Louisiana Revised Statutes 51:714 – Civil liability from sales of securities
Terms Used In Louisiana Revised Statutes 51:714
- Commissioner: means the commissioner of financial institutions who is also the commissioner of securities. See Louisiana Revised Statutes 51:702
- Contract: A legal written agreement that becomes binding when signed.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Dealer: means every person, other than a salesman registered under this Part, who engages, either for all or part of his time, directly or indirectly, as agent, broker, or principal in the business of offering, buying, selling, or otherwise dealing or trading in securities issued by another person but does not include:
(i) A bank chartered and issued a certificate of authority by the state of Louisiana and under the supervision of the commissioner of financial institutions, a national bank chartered by the government of the United States and under the supervision of the Comptroller of the Currency of the United States, a bank holding company organized under the laws of the state of Louisiana and under the supervision of the Board of Governors of the Federal Reserve, or the employees of such banks or bank holding companies acting in their official capacity. See Louisiana Revised Statutes 51:702
- Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
- Executive officer: means the president, the principal financial officer, the principal operating officer, each vice president with responsibility involving policy-making functions for a significant aspect of a person's business, the secretary, the treasurer, or any other person performing similar functions with respect to any organization, whether incorporated or unincorporated. See Louisiana Revised Statutes 51:702
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- offer: shall include every attempt or offer to dispose of or solicitation of an offer to buy a security or interest in a security for value. See Louisiana Revised Statutes 51:702
- Person: means an individual, a corporation, a partnership, an association, a joint-stock company, a trust where the interest of the beneficiaries is evidenced by a security, or any unincorporated organization. See Louisiana Revised Statutes 51:702
- Plaintiff: The person who files the complaint in a civil lawsuit.
- Rescission: The cancellation of budget authority previously provided by Congress. The Impoundment Control Act of 1974 specifies that the President may propose to Congress that funds be rescinded. If both Houses have not approved a rescission proposal (by passing legislation) within 45 days of continuous session, any funds being withheld must be made available for obligation.
- Salesman: means an individual, other than a dealer registered under this Part, employed, appointed, or authorized by a dealer or by an issuer, to sell securities in this state, but does not include any person specified in Louisiana Revised Statutes 51:702
- Security: means any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in any 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; any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof); or, in general, any interest or instrument commonly known as a "security"; or any 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. See Louisiana Revised Statutes 51:702
- sell: means and shall include every contract of sale or disposition of a security or interest in a security for value. See Louisiana Revised Statutes 51:702
- State: means any state (or a designated state), territory, or possession of the United States, the District of Columbia, Puerto Rico and the Virgin Islands. See Louisiana Revised Statutes 51:702
A. Any person who violates La. Rev. Stat. 51:712(A) shall be liable to the person buying such security, and such buyer may sue in any court to recover the consideration paid in cash or, if such consideration was not paid in cash, the fair value thereof at the time such consideration was paid for the security with interest thereon from the date of payment down to the date of repayment as computed in La. Rev. Stat. 51:714(C)(1), less the amount of any income received thereon, together with all taxable court costs and reasonable attorney’s fees, upon the tender, where practicable, of the security at any time before the entry of judgment, or for damages if he no longer owns the security. Damages are the amount which equals the difference between the fair value of the consideration the buyer gave for the security and the fair value of the security at the time the buyer disposed of it, plus interest thereon from the date of payment to the date of repayment as computed in La. Rev. Stat. 51:714(C)(2).
B. Every person who directly or indirectly controls a person liable under Subsection A of this Section, every general partner, executive officer, or director of such person liable under Subsection A of this Section, every person occupying a similar status or performing similar functions, and every dealer or salesman who participates in any material way in the sale is liable jointly and severally with and to the same extent as the person liable under Subsection A of this Section unless the person whose liability arises under this Subsection sustains the burden of proof that he did not know and in the exercise of reasonable care could not have known of the existence of the facts by reason of which liability is alleged to exist. There is contribution as in the case of contract among several persons so liable.
C.(1) No person may sue under this Section more than two years from the date of the contract for sale or sale, if there is no contract for sale. No person may sue under this Section:
(a) If the buyer received a written offer, before suit and at a time when he owned the security, to repay in cash or by certified or official bank check, within thirty days from the date of acceptance of such offer in exchange for the securities, the fair value of the consideration paid, determined as of the date such payment was originally paid by the buyer, together with interest on such amount for the period from the date of payment to the date of repayment, such interest to be computed in case the security consists of an interest-bearing obligation, at the same rate as provided in the security or, in case the security consists of other than an interest-bearing obligation, at the applicable rate of legal interest, less, in every case, the amount of any income received on the security, and:
(i) Such offeree does not accept the offer within thirty days of its receipt or
(ii) If such offer was accepted, the terms thereof were complied with by the offeror;
(b) If the buyer received a written offer before suit and at a time when he did not own the security to repay in cash or by certified or official bank check, within thirty days from the date of acceptance of such offer, an amount equal to the difference between the fair value of the consideration the buyer gave for the security and the fair value of the security at the time the buyer disposed of it, together with interest on such amount for the period from the date of payment down to the date of repayment, such interest to be computed in case the security consists of an interest-bearing obligation at the same rate as provided in the security, or, in case the security consists of other than an interest-bearing obligation, at the applicable rate of legal interest, less, in every case, the amount of any income received on the security, and:
(i) Such offeree does not accept the offer within thirty days of its receipt or
(ii) If such offer was accepted, the terms thereof were complied with by the offeror;
(2) Provided, that no written offer shall be effective within the meaning of this Subsection unless, if it were an offer to sell securities, it would be exempt under La. Rev. Stat. 51:709 or, if registration would have been required, then unless such rescission offer has been registered and effected under La. Rev. Stat. 51:705. Any person who is paid for his security in the amount provided by this Subsection shall be foreclosed from asserting any remedies under this Part, regardless of whether the other requirements of this Subsection have been complied with.
D. Every cause of action under this Part survives the death of any person who might have been a plaintiff or defendant.
E. Nothing in this Part shall limit any statutory or civil right of any person to bring action in any court for any act involved in the sale of securities or the right of this state to punish any person for any violation of any law. The attorney general and each of the district attorneys throughout this state, with regard to violation of this Part in their respective districts, shall lend full assistance to the commissioner in any investigations or prosecutions that the commissioner may deem necessary under the provisions of this Part.
Acts 1985, No. 722, §1.