirectly controlling or controlled
by the issuer, but only if the person filing the registration statement is
directly or indirectly controlled by or acting for the issuer; or by an
underwriter;
3. The security registered or sought to be registered is
the subject of a permanent or temporary injunction of a court of competent
jurisdiction or an administrative stop order or similar order issued under
any federal, foreign, or state law other than this act applicable to the
offering, but the Administrator may not institute a proceeding against an
effective registration statement under this paragraph more than one year
after the date of the order or injunction on which it is based, and the
Administrator may not issue an order under this paragraph on the basis of an
order or injunction issued under the securities act of another state unless
the order or injunction was based on conduct that would constitute, as of
the date of the order, a ground for a stop order under this section;
4. The issuer's enterprise or method of business includes
or would include activities that are unlawful where performed;
5. With respect to a security sought to be registered
under Section 12 of this act [Section 1-303 of this title], there has been a
failure to comply with the undertaking required by paragraph 4 of subsection
B of Section 12 of this act [Section 1-303 of this title];
6. The applicant or registrant has not paid the filing
fee, but the Administrator shall void the order if the deficiency is
corrected; or
7. The offering:
a. will work or tend to work a fraud upon purchasers or
would so operate, or
b. has been or would be made or is being made with
unreasonable amounts of underwriters' and sellers' discounts,
commissions, or other compensation; promoters' profits or participation;
or unreasonable amounts or kinds of options, profits, compensation, or
remuneration paid directly or indirectly to any officer, director,
employee, contractor or agent.
B. To the extent practicable, the Administrator by rule
adopted or order issued under this act shall publish standards that provide
notice of conduct that violates paragraph 7 of subsection A of this section.
C. The Administrator may not institute a stop order
proceeding against an effective registration statement on the basis of
conduct or a transaction known to the Administrator when the registration
statement became effective unless the proceeding is instituted within thirty
(30) days after the registration statement became effective.
D. The Administrator may summarily revoke, deny, postpone,
or suspend the effectiveness of a registration statement pending final
determination of an administrative proceeding. Upon the issuance of the
order, the Administrator shall promptly notify each person specified in
subsection E of this section that the order has been issued, the reasons for
the revocation, denial, postponement, or suspension, and that within fifteen
(15) days after the receipt of a request in a record from the person the
matter will be scheduled for a hearing and such hearing shall be commenced
within fifteen (15) days of the matter being set for hearing. If a hearing
is not requested and none is ordered by the Administrator, within thirty
(30) days after the date of service of the order, the order becomes final.
If a hearing is requested or ordered, the Administrator, after notice of and
opportunity for hearing for each person subject to the order, may modify or
vacate the order or extend the order until final determination.
E. Unless the right to notice and hearing is waived, a stop
order may not be issued under this section without:
1. Appropriate notice to the applicant or registrant, the
issuer, and the person on whose behalf the securities are to be or have been
offered;
2. An opportunity for hearing; and
3. Findings of fact and conclusions of law in a record in
accordance with the Administrative Procedures Act.
F. The Administrator may modify or vacate a stop order
issued under this section if the Administrator finds that the conditions
that caused its issuance have changed or that it is necessary or appropriate
in the public interest or for the protection of investors.
§§ 1-307. Waiver or modification
The Administrator may waive or modify, in whole or in part,
any or all of the requirements of Sections 11, 12, and subsection B of
Section 13 of this act [Sections 1-302, 1-303, and 1-304 of this title] or
the requirement of any information or record in a registration statement or
in a periodic report filed pursuant to subsection I of Section 14 of this
act [Section 1-305 of this title].
§§ 1-308. Investment certificate issuers -- Registration
requirements
A. In addition to all other applicable registration
provisions specified in this act, investment certificate issuers are subject
to the provisions of this section. As used in this section:
1. “Investment certificate” means thrift certificates,
certificates of deposit, savings obligations and similar certificates or
obligations issued and sold by an investment certificate issuer as defined
in paragraph 2 of this subsection; and
2. “Investment certificate issuer” means any financial
institution or person, other than a federally or state chartered bank, bank
holding company, trust company or savings and loan association, or any
credit union, which accepts investor funds or deposits in exchange for the
issuance of investment certificates; provided, however, the term “investment
certificate issuer” shall not include a financial institution or person
which, as of November 1, 1985, issued only the following securities:
a. investment certificates exempt under the provisions
of Sections 6 through 8 of this act [Sections 1-201 through 1-203 of
this title],
b. investment certificates registered by coordination
under Section 12 of this act [Section 1-303 of this title], or
c. any other security as to which the Administrator, by
rule or order, finds that registration is not necessary or appropriate
for the protection of investors.
Nothing contained in this act shall be construed as
precluding an investment certificate issuer from qualifying for and
relying upon any of the exemptions from the provisions of Sections 10
and 32 of this act [Sections 1-301 and 1-504 of this title] as contained
in Sections 6 through 8 of this act [Sections 1-201 through 1-203 of
this title].
B. In addition to other powers conferred by this act, the
Administrator shall have power to require an investment certificate issuer
to:
1. Cause its books and records to be made available at
its offices and to provide to the Department a trial balance within five (5)
days of the commencement of any examination. The books and records shall be
audited at least once each year by an independent certified public
accountant in accordance with generally accepted auditing standards, and the
report thereof, including financial statements prepared in accordance with
generally accepted accounting principles, furnished to the Administrator in
such form as he or she may require;
2. Observe methods and standards, including
classification standards of loans, which the Administrator may prescribe by
rule adopted and promulgated pursuant to the Administrative Procedures Act
for determining the value of various types of assets;
3. Maintain its accounting systems and procedures in
accordance with such regulations as adopted and promulgated by the
Administrator pursuant to the Administrative Procedures Act; provided, the
accounting system required shall have due regard to the size of the
investment certificate issuer;
4. Charge off the whole or any part of an asset, the
value of which, at the time of the Administrator’s action, has deteriorated
for reasons set forth by the Administrator by rule adopted and promulgated
pursuant to the Administrative Procedures Act; and
5. Write down an asset to market value as prescribed by
the Administrator by rule adopted and promulgated pursuant to the
Administrative Procedures Act.
C. Every investment certificate issuer shall obtain from
the Administrator a written acknowledgment, issued in accordance with
procedures adopted and promulgated pursuant to the Administrative Procedures
Act, that the investment certificate issuer engages in the business of
accepting investor funds or deposits in exchange for the issuance of
investment certificates. Any investment certificate issuer who obtains such
an acknowledgment shall be subject to this section and shall possess all the
rights, powers and privileges and shall be subject to all of the duties,
restrictions and limitations contained herein. No company or person who
fails to obtain such acknowledgment within ninety (90) days of the effective
date of the adoption by the Administrator of procedures governing the
issuance of a written acknowledgment shall possess or exercise, unless
expressly given and possessed or exercised under other laws, any of the
benefits, rights, powers or privileges which are herein conferred on
investment certificate issuers. Any company or person who fails to obtain a
written acknowledgment as described herein may not engage in the business of
issuing investment certificates.
D. Any officer, director or employee of an investment
certificate issuer found by the Administrator to be dishonest, reckless,
unfit to participate in the conduct of the affairs of the institution, or
practicing a continuing disregard or violation of laws, rules, regulations
or orders which are likely to cause substantial loss to the company or
likely to seriously weaken the condition of the company shall be removed
immediately from office by the board of directors of the investment
certificate issuer of which he or she is an officer, director or employee,
on the written order of the Administrator; provided, that the investment
certificate issuer or officer, employee, or director may within ten (10)
days file a notice of protest for the removal with the Commission, and as
soon as possible thereafter, the Commission will review the order of the
Administrator and make findings as it deems proper, and that, pending said
time, the officer, employee or director shall not perform any of the duties
of his office.
E. An investment certificate issuer shall not, without the
consent of the Administrator:
1. Make a loan to any of its stockholders owning
twenty-five percent (25%) or more of the stock of the investment certificate
issuer, or its officers or directors;
2. Make a loan to any employee in excess of Ten Thousand
Dollars ($10,000.00); or
3. Make a loan to or other investment in or purchase any
asset from any company in which any of its officers, directors or
stockholders may have any direct or indirect interest, unless made in an
arm’s length transaction.
F. An investment certificate issuer shall not, without the
consent of the Administrator:
1. Lend money in excess of ten percent (10%) of its
shareholders’ equity to any person, association, partnership or corporation
liable for such obligations; provided, however, that this limitation does
not apply to the purchase of investment securities; or
2. Engage in, or acquire any interest in, any business
prohibited to a bank chartered under the laws of this state.
G. The shareholders’ equity of an investment certificate
issuer shall not be less than ten percent (10%) of the investment
certificates outstanding. Provided, an investment certificate issuer
lawfully incorporated and operating in this state on or before November 1,
1985, with less than the above specified shareholders’ equity shall, at the
beginning of each fiscal year thereafter, increase its shareholders’ equity
by a minimum of one-fourth (1/4) the difference between its shareholders’
equity on November 1, 1985, and the above specified amount until such time
as its shareholders’ equity equals or exceeds the amount specified above.
For purposes of computing the shareholders’ equity, the reserve against bad
debts shall be included.
H. Every investment certificate issuer shall maintain a
reserve against bad debts in an amount required by the Administrator by rule
adopted and promulgated pursuant to the Administrative Procedures Act, but
in no event shall the reserve against bad debts be less than two percent
(2%) of total loans outstanding.
I. If the Administrator finds the capital of an investment
certificate issuer to be impaired according to the standard set forth in
subsection G of this section, the Administrator may:
1. Give notice of the impairment to the directors and
shareholders of the investment certificate issuer and levy an assessment in
a designated amount upon the holders of record of the investment certificate
issuer’s stock to remedy an impairment of capital. Upon receipt of an order
to levy an assessment, the directors shall cause to be sent to all holders
of stock, at their addresses as listed on the books of the investment
certificate issuer, a notice of the amount of the assessment and a copy of
this subsection. If an assessment is not paid within ninety (90) days after
the order is mailed, the Administrator, at his or her discretion, may offer
the shares of the defaulting stockholders for sale at public auction at a
price which shall not be less than the amount of the assessment and the cost
of the sale; or
2. Apply to the district court of any county where the
assets of the investment certificate issuer are located for an order
appointing a conservator of, and directing him to rehabilitate, the
investment certificate issuer. If all reasonable efforts to rehabilitate the
investment certificate issuer fail, the Administrator may apply to the court
for an order directing the appointment of a liquidator to dissolve any such
issuer and liquidate its assets. All rights and interests of the
stockholders in the stock, property and assets of such investment
certificate issuer are thereby terminated except the rights of stockholders
to the proceeds of liquidation, if any, after all other valid claims,
including interest, against the assets of the investment certificate issuer
and the proceeds of liquidation have been satisfied. The conservator or
liquidator appointed under this subsection shall meet qualifications
established by the Administrator by rule adopted and promulgated pursuant to
the Administrative Procedures Act.
J. Whenever the capital or reserve of any investment
certificate issuer shall be impaired according to the standards set forth in
subsections G and H of this section, the investment certificate issuer shall
make no new loans, renew any investment certificates or sell new investment
certificates without the consent of the Administrator.
K. 1. It shall be unlawful
for any investment certificate issuer to issue investment certificates when
insolvent.
2. Every officer, director, principal stockholder, or
every other person who materially participates or aids in the issuance of an
investment certificate in violation of this subsection, or who directly or
indirectly controls any such person, shall be jointly and severally liable,
unless the officer, director, principal stockholder, or any other person who
so participates, aids or controls, sustains the burden of proof that the
person did not know, and could not have known, of the existence of the facts
by reason of which liability is alleged to exist. There shall be
contribution as in cases of contract among the persons so liable.
3. The rights and remedies provided for in this
subsection are in addition to any other rights or remedies provided for in
Title 71 of the Oklahoma Statutes, or that may exist at law or in equity.
L. The Administrator may as often as he or she deems it
prudent and necessary for the protection of the public, make or cause to be
made examinations of the books, records, papers, assets and liabilities of
every kind and character owned by, or relating to, every investment
certificate issuer.
M. Every investment certificate issuer shall make and file
with the Administrator reports at such times and in such form as the
Administrator may prescribe by rule or order. The reports shall be verified
by the oath of either the president, the vice-president, or the secretary
and attested by the signature of two or more of the directors. Each report
shall exhibit in detail, as may be required by the Administrator, the
resources and liabilities of the investment certificate issuer at the close
of business on the day to be specified by the Administrator.
N. Every investment certificate issuer whose investor funds
or deposits are not insured by an agency of the government shall disclose on
the face of each investment certificate in ten-point type the following:
“This certificate is not insured by the Federal Deposit
Insurance Corporation or any other agency of the government.”
ARTICLE 4
BROKER-DEALERS, AGENTS, INVESTMENT ADVISERS, INVESTMENT
ADVISER REPRESENTATIVES, AND FEDERAL COVERED INVESTMENT ADVISERS
§§ 1-401. Broker-dealer registration requirement and
exemptions
A. It is unlawful for a person to transact business in this
state as a broker-dealer, unless the person is registered under this act as
a broker-dealer or is exempt from registration as a broker-dealer under
subsection B or D of this section.
B. The following persons are exempt from the registration
requirement of subsection A of this section:
1. A broker-dealer without a place of business in this
state if its only transactions effected in this state are with:
a. the issuer of the securities involved in the
transactions,
b. a broker-dealer registered under this act or a
broker-dealer not required to be registered as a broker-dealer under
this act,
c. an institutional investor,
d. a nonaffiliated federal covered investment adviser
with investments under management in excess of One Hundred Million
Dollars ($100,000,000.00) acting for the account of others pursuant to
discretionary authority in a signed record,
e. a bona fide preexisting customer whose principal
place of residence is not in this state and the person is registered as
a broker-dealer under the Securities Exchange Act of 1934 or not
required to be registered under the Securities Exchange Act of 1934 and
is registered under the securities act of the state in which the
customer maintains a principal place of residence,
f. a bona fide preexisting customer whose principal
place of residence is in this state but was not present in this state
when the customer relationship was established, if:
(1) the broker-dealer is registered under the
Securities Exchange Act of 1934 or the broker-dealer is not required to
be registered under the Securities Exchange Act of 1934 and is
registered under the securities laws of the state in which the customer
relationship was established and where the customer had maintained a
principal place of residence, and
(2) within forty-five (45) days after the customer’s
first transaction in this state, the person files an application for
registration as a broker-dealer in this state and a further transaction
is not effected more than seventy-five (75) days after the date on which
the application is filed, or, if earlier, the date on which the
Administrator notifies the person that the Administrator has denied the
application for registration or has stayed the pendency of the
application for cause, and
g. not more than three customers in this state during
the previous twelve (12) months, in addition to those specified in
subparagraphs a through f of this paragraph, if the broker-dealer is
registered under the Securities Exchange Act of 1934 or not required to
be registered under the Securities Exchange Act of 1934 and is
registered under the securities act of the state in which the
broker-dealer has its principal place of business.
2. A person that deals solely in United States government
securities and is supervised as a dealer in government securities by the
Board of Governors of the Federal Reserve System, the Comptroller of the
Currency, the Federal Deposit Insurance Corporation, or the Office of Thrift
Supervision; and
3. Any other person exempted by rule or order under this
act.
C. It is unlawful for a broker-dealer, or for an issuer
engaged in offering, offering to purchase, purchasing, or selling securities
in this state, directly or indirectly, to employ or associate with an
individual to engage in an activity related to securities transactions in
this state if the registration of the individual is suspended or revoked
under this act; or the individual is barred from employment or association
with a broker-dealer, an issuer, an investment adviser or a federal covered
investment adviser by an order of the securities regulator of a state, the
Securities and Exchange Commission, or a self-regulatory organization. A
broker-dealer or issuer does not violate this subsection if the
broker-dealer or issuer did not know, and in the exercise of reasonable care
could not have known, of the suspension, revocation, or bar. Upon request
from a broker-dealer or issuer and for good cause shown, an order under this
act may modify or waive the prohibitions of this subsection.
D. A rule adopted or order issued under this act may
permit:
1. A broker-dealer that is registered in Canada or other
foreign jurisdiction and that does not have a place of business in this
state to effect transactions in securities with or for, or attempt to effect
the purchase or sale of any securities by:
a. an individual from Canada or other foreign
jurisdiction that is temporarily present in this state and with whom the
broker-dealer had a bona fide customer relationship before the
individual entered the United States,
b. an individual from Canada or other foreign
jurisdiction who is present in this state and whose transactions are in
a self-directed tax advantaged retirement plan of which the individual
is the holder or contributor in that foreign jurisdiction, or
c. an individual who is resident in this state, with
whom the broker-dealer customer relationship arose while the individual
was temporarily or permanently resident in Canada or the other foreign
jurisdiction; and
2. An agent who represents a broker-dealer, that is
exempt under this subsection to effect transactions in securities or attempt
to effect the purchase or sale of any securities in this state as permitted
for a broker-dealer described in paragraph 1 of this subsection.
§§ 1-402. Agent
registration requirement and exemptions
A. It is unlawful for an individual to transact business in
this state as an agent unless the individual is registered under this act as
an agent or is exempt from registration as an agent under subsection B of
this section.
B. The following individuals are exempt from the
registration requirement of subsection A of this section:
1. An individual who represents a broker-dealer in
effecting transactions in this state limited to those described in Section
15(h)(2) of the Securities Exchange Act of 1934 (15 U.S.C. Section
78o(h)(2));
2. An individual who represents a broker-dealer that is
exempt under subsection B or D of Section 18 of this act [Section 1-401 of
this title];
3. An individual who represents an issuer with respect to
an offer or sale of the issuer’s own securities or those of the issuer’s
parent or any of the issuer’s subsidiaries to existing employees, partners,
members or directors of the issuer or the issuer’s parent or any of the
issuer’s subsidiaries, and who is not compensated in connection with the
individual’s participation by the payment of commissions or other
remuneration based, directly or indirectly, on transactions in those
securities;
4. An individual who represents an issuer and who effects
transactions in the issuer’s securities exempted by Section 7 of this act
[Section 1-202 of this title], other than paragraphs 11 and 14 of Section 7
of this act [Section 1-202 of this title];
5. An individual who represents an issuer who effects
transactions solely in federal covered securities of the issuer, but an
individual who effects transactions in a federal covered security under
Section 18(b)(3) or 18(b)(4)(D) [currently renumbered 18(b)(4)(F)] of the
Securities Act of 1933 (15 U.S.C. Section 77r(b)(3) or
77r(b)(4)(D)[currently renumbered 15 U.S.C. Section 77r(b)(4)(F)]) is not
exempt if the individual is compensated in connection with the agent’s
participation by the payment of commissions or other remuneration based,
directly or indirectly, on transactions in those securities;
6. An individual who represents a broker-dealer
registered in this state under subsection A of Section 18 of this act
[Section 1-401 of this title] or exempt under subsection B of Section 18 of
this act [Section 1-401 of this title] in the offer and sale of securities
for an account of a nonaffiliated federal covered investment adviser with
investments under management in excess of One Hundred Million Dollars
($100,000,000.00) acting for the account of others pursuant to discretionary
authority in a signed record;
7. An individual who represents an issuer in connection
with the purchase of the issuer’s own securities;
8. An individual who represents an issuer and who
restricts participation to performing ministerial or clerical work; or
9. Any other individual exempted by rule adopted or order
issued under this act.
C. The registration of an agent is effective only while the
agent is employed by or associated with a broker-dealer registered under
this act or an issuer that is offering, selling or purchasing its securities
in this state.
D. It is unlawful for a broker-dealer, or an issuer engaged
in offering, selling, or purchasing securities in this state, to employ or
associate with an agent who transacts business in this state on behalf of
broker-dealers or issuers unless the agent is registered under subsection A
of this section or exempt from registration under subsection B of this
section.
E. Unless prohibited by rule adopted or order issued under
this act, an individual may act as an agent for more than one broker-dealer
or more than one issuer at a time.
F. It is unlawful for an individual acting as an agent,
directly or indirectly, to conduct business in this state on behalf of a
broker-dealer or issuer if the registration of the individual as an agent is
suspended or revoked under this act; or the individual is barred from
employment or association with a broker-dealer by an order under this act,
the Securities and Exchange Commission, or a self-regulatory organization;
or the individual is subject to an order of a court of competent
jurisdiction temporarily, preliminarily or permanently enjoining such
individual from conducting business in this state on behalf of a
broker-dealer or issuer.
§§ 1-403. Investment adviser registration requirement and
exemptions
A. It is unlawful for a person to transact business in this
state as an investment adviser unless the person is registered under this
act as an investment adviser or is exempt from registration as an investment
adviser under subsection B of this section.
B. The following persons are exempt from the registration
requirement of subsection A of this section:
1. A federal covered investment adviser;
2. A person without a place of business in this state
that is registered under the securities act of the state in which that
person has its principal place of business if its only clients in this state
are:
a. federal covered investment advisers, investment
advisers registered under this act, or broker-dealers registered under
this act,
b. institutional investors,
c. bona fide preexisting clients whose principal places
of residence are not in this state if the investment adviser is
registered under the securities act of the state in which the clients
maintain principal places of residence, or
d. any other client exempted by rule adopted or order
issued under this act;
3. A person without a place of business in this state if
the person has had, during the preceding twelve (12) months, not more than
five clients that are residents of this state in addition to those specified
under paragraph 2 of this subsection; or
4. Any other person exempted by rule adopted or order
issued under this act.
C. It is unlawful for an investment adviser, directly or
indirectly, to employ or associate with an individual to engage in an
activity related to investment advice in this state if the registration of
the individual is suspended or revoked under this act, or the individual is
barred from employment or association with an investment adviser, federal
covered investment adviser, or broker-dealer by an order under this act, the
Securities and Exchange Commission, or a self-regulatory organization,
unless the investment adviser did not know, and in the exercise of
reasonable care could not have known, of the suspension, revocation, or bar.
Upon request from the investment adviser and for good cause, the
Administrator, by order, may waive, in whole or in part, the application of
the prohibitions of this subsection to the investment adviser.
D. It is unlawful for an investment adviser to employ or
associate with an individual required to be registered under this act as an
investment adviser representative who transacts business in this state on
behalf of the investment adviser unless the individual is registered under
subsection A of Section 21 of this act [Section 1-404 of this title] or is
exempt from registration under subsection B of Section 21 of this act
[Section 1-404 of this title].
E. The exemption from registration provided by subparagraph
b of paragraph 2 of subsection B of this section shall not be available to
any person who acts as an investment adviser to the state, any county,
municipality or school district of this state, or any other political
subdivision of this state; any agency or corporate or other instrumentality
of any such entity; or any pension fund for the benefit of employees of any
such entity.
§§ 1-404. Investment adviser representative registration
requirement and exemptions
A. It is unlawful for an individual to transact business in
this state as an investment adviser representative unless the individual is
registered under this act as an investment adviser representative or is
exempt from registration as an investment adviser representative under
subsection B of this section.
B. The following individuals are exempt from the
registration requirement of subsection A of this section:
1. An individual who is employed by or associated with an
investment adviser that is exempt from registration under subsection B of
Section 20 of this act [Section 1-403 of this title] unless the individual
has a place of business in this state or is not a “supervised person” as
that term is defined in Section 202(a)(25) of the Investment Advisers Act of
1940 (15 U.S.C. Section 80b-2(a)(25)); and
2. Any other individual exempted by rule adopted or order
issued under this act.
C. The registration of an investment adviser representative
is not effective while the investment adviser representative is not employed
by or associated with an investment adviser registered under this act or a
federal covered investment adviser that has made or is required to make a
notice filing under Section 22 of this act [Section 1-405 of this title].
D. An individual may transact business as an investment
adviser representative for more than one investment adviser or federal
covered investment adviser at a time unless a rule adopted or order issued
under this act prohibits or limits an individual from acting as an
investment adviser representative for more than one investment adviser or
federal covered investment adviser.
E. It is unlawful for an individual acting as an investment
adviser representative, directly or indirectly, to conduct business in this
state on behalf of an investment adviser or a federal covered investment
adviser if the registration of the individual as an investment adviser
representative is suspended or revoked; or the individual is barred from
employment or association with an investment adviser or a federal covered
investment adviser by an order under this act, the Securities and Exchange
Commission, or a self-regulatory organization; or the individual is subject
to an order of a court of competent jurisdiction temporarily, preliminarily
or permanently enjoining such individual from conducting business in this
state on behalf of an investment adviser or a federal covered investment
adviser. Upon request from a federal covered investment adviser and for good
cause, the Administrator, by order issued, may waive, in whole or in part,
the application of the requirements of this subsection to the federal
covered investment adviser.
F. An investment adviser registered under this act, a
federal covered investment adviser that has filed a notice under Section 22
of this act [Section 1-405 of this title], or a broker-dealer registered
under this act is not required to employ or associate with an individual as
an investment adviser representative for the referral of investment advisory
clients so long as any compensation paid by such persons for such referral
is paid to an investment adviser registered under this act, a federal
covered investment adviser who has filed a notice under Section 22 of this
act [Section 1-405 of this title], or a broker-dealer registered under this
act with which the individual is employed or associated as an investment
adviser representative.
§§ 1-405. Federal covered investment adviser notice filing
A. Except with respect to a federal covered investment
adviser described in subsection B of this section, it is unlawful for a
federal covered investment adviser to transact business in this state as a
federal covered investment adviser unless the federal covered investment
adviser complies with subsection C of this section.
B. The following federal covered investment advisers are
not required to comply with subsection C of this section:
1. A federal covered investment adviser without a place
of business in this state if its only clients in this state are:
a. federal covered investment advisers, investment
advisers registered under this act, and broker-dealers registered under
this act,
b. institutional investors,
c. bona fide preexisting clients whose principal places
of residence are not in this state, or
d. other clients specified by rule adopted or order
issued under this act;
2. A federal covered investment adviser without a place
of business in this state if the person has had, during the preceding twelve
(12) months, not more than five clients that are residents in this state in
addition to those specified under paragraph 1 of this subsection; and
3. Any other person excluded by rule adopted or order
issued under this act.
C. A person acting as a federal covered investment adviser,
not excluded under subsection B of this section, shall file a notice
containing a consent to service of process complying with Section 49 of this
act [Section 1-611 of this title], such records as have been filed with the
Securities and Exchange Commission under the Investment Advisers Act of 1940
required by rule or order under this act, and the fee specified in Section
50 of this act [Section 1-612 of this title].
D. The notice under subsection C of this section becomes
effective upon its filing and expires at midnight on December 31 each year.
§§ 1-406. Registration application -- Time of becoming
effective
A. A person shall register as a broker-dealer, agent,
investment adviser, or investment adviser representative by filing an
application that contains:
1. The information required for the filing of a uniform
application, a consent to service of process complying with Section 49 of
this act [Section 1-611 of this title], the fee specified in Section 50 of
this act [Section 1-612 of this title] and any reasonable fees charged by
the designee of the Administrator for processing the filing; and
2. Upon request by the Administrator, any other financial
or other information that the Administrator determines is appropriate.
B. If the information contained in an application that is
filed under subsection A of this section is or becomes inaccurate or
incomplete in any material respect, the registrant shall promptly file a
correcting amendment.
C. If an order is not in effect and a proceeding is not
pending under Section 28 of this act [Section 1-411 of this title],
registration becomes effective at noon on the 45th day after a completed
application is filed unless the registration is denied. A rule adopted or
order issued under this act may set an earlier effective date or may defer
the effective date until noon on the 45th day after the filing of any
amendment completing the application.
D. A registration is effective until midnight on December
31 of the year for which the application for registration is filed. Unless
an order is in effect under Section 28 of this act [Section 1-411 of this
title], a registration may be automatically renewed each year by filing such
records as are required by rule adopted or order issued under this act, by
paying the fee specified in Section 50 of this act [Section 1-612 of this
title], and by paying costs charged by the designee of the Administrator for
processing the filings.
E. A rule adopted or order issued under this act may impose
such other conditions not inconsistent with the National Securities Markets
Improvement Act of 1996. An order issued under this act may waive, in whole
or in part, specific requirements in connection with registration as are in
the public interest and for the protection of investors.
§§ 1-407. Succession and change in registration of
broker-dealer or investment adviser
A. A broker-dealer or investment adviser may succeed to the
current registration of another broker-dealer or investment adviser or a
notice filing of a federal covered investment adviser, and a federal covered
investment adviser may succeed to the current registration of an investment
adviser or notice filing of another federal covered investment adviser, by
filing as a successor an application for registration pursuant to Section 18
or 20 of this act [Section 1-401 or 1-403 of this title], or a notice
pursuant to Section 22 of this act [Section 1-405 of this title], for the
unexpired portion of the current registration or notice filing.
B. A broker-dealer or investment adviser that changes its
form of organization or state of incorporation or organization may continue
its registration by filing an amendment to its registration if the change
does not involve a material change in its financial condition or management.
The amendment becomes effective when filed or upon a date designated by the
registrant in its filing. The new organization is a successor to the
original registrant for the purposes of this act. If there is a material
change in financial condition or management, the broker-dealer or investment
adviser shall file a new application for registration. Any predecessor
registered under this act shall stop conducting its securities business
other than winding down transactions and shall file for withdrawal of
broker-dealer or investment adviser registration within forty-five (45) days
after filing its amendment to effect succession.
C. A broker-dealer or investment adviser that changes its
name may continue its registration by filing an amendment to its
registration. The amendment becomes effective when filed or upon a date
designated by the registrant.
D. A change of control of a broker-dealer or investment
adviser may be made in accordance with a rule adopted or order issued under
this act.
§§ 1-408. Termination of employment or association of agent
and investment adviser representative -- Transfer of employment or association
A. If an agent registered under this act terminates
employment by or association with a broker-dealer or issuer, or if an
investment adviser representative registered under this act terminates
employment by or association with an investment adviser or federal covered
investment adviser, or if either registrant terminates activities that
require registration as an agent or investment adviser representative, the
broker-dealer, issuer, investment adviser, or federal covered investment
adviser shall promptly file a notice of termination. If the registrant
learns that the broker-dealer, issuer, investment adviser, or federal
covered investment adviser has not filed the notice, the registrant may do
so.
B. If an agent registered under this act terminates
employment by or association with a broker-dealer registered under this act
and begins employment by or association with another broker-dealer
registered under this act; or if an investment adviser representative
registered under this act terminates employment by or association with an
investment adviser registered under this act; or a federal covered
investment adviser that has filed a notice under Section 22 of this act
[Section 1-405 of this title], and begins employment by or association with
another investment adviser registered under this act or a federal covered
investment adviser that has filed a notice under Section 22 of this act
[Section 1-405 of this title]; then upon the filing by or on behalf of the
registrant, within thirty (30) days after the termination, of an application
for registration that complies with the requirement of subsection A of
Section 23 of this act [Section 1-406 of this title], and payment of the
filing fee required under Section 50 of this act [Section 1-612 of this
title], the registration of the agent or investment adviser representative,
is:
1. Immediately effective as of the date of the completed
filing if the agent’s Central Registration Depository record or successor
record or the investment adviser representative’s Investment Adviser
Registration Depository record or successor record does not contain a new or
amended disciplinary disclosure within the previous twelve (12) months; or
2. Temporarily effective as of the date of the completed
filing, if the agent’s Central Registration Depository record or successor
record or the investment adviser representative’s Investment Adviser
Registration Depository record or successor record contains a new or amended
disciplinary disclosure within the preceding twelve (12) months.
C. The Administrator may withdraw the temporary
registration if there are or were grounds for discipline under Section 28 of
this act [Section 1-411 of this title] and the Administrator does so within
thirty (30) days after the filing of the application. If the Administrator
does not withdraw the temporary registration within the 30-day period,
registration becomes automatically effective on the 31st day after filing.
D. The Administrator may prevent the effectiveness of a
transfer of an agent or investment adviser representative under paragraph 1
or 2 of subsection B of this section based on the public interest and the
protection of investors.
E. If the Administrator determines that a registrant or
applicant for registration is no longer in existence or has ceased to act as
a broker-dealer, agent, investment adviser, or investment adviser
representative, or is the subject of an adjudication of incapacity or is
subject to the control of a committee, conservator, or guardian, or cannot
reasonably be located, a rule adopted or order issued under this act may
require the registration be canceled or terminated or the application
denied. The Administrator may reinstate a canceled or terminated
registration, with or without hearing, and may make the registration
retroactive.
§§ 1-409. Withdrawal of registration of broker-dealer,
agent, investment adviser, and investment adviser representative
Withdrawal of registration by a broker-dealer, agent,
investment adviser, or investment adviser representative becomes effective
sixty (60) days after the filing of the application to withdraw or within
any shorter period as provided by rule adopted or order issued under this
act unless a revocation or suspension proceeding is pending when the
application is filed. If a proceeding is pending, withdrawal becomes
effective when and upon such conditions as required by rule adopted or order
issued under this act. The Administrator may institute a revocation or
suspension proceeding under Section 28 of this act [Section 1-411 of this
title] within one year after the withdrawal became effective automatically
and issue a revocation or suspension order as of the last date on which
registration was effective if a proceeding is not pending when the
application is filed.
§§ 1-410. Postregistration requirements
A. Subject to Section 15(h) of the Securities Exchange Act
of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers
Act of 1940 (15 U.S.C. Section 80b-18a), a rule adopted or order issued
under this act may establish minimum financial requirements for
broker-dealers registered or required to be registered under this act and
investment advisers registered or required to be registered under this act.
B. Subject to Section 15(h) of the Securities Exchange Act
of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers
Act of 1940 (15 U.S.C. Section 80b-18a), a broker-dealer registered or
required to be registered under this act and an investment adviser
registered or required to be registered under this act shall file such
financial reports as are required by a rule adopted or order issued under
this act. If the information contained in a record filed under this
subsection is or becomes inaccurate or incomplete in a material respect, the
registrant shall promptly file a correcting amendment.
C. Subject to Section 15(h) of the Securities Exchange Act
of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers
Act of 1940 (15 U.S.C. Section 80b-18a):
1. A broker-dealer registered or required to be
registered under this act and an investment adviser registered or required
to be registered under this act shall make and maintain the accounts,
correspondence, memoranda, papers, books, and other records as required by
rule adopted or order issued under this act;
2. Broker-dealer records required to be maintained under
paragraph 1 of this subsection may be maintained in any form of data storage
acceptable under Section 17(a) of the Securities Exchange Act of 1934 (15
U.S.C. Section 78q(a)) if they are readily accessible to the Administrator;
and
3. Investment adviser records required to be maintained
under paragraph 1 of this subsection may be maintained in any form of data
storage required by rule adopted or order issued under this act.
D. The records of a broker-dealer registered or required to
be registered under this act and an investment adviser registered or
required to be registered under this act are subject to such reasonable
periodic, special, or other audits or inspections by a representative of the
Administrator, within or without this state, as the Administrator considers
necessary or appropriate in the public interest and for the protection of
investors. An audit or inspection may be made at any time and without prior
notice. The Administrator may copy, and remove for audit or inspection
copies of, all records the Administrator reasonably considers necessary or
appropriate to conduct the audit or inspection. The Administrator may assess
a reasonable charge for conducting an audit or inspection under this
subsection.
E. Subject to Section 15(h) of the Securities Exchange Act
of 1934 (15 U.S.C. Section 78o(h)) or Section 222 of the Investment Advisers
Act of 1940 (15 U.S.C. Section 80b-18a), an agent may not have custody of
funds or securities of a customer except under the supervision of a
broker-dealer and an investment adviser representative may not have custody
of funds or securities of a client except under the supervision of an
investment adviser or federal covered investment adviser. A rule adopted or
order issued under this act may prohibit, limit, or impose conditions on a
broker-dealer regarding custody of funds or securities of a customer and on
an investment adviser regarding custody of securities or funds of a client.
F. With respect to an investment adviser registered or
required to be registered under this act, a rule adopted or order issued
under this act may require that information be furnished or disseminated to
clients or prospective clients in this state as necessary or appropriate in
the public interest and for the protection of investors and advisory
clients.
G. A rule adopted or order issued under this act may
require any individual registered under Section 19 or 21 of this act
[Section 1-402 or 1-404 of this title] to participate in a continuing
education program which is approved by the Securities and Exchange
Commission and administered by a self-regulatory organization or, in the
absence of such a program, a rule adopted or order issued under this act may
require continuing education for an individual registered under Section 21
of this act [Section 1-404 of this title].
§§ 1-411. Denial, revocation, suspension, withdrawal,
restriction, condition, or limitation of registration
A. If the Administrator finds that the order is in the
public interest and subsection D of this section authorizes the action, an
order issued under this act may deny an application, or may condition or
limit registration:
1. Of an applicant to be a broker-dealer, agent,
investment adviser, or investment adviser representative; and
2. If the applicant is a broker-dealer or investment
adviser, any partner, officer, or director, any person having a similar
status or performing similar functions, or any person directly or indirectly
controlling the broker-dealer or investment adviser.
B. If the Administrator finds that the order issued is in
the public interest and subsection D of this section authorizes the action
an order issued under this act may revoke, suspend, condition, or limit the
registration of a registrant and if the registrant is a broker-dealer or
investment adviser, any partner, officer, or director, any person having a
similar status or performing similar functions, or any person directly or
indirectly controlling the broker-dealer or investment adviser. However, the
Administrator:
1. May not institute a revocation or suspension
proceeding under this subsection based on an order issued by another state
that is reported to the Administrator or designee later than one year after
the date of the order on which it is based; and
2. Under subparagraphs a and b of paragraph 5 of
subsection D of this section may not issue an order on the basis of an order
under the state securities act of another state unless the other order was
based on conduct for which subsection D of this section would authorize the
action had the conduct occurred in this state.
C. If the Administrator finds that the order is in the
public interest and paragraphs 1 through 6, 8, 9, 10, 12 or 13 of subsection
D of this section authorizes the action, an order under this act may
censure, impose a bar, impose a civil penalty in an amount not to exceed a
maximum of Five Thousand Dollars ($5,000.00) for a single violation or Two
Hundred Fifty Thousand Dollars ($250,000.00) for multiple violations on a
registrant, and/or recover the costs of the investigation from a registrant
and if the registrant is a broker-dealer or investment adviser, from any
partner, officer, or director, any person having a similar function or any
person directly or indirectly controlling the broker-dealer or investment
adviser.
D. A person may be disciplined under subsections A through
C of this section if the person:
1. Has filed an application for registration in this
state under this act or the predecessor act within the previous ten (10)
years, which, as of the effective date of registration or as of any date
after filing in the case of an order denying effectiveness, was incomplete
in any material respect or contained a statement that, in light of the
circumstances under which it was made, was false or misleading with respect
to a material fact;
2. Has willfully violated or willfully failed to comply
with this act or the predecessor act or a rule adopted or order issued under
this act or the predecessor act within the previous ten (10) years;
3. Has been convicted of any felony or within the
previous ten (10) years has been convicted of a misdemeanor involving a
security, a commodity futures or option contract, or an aspect of a business
involving securities, commodities, investments, franchises, insurance,
banking, or finance;
4. Is enjoined or restrained by a court of competent
jurisdiction in an action instituted by the Administrator under this act or
a predecessor act, a state, the Securities and Exchange Commission, or the
United States from engaging in or continuing an act, practice, or course of
business involving an aspect of a business involving securities,
commodities, investments, franchises, insurance, banking, or finance;
5. Is the subject of an order, issued after notice and
opportunity for hearing by:
a. the securities, depository institution, insurance or
other financial services regulator of a state, or by the Securities and
Exchange Commission or other federal agency denying, revoking, barring,
or suspending registration as a broker-dealer, agent, investment
adviser, federal covered investment adviser, or investment adviser
representative,
b. the securities regulator of a state or by the
Securities and Exchange Commission against a broker-dealer, agent,
investment adviser, investment adviser representative, or federal
covered investment adviser,
c. the Securities and Exchange Commission or by a
self-regulatory organization suspending, barring, canceling or expelling
the registrant from membership in a self-regulatory organization,
d. a court adjudicating a United States Postal Service
fraud,
e. the insurance regulator of a state denying,
suspending, or revoking the registration of an insurance agent, or
f. a depository institution regulator suspending or
barring a person from the banking or depository institution business;
6. Is the subject of an adjudication or determination,
after notice and opportunity for hearing, by the Securities and Exchange
Commission, the Commodity Futures Trading Commission, the Federal Trade
Commission, a federal depository institution regulator, or a depository
institution, insurance, or other financial services regulator of a state
that the person 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, or the Commodity Exchange Act, the
securities or commodities law of a state, or a federal or state law under
which a business involving investments, franchises, insurance, banking, or
finance is regulated;
7. Is insolvent, either because the person’s liabilities
exceed the person’s assets or because the person cannot meet the person’s
obligations as they mature, but the Administrator may not enter an order
against an applicant or registrant under this paragraph without a finding of
insolvency as to the applicant or registrant;
8. Refuses to allow or otherwise impedes the
Administrator from conducting an audit or inspection under subsection D of
Section 27 of this act [Section 1-410 of this title] or refuses access to
any registrant’s office to conduct an audit or inspection under subsection D
of Section 27 of this act [Section 1-410 of this title];
9. Has failed to reasonably supervise an agent,
investment adviser representative, or other individual, if the agent,
investment adviser representative, or other individual was subject to the
person’s supervision and committed a violation of this act or the
predecessor act or a rule adopted or order issued under this act or the
predecessor act within the previous ten (10) years;
10. Has not paid the proper filing fee within thirty (30)
days after having been notified by the Administrator of a deficiency, but
the Administrator shall vacate an order under this paragraph when the
deficiency is corrected;
11. After notice and opportunity for a hearing, has been
found within the previous ten (10) years:
a. by a court of competent jurisdiction to have
willfully violated the laws of a foreign jurisdiction under which the
business of securities, commodities, investment, franchises, insurance,
banking or finance is regulated,
b. to have been the subject of an order of a securities
regulator of a foreign jurisdiction denying, revoking, or suspending the
right to engage in the business of securities as a broker-dealer, agent,
investment adviser, investment adviser representative or similar person,
or
c. to have been suspended or expelled from membership
by or participation in a securities exchange or securities association
operating under the securities laws of a foreign jurisdiction;
12. Is the subject of a cease and desist order issued by
the Securities and Exchange Commission or issued under the securities,
commodities, investment, franchise, banking, finance or insurance laws of a
state;
13. Has engaged in dishonest or unethical practices in
the securities, commodities, investment, franchise, banking, finance or
insurance business within the previous ten (10) years; or
14. Is not qualified on the basis of factors such as
training, experience, and knowledge of the securities business. However, in
the case of an application by an agent for a broker-dealer that is a member
of a self-regulatory organization or by an individual for registration as an
investment adviser representative, a denial order may not be based on this
paragraph if the individual has successfully completed all examinations
required by subsection E of this section. The Administrator may require an
applicant for registration under Section 19 or 21 of this act [Section 1-402
or 1-404 of this title] who has not been registered in a state within the
two (2) years preceding the filing of an application in this state to
successfully complete an examination.
E. A rule adopted or order issued under this act may
require that an examination, including an examination developed or approved
by an organization of securities regulators, be successfully completed by a
class of individuals or all individuals. An order issued under this act may
waive, in whole or in part, an examination as to an individual and a rule
adopted under this act may waive, in whole or in part, an examination as to
a class of individuals if the Administrator determines that the examination
is not necessary or appropriate in the public interest and for the
protection of investors.
F. The Administrator may summarily postpone an application
or summarily suspend a registration before final determination of an
administrative proceeding. Upon the issuance of the order, the Administrator
shall promptly notify each person subject to the order that the order has
been issued, the reasons for the action, and that within fifteen (15) days
after the receipt of a request in a record from the person the matter will
be scheduled for a hearing and such hearing shall be commenced within
fifteen (15) days of the matter being set for hearing. If a hearing is not
requested and none is ordered by the Administrator, within thirty (30) days
after the date of service of the order, the order becomes final by operation
of law. If a hearing is requested or ordered, the Administrator, after
notice of and opportunity for hearing to each person subject to the order,
may modify or vacate the order or extend the order until final
determination.
G. An order may not be issued under this section, except
under subsection F of this section, without:
1. Appropriate notice to the applicant or registrant;
2. Opportunity for hearing; and
3. Findings of fact and conclusions of law in a record in
accordance with the Administrative Procedures Act. If the person to whom the
notice is addressed does not request a hearing within fifteen (15) days
after the service of notice is effective, a final order as provided in
subsection A, B or C of this section may be issued.
H. A person who controls, directly or indirectly, a person
not in compliance with this section may be disciplined by order of the
Administrator under subsections A through C of this section to the same
extent as the noncomplying person, unless the controlling person did not
know, and in the exercise of reasonable care could not have known, of the
existence of conduct that is the basis for discipline under this section.
I. The Administrator may not institute a proceeding under
subsection A, B or C of this section based solely on material facts actually
known by the Administrator unless an investigation or the proceeding is
instituted within one year after the Administrator actually knew the
material facts.
ARTICLE 5
FRAUD AND LIABILITIES
§§ 1-501. General fraud
It is unlawful for a person, in connection with the offer,
sale, or purchase of a security, directly or indirectly:
1. To employ a device, scheme, or artifice to defraud;
2. To make an untrue statement of a material fact or to
omit to state a material fact necessary in order to make the statement made,
in the light of the circumstances under which it is made, not misleading; or
3. To engage in an act, practice, or course of business
that operates or would operate as a fraud or deceit upon another person.
§§ 1-502. Prohibited conduct in providing investment advice
A. It is unlawful for a person that advises others, for
compensation, either directly or indirectly, or through publications or
writings, as to the value of securities or the advisability of investing in,
purchasing or selling securities, or that, for compensation and as part of a
regular business, issues or promulgates analyses or reports concerning
securities:
1. To employ a device, scheme, or artifice to defraud
another person;
2. To make an untrue statement of a material fact or to
omit to state a material fact necessary in order to make the statement made,
in the light of the circumstances under which it is made, not misleading; or
3. To engage in an act, practice, or course of business
that operates or would operate as a fraud or deceit upon another person.
B. 1. A rule adopted
under this act may define an act, practice, or course of business of an
investment adviser or an investment adviser representative as fraudulent,
deceptive or manipulative, and prescribe means reasonably designed to
prevent investment advisers and investment adviser representatives from
engaging in acts, practices, and courses of business defined as fraudulent,
deceptive, or manipulative.
2. A rule adopted or order issued under this act may
specify the contents of an investment advisory contract entered into,
extended, or renewed by an investment adviser.
§§ 1-503. Evidentiary burden
A. In a civil action or administrative proceeding under
this act, a person claiming an exemption, exception, preemption, or
exclusion has the burden to prove the applicability of the exemption,
exception, preemption, or exclusion.
B. In a criminal proceeding under this act, a person
claiming an exemption, exception, preemption, or exclusion has the burden of
going forward with evidence of the claim.
§§ 1-504. Filing of sales and advertising literature
A. Except as otherwise provided in subsection B of this
section, it is unlawful for a person to distribute a prospectus, pamphlet,
circular, form letter, advertisement, sales literature, or other advertising
communication relating to a security or investment advice, addressed or
intended for distribution to prospective investors, including clients or
prospective clients of a person registered or required to be registered as
an investment adviser under this act, unless the sales and advertising
literature is first filed with the Department with the fee specified in
Section 50 of this act [Section 1-612 of this title] and the Department has
responded indicating that the Administrator has no objection to its
distribution or use.
B. This section does not apply to sales and advertising
literature specified in subsection A of this section relating to a federal
covered security, a federal covered investment adviser, or a security or
transaction exempted by Section 6, 7, or 8 of this act [Section 1-201,
1-202, or 1-203 of this title] except as may be required pursuant to
paragraph 7 of Section 6 of this act [Section 1-201 of this title].
§§ 1-505. Misleading filings
It is unlawful for a person to make or cause to be made, in
a record that is used in an action or proceeding or filed under this act, a
statement that, at the time and in the light of the circumstances under
which it is made, is false or misleading in a material respect, or, in
connection with the statement, to omit to state a material fact necessary in
order to make the statement made, in the light of the circumstances under
which it was made, not false or misleading.
§§ 1-506. Misrepresentations concerning registration or
exemption
The filing of an application for registration, a
registration statement, or a notice filing under this act, or the
registration of a person or security under this act, does not constitute a
finding by the Administrator that a record filed under this act is true,
complete, and not misleading. The filing or registration or the availability
of an exemption, exception, preemption, or exclusion for a security or a
transaction does not mean that the Administrator has passed upon the merits
or qualifications of, or recommended or given approval to, a person,
security, or transaction. It is unlawful to make, or cause to be made, to a
purchaser, customer, client, or prospective customer or client, a
representation inconsistent with this section.
§§ 1-507. Qualified immunity
A broker-dealer, agent, investment adviser, federal covered
investment adviser, or investment adviser representative is not liable to
another broker-dealer, agent, investment adviser, federal covered investment
adviser, or investment adviser representative for defamation relating to an
alleged untrue statement that is contained in a record required by the
Administrator, or designee of the Administrator, the Securities and Exchange
Commission, or a self-regulatory organization, unless it is proven that the
person knew, or should have known at the time that the statement was made,
that it was false in a material respect or the person acted in reckless
disregard of the statement’s truth or falsity.
§§ 1-508. Violations -- Criminal penalties --
Administrative fines
A. A person who willfully violates this act, or a rule
adopted or order issued under this act, except Section 32 of this act
[Section 1-504 of this title] or the notice filing requirements of Section
11 or 22 of this act [Section 1-302 or 1-405 of this title], or that
willfully violates Section 33 of this act [Section 1-505 of this title]
knowing the statement made to be false or misleading in a material respect,
upon conviction, shall be fined not more than One Hundred Thousand Dollars
($100,000.00) or imprisoned not more than ten (10) years, or both such fine
and imprisonment. An individual convicted of violating a rule adopted or
order issued under this act may be fined, but may not be imprisoned, if the
individual did not have knowledge of the rule or order.
B. This act does not limit the power of this state to
punish a person for conduct that constitutes a crime under other laws of
this state.
C. On a criminal matter referred by the Administrator, the
prosecuting attorney may designate and appoint one or more lawyers of the
Department as special assistants as available for the purpose of assisting
in or conducting a criminal prosecution arising by reason of an
investigation or proceeding under this section.
§§ 1-509. Civil liabilities
A. Enforcement of civil liability under this section is
subject to the Securities Litigation Uniform Standards Act of 1998.
B. A person is liable to a purchaser if the person sells a
security in violation of Section 10 of this act [Section 1-301 of this
title], or by means of an untrue statement of a material fact or an omission
to state a material fact necessary in order to make the statement made, in
light of the circumstances under which it is made, not misleading, the
purchaser not knowing the untruth or omission, and the seller not sustaining
the burden of proof that the seller did not know and, in the exercise of
reasonable care, could not have known of the untruth or omission. An action
under this subsection is governed by the following:
1. The purchaser may maintain an action at law or in
equity to recover the consideration paid for the security, and interest at
the legal rate of interest per year from the date of the purchase, less the
amount of any income received on the security, plus costs, and reasonable
attorneys’ fees determined by the court, upon the tender of the security, or
for actual damages as provided in paragraph 3 of this subsection.
2. The tender referred to in paragraph 1 of this
subsection may be made any time before entry of judgment. Tender requires
only notice in a record of ownership of the security and willingness to
exchange the security for the amount specified. A purchaser that no longer
owns the security may recover actual damages as provided in paragraph 3 of
this subsection.
3. Actual damages in an action arising under this
subsection are the amount that would be recoverable upon a tender, less the
value of the security when the purchaser disposed of it, and interest at the
legal rate of interest per year from the date of purchase, costs, and
reasonable attorneys’ fees determined by the court.
C. A person is liable to the seller if the person buys a
security by means of an untrue statement of a material fact or omission to
state a material fact necessary in order to make the statement made, in
light of the circumstances under which it is made, not misleading, the
seller not knowing of the untruth or omission, and the purchaser not
sustaining the burden of proof that the purchaser did not know, and in the
exercise of reasonable care, could not have known of the untruth or
omission. An action under this subsection is governed by the following:
1. The seller may maintain an action at law or in equity
to recover the security, and any income received on the security, costs, and
reasonable attorney’s fees determined by the court, upon the tender of the
purchase price, or for actual damages as provided in paragraph 3 of this
subsection.
2. The tender referred to in paragraph 1 of this
subsection may be made any time before entry of judgment. Tender requires
only notice in a record of the present ability to pay the amount tendered
and willingness to take delivery of the security for the amount specified.
If the purchaser no longer owns the security, the seller may recover actual
damages as provided in paragraph 3 of this subsection.
3. Actual damages in an action arising under this
subsection are the difference between the price at which the security was
sold and the value the security would have had at the time of the sale in
the absence of the purchaser’s conduct causing liability, and interest at
the legal rate of interest per year from the date of the sale of the
security, costs, and reasonable attorneys’ fees determined by the court.
D. A person acting as a broker-dealer or agent that sells
or buys a security in violation of subsection A of Section 18, subsection A
of Section 19, or Section 34 of this act [Section 1-401, 1-402, or 1-506 of
this title] is liable to the customer. The customer, if a purchaser, may
maintain an action at law or in equity for recovery of actual damages as
specified in paragraphs 1 through 3 of subsection B of this section; or, if
a seller, a remedy as specified in paragraphs 1 through 3 of subsection C of
this section.
E. A person acting as an investment adviser or investment
adviser representative that provides investment advice for compensation in
violation of subsection A of Section 20, subsection A of Section 21, or
Section 34 of this act [Section 1-403, 1-404, or 1-506 of this title] is
liable to the client. The client may maintain an action at law or in equity
to recover the consideration paid for the advice, interest at the legal rate
of interest per year from the date of payment, costs, and reasonable
attorney’s fees determined by the court.
F. A person that receives directly or indirectly any
consideration for providing investment advice to another person and that
employs a device, scheme, or artifice to defraud the other person or engages
in an act, practice, or course of business that operates or would operate as
a fraud or deceit on the other person, is liable to the other person. An
action under this subsection is governed by the following:
1. The person defrauded may maintain an action to recover
the consideration paid for the advice and the amount of any actual damages
caused by the fraudulent conduct, interest at the legal rate of interest per
year from the date of the fraudulent conduct, costs, and reasonable
attorney’s fees determined by the court, less the amount of any income
received as a result of the fraudulent conduct.
2. This subsection does not apply to a broker-dealer or
its agents, if the investment advice is solely incidental to the conduct of
business as a broker-dealer and no special compensation is received for the
investment advice.
G. The following persons are liable jointly and severally
with and to the same extent as persons liable under subsections B through F
of this section:
1. A person that directly or indirectly controls a person
liable under subsections B through F of this section, unless the controlling
person sustains the burden of proof that the person did not know, and in the
exercise of reasonable care could not have known, of the existence of the
conduct by reason of which the liability is alleged to exist;
2. An individual who is a managing partner, executive
officer, or director of a person liable under subsections B through F of
this section, including an individual having a similar status or performing
similar functions, unless the individual sustains the burden of proof that
the individual did not know and, in the exercise of reasonable care could
not have known, of the existence of the conduct by reason of which the
liability is alleged to exist;
3. An individual who is an employee of or associated with
a person liable under subsections B through F of this section and who
materially aids the conduct giving rise to the liability, unless the
individual sustains the burden of proof that the individual did not know
and, in the exercise of reasonable care could not have known, of the
existence of the conduct by reason of which the liability is alleged to
exist;
4. A person that is a broker-dealer, agent, investment
adviser, or investment adviser representative that materially aids the
conduct giving rise to the liability under subsections B through F of this
section, unless the person sustains the burden of proof that the person did
not know and, in the exercise of reasonable care could not have known, of
the existence of the conduct by reason of which liability is alleged to
exist; and
5. Any other person who materially aids in the conduct
giving rise to the liability under subsections B through F of this section,
unless the person sustains the burden or proof that the person did not know
and, in the exercise of reasonable care could not have known, of the
existence of the conduct by reason of which liability is alleged to exist.
H. A person liable under this section has a right of
contribution as in cases of contract against any other person liable under
this section for the same conduct.
I. A cause of action under this section survives the death
of an individual who might have been a plaintiff or defendant.
J. A person may not obtain relief:
1. Under subsection B of this section for violation of
Section 10 of this act [Section 1-301 of this title], or under subsection D
or E of this section, unless the action is commenced within one year after
the violation occurred; or
2. Under subsection B of this section, other than for
violation of Section 10 of this act [Section 1-301 of this title], or under
subsection C or F of this section, unless the action is instituted within
the earlier of two (2) years after discovery of the facts constituting the
violation or five (5) years after such violation.
K. A person that has made, or has engaged in the
performance of, a contract in violation of this act or a rule adopted or
order issued under this act, or that has acquired a purported right under
the contract with knowledge of conduct by reason of which its making or
performance was in violation of this act, may not base an action on the
contract.
L. A condition, stipulation, or provision binding a person
purchasing or selling a security or receiving investment advice to waive
compliance with this act or a rule adopted or order issued under this act is
void.
M. The rights and remedies provided by this act are in
addition to any other rights or remedies that may exist, but this act does
not create a cause of action not specified in this section.
§§ 1-510. Rescission offers
A purchaser, seller, or recipient of investment advice may
not maintain an action under Section 37 of this act [Section 1-509 of this
title] if:
1. The purchaser, seller, or recipient of investment advice
receives in a record, before the action is instituted:
a. an offer stating the respect in which liability under
Section 37 of this act [Section 1-509 of this title] may have arisen and
fairly advising the purchaser, seller, or recipient of investment advice of
that person’s rights in connection with the offer, and any financial or
other information necessary to correct all material misstatements or
omissions in the information that was required by this act to be furnished
to that person at the time of the purchase, sale, or investment advice,
b. if the basis for relief under this section may have
been a violation of subsection B of Section 37 of this act [Section 1-509 of
this title], an offer to repurchase the security for cash, payable on
delivery of the security, equal to the consideration paid, and interest at
the legal rate of interest per year from the date of purchase, less the
amount of any income received on the security, or, if the purchaser no
longer owns the security, an offer to pay the purchaser upon acceptance of
the offer damages in an amount that would be recoverable upon a tender, less
the value of the security when the purchaser disposed of it, and interest at
the legal rate of interest per year from the date of purchase in cash equal
to the damages computed in the manner provided in this subsection,
c. if the basis for relief under this section may have
been a violation of subsection C of Section 37 of this act [Section 1-509 of
this title], an offer to tender the security, on payment by the seller of an
amount equal to the purchase price paid, less income received on the
security by the purchaser, and interest at the legal rate of interest from
the date of the sale, or if the purchaser no longer owns the security, an
offer to pay the seller upon acceptance of the offer, in cash, damages in
the amount of the difference between the price at which the security was
purchased and the value the security would have had at the time of the
purchase in the absence of the purchaser’s conduct that may have caused
liability and interest at the legal rate of interest per year from the date
of the sale,
d. if the basis for relief under this section may have
been a violation of subsection D of Section 37 of this act [Section 1-509 of
this title], and if the customer is a purchaser, an offer to pay as
specified in subparagraph b of this paragraph; or, if the customer is a
seller, an offer to tender or to pay as specified in subparagraph c of this
paragraph,
e. if the basis for relief under this section may have
been a violation of subsection E of Section 37 of this act [Section 1-509 of
this title], an offer to reimburse in cash the consideration paid for the
advice and interest at the legal rate of interest per year from the date of
payment, or
f. if the basis for relief under this section may have
been a violation of subsection F of Section 37 of this act [Section 1-509 of
this title], an offer to reimburse in cash the consideration paid for the
advice, the amount of any actual damages that may have been caused by the
conduct, and interest at the legal rate of interest per year from the date
of the violation causing the loss;
2. An offer under paragraph 1 of this subsection states
that it must be accepted by the purchaser, seller, or recipient of
investment advice within thirty (30) days after the date of its receipt by
the purchaser, seller, or recipient of investment advice, or any shorter
period, of not less than three (3) days, that the Administrator, by order,
specifies;
3. The offeror has the present ability to pay the amount
offered or to tender the security under paragraph 1 of this subsection;
4. The offer under paragraph 1 of this subsection is
delivered to the purchaser, seller, or recipient of investment advice, or
sent in a manner that ensures receipt by the purchaser, seller, or recipient
of investment advice; and
5. The purchaser, seller, or recipient of investment advice
that accepts the offer under paragraph 1 of this subsection, in a record
within the period specified under paragraph 2 of this subsection is paid in
accordance with the terms of the offer.
ARTICLE 6
ADMINISTRATION AND JUDICIAL REVIEW
§§ 1-601. Administration
A. The Administrator shall administer the Oklahoma Uniform
Securities Act of 2004.
B. There are hereby created the Oklahoma Securities
Commission and the Department of Securities. The Commission shall be the policy
making and governing authority of the Department, shall appoint the
Administrator and shall be responsible for the enforcement of the Oklahoma
Uniform Securities Act of 2004.
C. 1. The Commission shall consist of four (4)
members to be appointed by the Governor by and with the advice and consent
of the Senate. One member will be a member of the Oklahoma Bar Association
appointed from a list of five nominees submitted by the Oklahoma Bar
Association; one member shall be an active officer of a bank or trust
company operating in the State of Oklahoma appointed from a list of five
nominees submitted by the Oklahoma Bankers Association; and one member shall
be a certified public accountant appointed from a list of five nominees
submitted by the Oklahoma Society of Certified Public Accountants; and one
member shall be engaged in the securities industry and shall be appointed
for a six-year initial term from a list of five nominees submitted by the
Oklahoma Securities Industry Association; provided, that the State Banking
Commissioner shall be and is hereby made an ex officio voting member of the
Commission.
2. Except for appointment of the member engaged in the
securities industry as provided for in subsection C of this section, no person
may be appointed to or by the Commission while such person is registered as a
broker-dealer, agent, investment adviser, or investment adviser representative
under the Oklahoma Uniform Securities Act of 2004, or while he or she is an
officer, director, or partner of any person so registered, or while he or she is
an officer, director, or partner of an issuer which has a registration statement
effective under the Oklahoma Uniform Securities Act of 2004, or while he or she
is occupying a similar status or performing similar functions.
3. It is unlawful for any member of the Commission, the
Administrator, or any other officer or employee of the Department to use for
personal benefit any information which is filed with or obtained by the
Administrator and which is not made public. No provision of the Oklahoma Uniform
Securities Act of 2004 authorizes any member of the Commission, the
Administrator or any other officer or employee of the Department to disclose any
such information except among themselves or when necessary or appropriate in a
proceeding or investigation under the Oklahoma Uniform Securities Act of 2004 or
in connection with a proceeding or investigation conducted by any state, federal
or foreign law enforcement agency, securities agency or self-regulatory
organization. No provision of the Oklahoma Uniform Securities Act of 2004 either
creates or derogates from any privilege which exists at common law or otherwise
when documentary or other evidence is sought under a subpoena directed to any
member of the Commission, the Administrator or any other officer or employee of
the Department.
4. Except on proof of corruption, no Commissioner shall for
his or her acts or failure to act be civilly liable to any investor, applicant
for registration, or any other person.
D. The Governor shall biennially appoint Commission members
to serve for a staggered term of six (6) years. Upon the expiration of initial
terms, the term of each member shall be six (6) years from the date of his or
her appointment and qualification, and until his or her successor shall qualify.
Vacancies shall be filled by the Governor for the unexpired term. Members shall
be eligible for reappointment.
E. The Commission shall select a chair and is hereby
authorized to adopt rules for conducting its proceedings. Any three members
shall constitute a quorum for transacting Commission business. The Commission
shall meet bimonthly on such date as it may designate and may meet at such other
times as it may deem necessary, or when called by the chair or by any two
members. Complete minutes of each meeting shall be kept and filed in the
Department and shall be available for public inspection during reasonable office
hours. The Commission shall report annually to the Governor, to the Speaker of
the House of Representatives and to the President Pro Tempore of the Senate. The
report shall contain the minutes of each meeting held during the year,
legislative recommendations, a summary of violations of the Oklahoma Uniform
Securities Act of 2004 and action taken thereon, a list of securities registered
under the Oklahoma Uniform Securities Act of 2004 and such other data and
information as may be deemed necessary or appropriate. The Commission is hereby
authorized to publish such report, and the Administrator may sell copies of such
report at such price as is reasonably sufficient to defray the expenses of the
Department in preparing, publishing, and disseminating the same. Each member of
the Commission shall have unrestricted access to all offices and records under
the jurisdiction of the Department. The Commission, or a majority thereof, may
exercise any power or perform any act authorized for the Administrator under the
provisions of the Oklahoma Uniform Securities Act of 2004.
F. The Commission shall appoint a full-time Administrator,
who shall serve at the pleasure of the Commission. The Administrator shall
administer the Oklahoma Uniform Securities Act of 2004 under the supervision of
the Commission and in accordance with its policies.
G. The Administrator shall be a person of good moral
character, at least thirty (30) years of age, a resident taxpayer of Oklahoma,
and thoroughly familiar with corporate organization, investment banking,
investment trusts, the sale of securities, and the statistical details of the
manufacturing industries and commerce of this state. In addition, the
Administrator shall:
1. Be a graduate of an accredited law school and a member of
the Oklahoma Bar Association, or shall have had ten (10) years' experience as a
certified public accountant; and
2. Have at least three (3) years' work experience involving
some aspect of the securities industry. The Commission may also require
additional qualifications. The salary of the Administrator shall be fixed by the
Commission.
H. The Administrator, with the approval of the Commission,
may designate a Deputy Securities Administrator, who shall possess the same
qualifications, including bond, required for the Administrator and who shall
perform all the duties required to be performed by the Administrator when the
Administrator is absent or unable to act for any reason.
I. Before assuming office, the Administrator shall give a
bond in the sum of Fifty Thousand Dollars ($50,000.00) payable to the State of
Oklahoma, to be approved by the Attorney General of the State of Oklahoma,
conditioned that he or she will faithfully execute the duties of the office. The
Administrator may by rule or order require any employee of the Department to be
bonded on the same condition and in the same or such lesser amount as he or she
determines. The expense of all such bonds shall be paid from funds available to
the Department.
J. 1. The internal
administrative organization of the Department shall be determined by the
Commission in such manner as to promote the efficient and effective enforcement
of the Oklahoma Uniform Securities Act of 2004. The Department shall include,
but not be limited to, divisions relating to:
a. registration of broker-dealers, agents, investment
advisers, and investment adviser representatives,
b. registration of securities,
c. investigation and enforcement, and
d. investor education.
2. Within the division of investor education, the Department
may provide the following services at the discretion of the Administrator:
a. informing investors of all rights and remedies available
under the Oklahoma Uniform Securities Act of 2004,
b. informing investors of the availability of private dispute
resolution, including arbitration and mediation, as an alternative to other
courses of action,
c. acting as a liaison between investors and the other
divisions of the Department, and
d. acting as a liaison between investors and issuers of
securities, broker-dealers or investment advisers subject to the jurisdiction of
the Department under this act.
Nothing in this subsection shall authorize any employee of
the Department to represent the interests of, or to serve as counsel for,
investors in any proceeding or action to include an administrative or civil
proceeding brought by the Department or the Securities and Exchange Commission,
a proceeding brought by the National Association of Securities Dealers, Inc., or
an arbitration or mediation proceeding. Further, no employee of the Department
may advise any person about the value of securities or as to the advisability of
investing in, purchasing or selling securities, or as to the value or merits of
pursuing a particular course of action.
3. Employees of the division of investor education shall not
be exempt from the provisions of the Open Records Act and Section 1-607 of this
title.
K. The Administrator shall prepare in writing a manual of
necessary employee positions for the Department, including job classifications,
personnel qualifications, duties, maximum and minimum salary schedules, and
other personnel information, which shall be approved by the Commission. The
Administrator may select, appoint, and employ such accountants, auditors,
examiners, clerks, stenographers, and other personnel as he or she deems
necessary for the proper administration of the Oklahoma Uniform Securities Act
of 2004, and may fix their compensation and the salary of the Deputy
Administrator. The Deputy Administrator and other employees of the Department
shall serve at the pleasure of the Administrator.
L. The Commission and the Securities Department shall be
assigned offices in Oklahoma City, Oklahoma, by the Office of Management and
Enterprise Services, and all records of the Commission and Department shall be
kept in those offices, unless and until transferred to the Records Management
Division of the Oklahoma Department of Libraries.
M. The Department of Securities’ attorney, paralegal, legal
secretary, accountant, investigator, examiner, chief financial officer, network
administrator, business manager, and investor education coordinator positions
shall be in the unclassified service and are in no way subject to any of the
provisions of the Merit System of Personnel Administration or of the rules
promulgated by the Office of Management and Enterprise Services except those
relating to leave regulations.
N. 1. Neither the
Administrator nor any employee of the Department, during their respective terms
of employment, shall serve as a director, officer, shareholder, member, partner,
agent or employee of any person who, during the period of such Administrator's
or employee's employment with the Department:
a. was licensed or applied for registration as a
broker-dealer, agent, investment adviser or investment adviser
representative under this act, or
b. applied for or secured the registration of securities under the Oklahoma
Uniform Securities Act of 2004.
2. Nothing in paragraph 1 of this subsection shall
prohibit the holding, purchasing or selling of any securities by the
Administrator or any employee of the Department in accordance with
regulations adopted by the Commission for the purpose of protecting the
public interest and avoiding conflicts of interest.
3. Nothing contained in paragraph 1 of this subsection
shall prohibit the holding, purchasing or selling of any securities of any
issuer described in subparagraph b of paragraph 1 of this subsection of this
section by the Administrator if either:
a. the Administrator together with his or her spouse,
or minor children, owns less than one percent (1%) of any class of
outstanding securities of any such issuer so long as such securities are
not purchased in an initial public offering, or b.
such securities are held or purchased through a management account or
trust administered by a bank or trust company authorized to do business
in this state that has sole investment discretion regarding the holding,
purchasing or selling of such securities and the Administrator or
employee did not, directly or indirectly, advise, counsel or command the
holding, purchasing or selling of any securities or furnish any
information relating to any such securities to such bank or trust
company and further, such account or trust does not at any time have
more than ten percent (10%) of its total assets invested in the
securities of any one issuer or hold more than five percent (5%) of the
outstanding securities of any class of securities of any one issuer.
O. The Oklahoma Uniform Securities Act of 2004 does not
create or diminish a privilege or exemption that exists at common law, by
statute or rule, or otherwise. P. The Administrator
may develop and implement investor education initiatives to inform the public
about investing in securities, with particular emphasis on the prevention and
detection of securities fraud. In developing and implementing these initiatives,
the Administrator may collaborate with public and nonprofit organizations with
an interest in investor education. The Administrator may accept a grant or
donation from a person that is not affiliated with the securities industry or
from a nonprofit organization, regardless of whether the organization is
affiliated with the securities industry, to develop and implement investor
education initiatives. This subsection does not authorize the Administrator to
require participation or monetary contributions of a registrant in an investor
education program.
§§ 1-602. Investigations and subpoenas
A. The Administrator may:
1. Conduct public or private investigations within or
outside of this state which the Administrator considers necessary or
appropriate to determine whether a person has violated, is violating, or is
about to violate this act or a rule adopted or order issued under this act,
or to aid in the enforcement of this act or in the adoption of rules and
forms under this act; 2. Require or permit a person to
testify, file a statement, or produce a record, under oath or otherwise as
the Administrator determines, as to all the facts and circumstances
concerning a matter to be investigated or about which an action or
proceeding is to be instituted; and 3. Publish a
record concerning an action, proceeding, or an investigation under, or a
violation of, this act or a rule adopted or order issued under this act if
the Administrator determines it is necessary or appropriate in the public
interest and for the protection of investors.
B. For the purpose of an investigation or proceeding under
this act, the Administrator or its designated officer may administer oaths and
affirmations, subpoena witnesses, seek compulsion of attendance, take evidence,
require the filing of statements, and require the production of any records that
the Administrator considers relevant or material to the investigation or
proceeding.
C. If a person does not appear or refuses to testify, file a statement,
produce records, or otherwise does not obey a subpoena as required by the
Administrator under this act, the Administrator may apply to the district court
of Oklahoma County or the district court in any other county where service can
be obtained or a court of another state to enforce compliance. The court may:
1. Hold the person in contempt; 2.
Order the person to appear before the Administrator or an officer designated
by the Administrator; 3. Order the person to testify
about the matter under investigation or in question;
4. Order the production of records;
5. Grant injunctive relief, including restricting or
prohibiting the offer or sale of securities or the providing of investment
advice; 6. Impose a civil penalty up to a maximum of
Five Thousand Dollars ($5,000.00) for a single violation or Two Hundred
Fifty Thousand Dollars ($250,000.00) for multiple violations in a single
proceeding or a series of related proceedings; and 7.
Grant any other necessary or appropriate relief.
D. This section does not preclude a person from applying to
the district court of Oklahoma County or a court of another state for relief
from a request to appear, testify, file a statement, produce records, or obey a
subpoena.
E. An individual is not excused from attending, testifying,
filing a statement, producing a record or other evidence, or obeying a subpoena
of the Administrator or a designated officer under this act or in an action or
proceeding instituted by the Administrator under this act on the ground that the
required testimony, statement, record, or other evidence, directly or
indirectly, may tend to incriminate the individual or subject the individual to
a criminal fine, penalty, or forfeiture. If the individual refuses to testify,
file a statement, or produce a record or other evidence on the basis of the
individual's privilege against self-incrimination, the Administrator may apply
to the district court of Oklahoma County to compel the testimony, the filing of
the statement, the production of the record, or the giving of other evidence.
The testimony, record, or other evidence compelled under such an order may not
be used, directly or indirectly, against the individual in a criminal case,
except in a prosecution for perjury or contempt or otherwise failing to comply
with the order. F. At the request of a law enforcement or
another governmental or regulatory agency or a self-regulatory organization, the
Administrator may provide assistance if the requesting entity states that it is
conducting an investigation to determine whether a person has violated, is
violating, or is about to violate a law or rule of the other state or foreign
jurisdiction relating to securities matters that the requesting entity
administers or enforces. The Administrator may provide the assistance by using
the authority to investigate and the powers conferred by this section as the
Administrator determines is necessary or appropriate. The assistance may be
provided without regard to whether the conduct described in the request would
also constitute a violation of this act or other law of this state if occurring
in this state. In deciding whether to provide the assistance, the Administrator
may consider whether the requesting entity is permitted and has agreed to
provide assistance reciprocally within its state, federal or foreign
jurisdiction to the Administrator on securities matters when requested; whether
compliance with the request would violate or prejudice the public policy of this
state; and the availability of resources and employees of the Administrator to
carry out the request for assistance.
§§ 1-603. Civil enforcement
A. If the Administrator believes that a person has engaged,
is engaging, or is about to engage in an act, practice, or course of
business constituting a violation of this act or a rule adopted or order
issued under this act or constituting a dishonest or unethical practice or
that a person has, is, or is about to engage in an act, practice, or course
of business that materially aids a violation of this act or a rule adopted
or order issued under this act or a dishonest or unethical practice, the
Administrator may, prior to, concurrently with, or subsequent to an
administrative proceeding, maintain an action in the district court of
Oklahoma County or the district court of any other county where service can
be obtained to enjoin the act, practice, or course of business and to
enforce compliance with this act or a rule adopted or order issued under
this act. B. In an action under this section and on a
proper showing, the court may:
1. Issue a permanent or temporary injunction, restraining
order, or declaratory judgment; 2. Order other
appropriate or ancillary relief, which may include:
a. an asset freeze, accounting, writ of attachment,
writ of general or specific execution, and appointment of a receiver or
conservator, that may be the Administrator, for the defendant or the
defendant's assets,
b. ordering the Administrator to take charge and
control of a defendant's property, including investment accounts and
accounts in a depository institution, rents, and profits; to collect
debts; and to acquire and dispose of property, c.
imposing a civil penalty up to a maximum of Five Thousand Dollars
($5,000.00) for a single violation or up to Two Hundred Fifty Thousand
Dollars ($250,000.00) for more than one violation; an order of
rescission, restitution, or disgorgement directed to a person that has
engaged in an act, practice, or course of business constituting a
violation of this act or the predecessor act or a rule adopted or order
issued under this act or the predecessor act, and
d. ordering the payment of prejudgment and
postjudgment interest; or
3. Order such other relief as the court considers
appropriate.
C. The Administrator may not be required to post a bond in
an action or proceeding under this act.
§§ 1-604. Administrative enforcement
A. If the Administrator determines that a person has
engaged, is engaging, or is about to engage in an act, practice, or course
of business constituting a violation of this act or a rule adopted or order
issued under this act or constituting a dishonest or unethical practice or
that a person has materially aided, is materially aiding, or is about to
materially aid an act, practice, or course of business constituting a
violation of this act or a rule adopted or order issued under this act or
constituting a dishonest or unethical practice, the Administrator may:
1. Issue an order directing the person to cease and
desist from engaging in the act, practice, or course of business or to take
other action necessary or appropriate to comply with this act;
2. Issue an order denying, suspending, revoking, or conditioning the
exemptions for a broker-dealer under subparagraph d or f of paragraph 1 of
subsection B of Section 18 of this act [Section 1-401 of this title] or an
investment adviser under subparagraph c of paragraph 2 of subsection B of
Section 20 of this act [Section 1-403 of this title]; or
3. Issue an order under Section 9 of this act [Section 1-204 of this title].
B. An order under subsection A of this section is effective
on the date of issuance. Upon issuance of the order, the Administrator shall
promptly serve each person subject to the order with a copy of the order and
a notice that the order has been entered. The order must include a statement
whether the Administrator will seek a civil penalty or costs of the
investigation, a statement of the reasons for the order, and notice that,
within fifteen (15) days after receipt of a request in a record from the
person, the matter will be scheduled for a hearing and the hearing shall be
commenced within fifteen (15) days of the matter being set for hearing. If a
person subject to the order does not request a hearing and none is ordered
by the Administrator, within thirty (30) days after the date of service of
the order, the order, that may include a civil penalty or costs of the
investigation if a civil penalty or costs were sought in the statement
accompanying the order, becomes final as to that person by operation of law.
If a hearing is requested or ordered, the Administrator, after notice of and
opportunity for hearing to each person subject to the order, may modify or
vacate the order or extend it until final determination.
C. If a hearing is requested or ordered pursuant to
subsection B of this section, a hearing must be held pursuant to the
Administrative Procedures Act. A final order may not be issued unless the
Administrator makes findings of fact and conclusions of law in a record in
accordance with the Administrative Procedures Act. The final order may make
final, vacate, or modify the order issued under subsection A of this
section. D. In a final order under subsection C of
this section, the Administrator may impose a civil penalty up to a maximum
of Five Thousand Dollars ($5,000.00) for a single violation or up to Two
Hundred Fifty Thousand Dollars ($250,000.00) for multiple violations in a
single proceeding or a series of related proceedings.
E. In a final order, the Administrator may charge the
actual cost of an investigation or proceeding for a violation of this act or
a rule adopted or order issued under this act. F. If a
petition for judicial review of a final order is not filed in accordance
with Section 47 of this act [Section 1-609 of this title], the Administrator
may file a certified copy of the final order with the clerk of a court of
competent jurisdiction. The order so filed has the same effect as a judgment
of the court and may be recorded, enforced, or satisfied in the same manner
as a judgment of the court. G. If a person does not
comply with an order under this section, the Administrator may petition a
court of competent jurisdiction to enforce the order. The court may not
require the Administrator to post a bond in an action or proceeding under
this section. If the court finds, after service and opportunity for hearing,
that the person was not in compliance with the order, the court may adjudge
the person in civil contempt of the order. The court may impose a further
civil penalty against the person for contempt in an amount not to exceed One
Thousand Dollars ($1,000.00) for each violation and may grant any other
relief the court determines is just and proper in the circumstances.
§§ 1-605. Rules, forms, orders, interpretative opinions,
and hearings
A. The Administrator may:
1. Issue forms and orders and, after notice and comment,
may adopt and amend rules necessary or appropriate to carry out this act and
may repeal rules, including rules and forms governing registration
statements, applications, notice filings, reports, and other records;
2. By rule, define terms, whether or not used in this act, but those
definitions may not be inconsistent with this act; and
3. By rule, classify securities, persons, and transactions and adopt
different requirements for different classes.
B. Under this act, a rule or form may not be adopted or
amended, or an order issued or amended, unless the Administrator finds that
the rule, form, order, or amendment is necessary or appropriate in the
public interest or for the protection of investors and is consistent with
the purposes intended by this act. In adopting, amending, and repealing
rules and forms, Section 46 of this act [Section 1-608 of this title]
applies in order to achieve uniformity among the states and coordination
with federal laws in the form and content of registration statements,
applications, reports, and other records, including the adoption of uniform
rules, forms, and procedures. C. Subject to Section
15(h) of the Securities Exchange Act and Section 222 of the Investment
Advisers Act of 1940, the Administrator may require that a financial
statement filed under this act be prepared in accordance with generally
accepted accounting principles in the United States and comply with other
requirements specified by rule adopted or order issued under this act. A
rule adopted or order issued under this act may establish:
1. Subject to Section 15(h) of the Securities Exchange
Act and Section 222 of the Investment Advisors Act of 1940, the form and
content of financial statements required under this act;
2. Whether unconsolidated financial statements must be filed; and
3. Whether required financial statements must be audited
by an independent certified public accountant.
D. The Administrator may provide interpretative opinions or
issue determinations that the Administrator will not institute a proceeding
or an action under this act against a specified person for engaging in a
specified act, practice, or course of business if the determination is
consistent with this act. The charge for interpretative opinions or
determinations that the Administrator will not institute an action or a
proceeding under this act shall be specified in Section 50 of this act
[Section 1-612 of this title]. E. A penalty under this
act may not be imposed for, and liability does not arise from, conduct that
is engaged in or omitted in good faith believing it conforms to a rule,
form, or order of the Administrator under this act.
F. A hearing in an administrative proceeding under this
act shall be conducted in public.
§§ 1-606. Administrative files and opinions
A. The Administrator shall maintain, or designate a person
to maintain, a register of applications for registration of securities;
registration statements; notice filings; applications for registration of
broker-dealers, agents, investment advisers, and investment adviser
representatives; notice filings by federal covered investment advisers that
are or have been effective under this act or the predecessor act; notices of
claims of exemption from registration or notice filing requirements
contained in a record; orders issued under this act or the predecessor act;
and interpretative opinions or no action determinations issued under this
act. B. The Administrator shall make all rules, forms,
interpretative opinions, and orders available to the public.
C. The Administrator shall furnish a copy of a record that is a public
record or a certification that the public record does not exist to a person
who so requests. The charge for furnishing the record or certification shall
be specified in Section 50 of this act [Section 1-612 of this title]. A copy
of the record certified or a certificate by the Administrator of a record's
nonexistence is prima facie evidence of a record or its nonexistence.
§§ 1-607. Public records -- Confidentiality
A. Except as otherwise provided in subsection B of this
section, records obtained by the Administrator or filed under this act,
including a record contained in or filed with a registration statement,
application, notice filing, or report, are public records and are available
for public examination.
B. The following records are not public records and are
not available for public examination under subsection A of this section:
1. A record obtained by the Administrator or created by a
representative of the Administrator in connection with an audit or
inspection under subsection K of Section 14 or subsection D of Section 27 of
this act [Section 1-305 or 1-410 of this title] or an investigation under
Section 40 of this act [Section 1-602 of this title];
2. A part of a record filed in connection with a registration statement
under Sections 10 and 12 through 14 of this act [Sections 1-301 and 1-303
through 1-305 of this title] or a record obtained under subsection K of
Section 14 or subsection D of Section 27 of this act [Section 1-305 or 1-410
of this title] that contains trade secrets or confidential information if
the person filing the registration statement or providing the record has
asserted a claim of confidentiality or privilege that is authorized by law;
3. A record that is not required to be provided to the Administrator or
filed under this act and is provided to the Administrator only on the
condition that the record will not be subject to public examination or
disclosure;
4. A record in a litigation file;
5. A nonpublic record received from a person specified in subsection A of
Section 46 of this act [Section 1-608 of this title];
6. A record obtained by the Administrator through a designee of the
Administrator that a rule or order under this act determines has been:
a. expunged from the Administrator’s records by the
designee, or
b. determined to be nonpublic or nondisclosable by
that designee if the Administrator finds the determination to be in the
public interest and necessary for the protection of investors; and
7. Any social security number, residential address unless
used as a business address, and residential telephone number contained in a
record that is filed.
C. If disclosure is for the purpose of a civil or
administrative investigation, action, or proceeding brought by the
Administrator or a criminal referral made by the Administrator or to a
person specified in subsection A of Section 46 of this act [Section 1-608 of
this title], the Administrator may disclose a record obtained in connection
with an audit or inspection under subsection K of Section 14 of this act
[Section 1-305 of this title] or subsection D of Section 27 of this act
[Section 1-410 of this title] or a record obtained or created in connection
with an investigation under Section 40 of this act [Section 1-602 of this
title] so long as the receiving person specified in subsection A of Section
46 of this act [Section 1-608 of this title] provides assurances to
undertake such safeguards as are necessary and appropriate to protect the
confidentiality of files to which access is granted and information derived
therefrom.
§§ 1-608. Uniformity and cooperation with other agencies
A. The Administrator shall, in its discretion, cooperate,
coordinate, consult, and, subject to Section 45 of this act [Section 1-607
of this title], share records and information with the securities regulator
of another state, Canada, a Canadian province or territory, a foreign
jurisdiction, the Securities and Exchange Commission, the United States
Department of Justice, the Commodity Futures Trading Commission, the Federal
Trade Commission, the Securities Investor Protection Corporation, a
self-regulatory organization, a national or international organization of
securities regulators, a federal or state banking and insurance regulator,
and a governmental law enforcement agency to effectuate greater uniformity
in securities matters among the federal government, self-regulatory
organizations, states, and foreign governments.
B. In cooperating, coordinating, consulting, and sharing
records and information under this section and in acting by rule, order, or
waiver under this act, the Administrator shall, in its discretion, take into
consideration in carrying out the public interest the following general
policies:
1. Maximizing effectiveness of regulation for the
protection of investors;
2. Maximizing uniformity in federal and state regulatory
standards; and
3. Minimizing burdens on the business of capital
formation, without adversely affecting essentials of investor protection.
C. The cooperation, coordination, consultation, and sharing
of records and information authorized by this section includes:
1. Establishing or employing one or more designees as a
central depository for registration and notice filings under this act and
for records required or allowed to be maintained under this act;
2. Developing and maintaining uniform forms;
3. Conducting a joint examination or investigation;
4. Holding a joint administrative hearing;
5. Instituting and prosecuting a joint civil or
administrative proceeding;
6. Sharing and exchanging personnel;
7. Coordinating registrations under Sections 10 and 18
through 21 of this act [Sections 1-301 and 1-401 through 1-404 of this
title] and exemptions under Section 8 of this act [Section 1-203 of this
title]; 8. Sharing and exchanging records, subject to
Section 45 of this act [Section 1-607 of this title];
9. Formulating rules, statements of policy, guidelines, forms, and
interpretative opinions and releases; 10. Formulating
common systems and procedures;
11. Notifying the public of proposed rules, forms,
statements of policy, and guidelines; 12. Attending
conferences and other meetings among securities regulators, which may
include representatives of governmental and private sector organizations
involved in capital formation, deemed necessary or appropriate to promote or
achieve uniformity; and 13. Developing and maintaining
a uniform exemption from registration for small issuers, and taking other
steps to reduce the burden of raising investment capital by small
businesses.
§§ 1-609. Commission review of order -- Judicial review
A. Any person aggrieved by final order of the Administrator
may obtain a review by the Commission by filing with the Administrator,
within fifteen (15) days after the entry of the order, a written petition
praying that the order be modified or set aside in whole or in part and
stating the person’s specific grounds therefor. The petition, the record
upon which the final order was issued, and written briefs submitted by the
appealing parties and the Administrator shall be reviewed by the Commission.
The cost of preparing the record of the administrative hearing shall be
borne by the appealing parties. Oral argument by all parties may be heard by
the Commission en banc if requested by an appealing party. Other than newly
discovered evidence, additional evidence may only be presented by the
appealing party and/or the Administrator on the request of the Commission.
Upon the written request of the party on whose behalf the appeal is brought,
or upon the party’s own motion, the Administrator shall cause complete
stenographic notes to be taken of the proceeding before the Commission. If
requested by the appealing party, the cost of taking and transcribing such
notes shall be borne by the said appealing party. If such notes are taken
upon the motion of the Administrator, the cost shall be borne by the
Department. The Commission or a majority thereof shall make such order as is
deemed proper, just, and equitable within sixty (60) days of receipt by the
Administrator of the written petition of the appealing party or at such
later time as agreed to by all parties. B. Appeals by
any person aggrieved by a final order of the Commission, except a final
order of the Commission to cease and desist, shall be taken to the Supreme
Court of this state within thirty (30) days of the date that a copy of the
order is mailed to such person, as shown by the certificate of mailing
attached to the order. Any person aggrieved by a final order of the
Commission to cease and desist shall be taken to the district court of
Oklahoma County within thirty (30) days of the date that a copy of the order
is mailed to such person, as shown by the certificate of mailing attached to
the order. The proceedings for review shall be as now prescribed by law and
by rules of the reviewing court, subject to the power of the reviewing court
to make other and further rules with reference thereto.
C. The commencement of proceedings under this section before the Commission
shall not operate as a stay of the Administrator's order, unless so ordered
by the Commission. The commencement of proceedings under this section before
the Supreme Court shall not operate as a stay of the Commission's order,
unless so ordered by the Court.
§§ 1-610. Jurisdiction
A. Sections 10 and 11, subsection A of Section 18,
subsection A of Section 19, subsection A of Section 20, subsection A of
Section 21, and Sections 29, 34, 37, and 38 of this act [Sections 1-301 and
1-302, 1-401, 1-402, 1-403, 1-404, 1-501, 1-506, 1-509, and 1-510 of this
title] do not apply to a person that sells or offers to sell a security
unless the offer to sell or the sale is made in this state or the offer to
purchase or the purchase is made and accepted in this state.
B. Subsection A of Section 18, subsection A of Section 19, subsection A of
Section 20, subsection A of Section 21, and Sections 29, 34, 37, and 38 of
this act [Sections 1-401, 1-402, 1-403, 1-404, 1-501, 1-506, 1-509, and
1-510 of this title] do not apply to a person that purchases or offers to
purchase a security unless the offer to purchase or the purchase is made in
this state or the offer to sell or the sale is made and accepted in this
state. C. For the purpose of this section, an offer to
sell or to purchase a security is made in this state, whether or not either
party is then present in this state, if the offer:
1. Originates from within this state; or
2. Is directed by the offeror to a place in this state
and received at the place to which it is directed.
D. For the purpose of this section, an offer to purchase or
to sell is accepted in this state, whether or not either party is then
present in this state, if the acceptance:
1. Is communicated to the offeror in this state and the
offeree reasonably believes the offeror to be present in this state and the
acceptance is received at the place in this state to which it is directed;
and 2. Has not previously been communicated to the
offeror, orally or in a record, outside this state.
E. An offer to sell or to purchase is not made in this
state when a publisher circulates or there is circulated on the publisher's
behalf in this state a bona fide newspaper or other publication of general,
regular, and paid circulation that is not published in this state, or that
is published in this state but has had more than two thirds of its
circulation outside this state during the previous twelve (12) months or
when a radio or television program or other electronic communication
originating outside this state is received in this state. A radio or
television program, or other electronic communication is considered as
having originated in this state if either the broadcast studio or the
originating source of transmission is located in this state, unless:
1. The program or communication is syndicated and
distributed from outside this state for redistribution to the general public
in this state;
2. The program or communication is supplied by a radio,
television, or other electronic network with the electronic signal
originating from outside this state for redistribution to the general public
in this state;
3. The program or communication is an electronic
communication that originates outside this state and is captured for
redistribution to the general public in this state by a community antenna or
cable, radio, cable television, or other electronic system; or
4. The program or communication consists of an electronic communication that
originates in this state, but which is not intended for distribution to the
general public in this state.
F. Subsection A of Section 20, subsection A of Section 21,
subsection A of Section 22, and Sections 30, 33, and 34 of this act
[Sections 1-403, 1-404, 1-405, 1-502, 1-505 and 1-506 of this title] apply
to a person if the person engages in an act, practice, or course of business
instrumental in effecting prohibited or actionable conduct in this state,
whether or not either party is then present in this state.
§§ 1-611. Service of process
A. A consent to service of process required by this act
must be signed and filed in the form required by a rule adopted or order
issued under this act. A consent appointing the Administrator the person's
agent for service of process in a noncriminal action or proceeding against
the person or the person's successor or personal representative under this
act or a rule adopted or order issued under this act after the consent is
filed, has the same force and validity as if the service were made
personally on the person filing the consent. A person that has filed a
consent complying with this subsection in connection with a previous
application for registration or notice filing need not file an additional
consent. B. If a person, including a nonresident of
this state, engages in an act, practice, or course of business prohibited or
made actionable by this act or a rule adopted or order issued under this act
and the person has not filed a consent to service of process under
subsection A of this section, the act, practice, or course of business
constitutes the appointment of the Administrator as the person's agent for
service of process in a noncriminal action or proceeding against the person
or the person's successor or personal representative and has the same force
and validity as if the service were made personally on the person.
C. Service under subsection A or B of this section may be made by providing
a copy of the process to the office of the Administrator, but it is not
effective unless:
1. The plaintiff, which may be the Administrator,
promptly sends notice of the service and a copy of the process, return
receipt requested, to the defendant or respondent at the address set forth
in the consent to service of process or, if a consent to service of process
has not been filed, at the last known address, or takes other reasonable
steps to give notice; and 2. The plaintiff files an
affidavit of compliance with this subsection in the action or proceeding on
or before the return day of the process, if any, or within the time that the
court, or the Administrator in a proceeding before the Administrator,
allows.
D. Service pursuant to subsection C of this section may be
used in a proceeding before the Administrator or by the Administrator in a
civil action in which the Administrator is the moving party. Service by mail
shall be effective on the date of receipt by the defendant or respondent or
if refused, on the date of refusal by the defendant or respondent.
Acceptance or refusal of service by mail by a person who is fifteen (15)
years of age or older shall constitute acceptance or refusal by the party
addressed. Acceptance or refusal by any officer or by any employee of the
registered office or principal place of business who is authorized to or who
regularly receives certified mail shall constitute acceptance or refusal by
the party addressed. A return receipt signed at such registered office or
principal place of business shall be presumed to have been signed by an
employee authorized to receive certified mail. Refusal by any person to
accept delivery of the certified mail provided for in this section, or the
refusal to sign the return receipt, or the lack of knowledge of the
Administrator of any address to which process may have been mailed shall not
in any manner affect the legality of the service, and the person shall be
presumed to have had knowledge of the contents of the process.
E. If process is served under subsection C of this
section, the court, or the Administrator in a proceeding before the
Administrator, shall order continuances as are necessary or appropriate to
afford the defendant or respondent reasonable opportunity to defend.
§§ 1-612. Fees
A. Unless otherwise provided for by law, the following
shall be the fees charged pursuant to the provisions of this act:
1. Broker-dealer registration fee or renewal fee $300.00
2. Broker-dealer or issuer agent or broker-dealer
principal registration fee or renewal fee $50.00
3. Broker-dealer agent on an inactive basis, renewal fee
$10.00
4. Investment adviser registration fee or renewal fee
$300.00
5. Investment adviser annual notice filing fee $300.00
6. Investment adviser representative registration fee
or renewal fee $50.00
7. Mass transfer fee per transferee $10.00
8. Mailing list fee $30.00 per year
9. Review of sales literature package $50.00
10. Broker-dealer or investment adviser financial or
operating $50.00 reports
11. Issuer sales reports $50.00 12.
Notice of exemption filing or request for order of exemption $250.00
13. Interpretive opinion or no-action request $250.00
14. Affidavit request $10.00 15.
Service of process upon the Administrator $10.00
16. Amendments to registration statements or notice
filings pursuant to Section 11 of this act [Section 1-302 of this title]
involving changes to the issuer's application or notice filing form:
a. examination fee $50.00, and b.
a filing fee computed in the same manner as the filing fee required
pursuant to of subsection B of this section for any additional
securities being registered.
17. Copying fee.
a. 8 1/2" by 14" or smaller $.25 per page
b. Larger than 8 1/2" by 14" $1.00 per page
c. Certified copy 8 1/2" by 14" or smaller $1.00 per
page
d. Certified copy larger than 8 1/2" by 14" $2.00 per
page
18. Document search fee for commercial purpose $20.00 per
hour
19. Notice filing fee for a federal covered security
$250.00 under Section 18(b)(4) of the Securities Act of 1933
B. For the purpose of registering securities under this
act, any person filing a registration statement shall pay an examination fee
of Two Hundred Dollars ($200.00) and a filing fee computed upon the
aggregate offering price of the securities sought to be registered in
Oklahoma as follows:
a fee equal to one-tenth of one percent (1/10 of 1%) of
said price; provided, in no event shall the filing fee be less than Two
Hundred Dollars ($200.00) or more than Two Thousand Five Hundred Dollars
($2,500.00).
C. Any person making a notice filing pursuant to subsection A
of Section 1-302 of this title, or renewing such a filing, shall pay a filing
fee of Five Hundred Dollars ($500.00) with each such notice or renewal filed.
D. A person required to pay a filing or notice fee under this section may
transmit the fee through or to a person designated by rule adopted or order
issued under this act. All fees and other charges collected by the
Administrator shall be deposited in the General Revenue Fund with the State
Treasurer, except for the fees deposited in the Oklahoma Department of
Securities Revolving Fund and the amounts deposited in the Oklahoma
Department of Securities Investor Education Revolving Fund.
E. There is hereby created in the State Treasury a revolving fund for the
Oklahoma Department of Securities to be designated the "Oklahoma Department
of Securities Revolving Fund." The fund shall be a continuing fund, not
subject to fiscal year limitations, and shall consist of fees and other
charges collected by the Administrator as follows:
1. The fees collected pursuant to paragraphs 1, 4, 5, 8,
14, 15, 17, and 18 of subsection A of this section;
2. The fees collected pursuant to the provisions of
Section 1-504 of this title as provided in paragraph 9 of subsection A of
this section;
3. The examination fees designated in paragraph 16 of
subsection A and in subsection B of this section;
4. The amounts collected pursuant to subsection D of
Section 1-605 of this title set forth in paragraph 13 of subsection A of
this section; and
5. One Hundred Fifty Dollars ($150.00) of each filing fee
collected pursuant to subsection C of this section.
The Oklahoma Department of Securities Revolving Fund shall be a continuing
fund, not subject to fiscal year limitations. Expenditures from the Oklahoma
Department of Securities Revolving Fund shall be made pursuant to the laws
of this state and the statutes relating to the Oklahoma Department of
Securities, and without legislative appropriation. Expenditures from the
Oklahoma Department of Securities Revolving Fund shall be made upon warrants
issued by the State Treasurer against claims filed as prescribed by law with
the Director of the Office of Management and Enterprise Services for
approval and payment.
F. There is hereby created in the State Treasury a revolving fund for the
Oklahoma Department of Securities to be designated the “Oklahoma Department of
Securities Investor Education Revolving Fund.” The fund shall be a continuing
fund, not subject to fiscal year limitations, and shall consist of all amounts
collected pursuant to court order or judgment in actions brought by the
Administrator, and amounts received in multistate settlements participated in by
the Department, and interest attributable to the investment of the fund that
shall be deposited in the Oklahoma Department of Securities Investor Education
Revolving Fund. The Fund may be invested in any investment instrument allowed by
Oklahoma Statutes to the State Treasurer for the investment of state funds. Any
amounts received from any court settlement in excess of One Million Dollars
($1,000,000.00) shall be transferred to the General Fund. The Administrator
shall use the moneys in this fund exclusively for the specific purposes of
research for education and education of Oklahoma residents in matters concerning
securities laws and general investor protection. The Oklahoma Department of
Securities Investor Education Revolving Fund shall be a continuing fund, not
subject to fiscal year limitations. Expenditures from the Oklahoma Department of
Securities Investor Education Revolving Fund shall be made pursuant to the laws
of this state and the statutes relating to the Oklahoma Department of
Securities, and without legislative appropriation. Expenditures from the
Oklahoma Department of Securities Investor Education Revolving Fund shall be
made upon warrants issued by the State Treasurer against claims filed as
prescribed by law with the Director of the Office of Management and Enterprise
Services for approval and payment.
G. There is hereby created a petty cash fund for the Oklahoma
Department of Securities. The Director of the Office of Management and
Enterprise Services and the Administrator are hereby authorized and it shall be
their duty to fix the maximum amount of the petty cash fund, not to exceed Five
Hundred Dollars ($500.00). The Director of the Office of Management and
Enterprise Services shall prescribe all forms, systems, and procedures for
administering the petty cash fund. The fund shall be used solely to pay:
1. Examination, investigation and litigation expenses of
the Department, including, but not limited to, court costs, filing fees,
copying fees, and witness fees; and 2. Incidental
operating expenses of the Department not to exceed One Hundred Dollars
($100.00) per transaction.
H. Once paid, fees shall be nonrefundable.
I. Section 211 of Title 62 of the Oklahoma Statues shall
not apply to the Oklahoma Department of Securities or the Oklahoma
Securities Commission.
§§ 1-613. Availability of data for supervision of personnel
-- Sharing of data -- Confidentiality
A. A supervisory agency shall make available to a
requesting agency any data obtained or generated by, and in the possession
of, the supervisory agency and that the requesting agency deems necessary
for review in connection with the supervision of any person over which the
requesting agency has direct supervisory authority. However, the requested
data must relate to the person, or an affiliate of the person, over which
the requesting agency has direct supervisory authority. An agency has direct
supervisory authority over a person if such authority is specifically
provided by statute, or the agency granted the person's charter, license, or
registration, or otherwise granted permission for the person to conduct its
business in this state. B. When a requesting agency
and a federal regulatory agency or self-regulatory association have
concurrent jurisdiction over a person, a requesting agency may share with
such agency or association data received from a supervisory agency. However,
the federal regulatory agency or self-regulatory association must return
such shared data to the requesting agency unless the federal regulatory
agency or self-regulatory association has obtained approval from the
supervisory agency to retain the data. The term "federal regulatory agency"
shall not include law enforcement agencies. C.
1. Notwithstanding any other statute, rule, or policy governing or relating
to records of the requesting agency, all data received by a requesting
agency from a supervisory agency shall be and remain confidential and not
open to public inspection, subpoena, or any other form of disclosure while
in the possession of the requesting agency. Any request for inspection,
subpoena, or other form of disclosure shall be directed at the supervisory
agency from which the data originated and disclosure thereof shall be
subject to the laws, rules, and policies governing or relating to records of
the supervisory agency.
2. The provisions of data by a supervisory agency to a
requesting agency under this section shall not constitute a waiver of, or
otherwise affect, any privilege or claim of confidentiality that a
supervisory agency may claim with respect to such data under any federal
laws or laws of this state.
D. A supervisory agency is not required to share original
documents with a requesting agency. A requesting agency shall reimburse the
supervisory agency for costs associated with providing copies of data to the
requesting agency.
E. Nothing in the Oklahoma Financial Privacy Act shall
prohibit the sharing of data as described in this section. Additionally,
neither a supervisory agency nor requesting agency shall be required to
follow any procedure described in the Oklahoma Financial Privacy Act when
sharing data as described in this section.
F. As used in this section:
1. "Affiliate" shall mean any person that controls, is
controlled by, or is under common control with another person. A person
shall be deemed to have "control" over any person if the person:
a. directly or indirectly or acting through one or more
other persons owns, controls, or has power to vote ten percent (10%) or more
of any class of voting securities of the other person, or
b. the person controls in any manner the election,
appointment, or designation of a majority of the directors, trustees, or
other managing officers of the person;
2. "Data" shall mean copies of any documents, reports,
examination reports, letters, correspondence, orders, stipulations,
memorandums of understanding, agreements, or any other records not open for
public inspection generated by a supervisory agency or obtained by a
supervisory agency from the person it supervises, whether in paper or
electronic format. However, "data" shall not include records that a
requesting agency receives from a supervisory agency pursuant to this
section; 3. "Requesting agency" means, as applicable,
the Oklahoma State Banking Department, the Oklahoma Insurance Department, or
the Oklahoma Department of Securities, that requests from a supervisory
agency data relating to a person over which the requesting agency does not
have direct supervisory authority;
4. "Supervision" shall mean any examination, assessment, order, stipulation,
agreement, report, memorandum of understanding, or other regulatory matter
or process that a requesting agency is authorized to perform in relation to
a person; and 5. "Supervisory agency" shall mean, as
applicable, the Oklahoma State Banking Department, the Oklahoma Insurance
Department, or the Oklahoma Department of Securities, that maintains data
relating to a person over which the agency has direct supervisory authority.
ARTICLE 7 TRANSITION
§§ 1-701. Application of act to existing proceedings and
rights
A. The predecessor act exclusively governs all actions or
proceedings that are pending on the effective date of this act or may be
instituted on the basis of conduct occurring before the effective date of
this act, but a civil action may not be maintained to enforce any liability
under the predecessor act unless instituted within any period of limitation
that applied when the cause of action accrued or within five (5) years after
the effective date of this act, whichever is earlier.
B. All effective registrations under the predecessor act, all administrative
orders relating to the registrations, rules, statements of policy,
interpretative opinions, declaratory rulings, no action determinations, and
conditions imposed on the registrations under the predecessor act remain in
effect while they would have remained in effect if this act had not been
enacted. They are considered to have been filed, issued, or imposed under
this act, but are exclusively governed by the predecessor act.
C. The predecessor act exclusively applies to an offer or sale made within
one (1) year after the effective date of this act pursuant to an offering
made in good faith before the effective date of this act on the basis of an
exemption available under the predecessor act.
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