Louisiana Revised Statutes 51:712 – Unlawful practices
Terms Used In Louisiana Revised Statutes 51:712
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Commissioner: means the commissioner of financial institutions who is also the commissioner of securities. See Louisiana Revised Statutes 51:702
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- 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
- Fraud: Intentional deception resulting in injury to another.
- Investment adviser: means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities. See Louisiana Revised Statutes 51:702
- Issuer: means every person who issues or proposes to issue any security, except that with respect to certificates of deposit, voting-trust certificates, or collateral-trust certificates or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors or persons performing similar functions or in an unincorporated investment trust of the fixed, restricted management, or unit type, the term "issuer" means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which such securities are issued, except that:
(a) In the case of an unincorporated association which provides by its articles for limited liability of any or all of its members or in the case of a trust, committee, or other legal entity, the trustees or members thereof shall not be individually liable as issuers of any security issued by the association, trust, committee, or other legal entity. See Louisiana Revised Statutes 51:702
- 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
- Prospectus: means any notice, circular, advertisement, sales literature, letter, offering circular, offering sheet, or communication, written or by radio or television, which offers any security for sale or which is used in connection with any such offer or which confirms the sale of any security, except that:
(a) A confirmation of the sale of a security which is sent or given after the effective date of the registration statement shall not be deemed a prospectus if it is proved that prior to or at the same time with such confirmation a written prospectus, meeting the requirements of Louisiana Revised Statutes 51:702
- 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
- Trustee: A person or institution holding and administering property in trust.
A. It shall be unlawful for any person:
(1) To offer to sell or to sell any security in violation of La. Rev. Stat. 51:703, 705, or any rule, regulation or order promulgated or issued by the commissioner under this Part.
(2) To offer to sell or to sell a security by means of any oral or written untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, the buyer not knowing of the untruth or omission, if such person in the exercise of reasonable care could not have known of the untruth or omission.
(3) To offer or sell any security:
(a) Registered under La. Rev. Stat. 51:705(B) by means of any prospectus except a prospectus which complies with La. Rev. Stat. 51:705(B)(3).
(b) Registered under La. Rev. Stat. 51:705(E) by means of any prospectus except a prospectus which complies with La. Rev. Stat. 51:705(E)(3).
(c) Registered under La. Rev. Stat. 51:705(F) by means of any prospectus except a prospectus which complies with La. Rev. Stat. 51:705(F)(4).
B. It shall be unlawful for any person to make to any prospective purchaser, customer, or client any representation that the filing or effectiveness of a registration statement or the registration of any security under La. Rev. Stat. 51:705, or the existence of any exemption for any security or transaction means that the commissioner has passed in any way upon the truth, completeness, or accuracy of such registration statement or the merits of such security or has recommended or given approval to such security or transaction.
C. It shall be unlawful for any person who:
(1) Is a dealer, salesman, or investment adviser under this Part.
(2) Is making an application for registration as a dealer, salesman or investment adviser under this Part.
(3) Is an issuer which has filed a registration statement with respect to securities it intends to issue.
(4) Is an affiliate of any of the persons described in Paragraph (1), (2), or (3) of this Subsection knowingly to cause to be made, in any document filed with the commissioner or in any proceeding under this Part, any statement which is, at the time it is made and in light of the circumstances under which it is made, false or misleading in any material respect.
D. It shall be unlawful for any person in connection with the offer, sale, or purchase of any security, directly or indirectly:
(1) To employ any device, scheme, or artifice to defraud.
(2) To engage in any transaction, act, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser or seller.
E.(1) For purposes of this Subsection, the following terms shall have the meanings set forth below:
(a) “Allocated share” shall mean any plan security held by a trustee, beneficially or of record, that is allocated to the account of a participant.
(b) “Investment plan” shall mean any plan, trust or similar arrangement that invests in securities and that satisfies each of the following requirements:
(i) At least ten percent of the total number of participants are residents of or domiciled in this state.
(ii) The trustee or a majority of the trustees are residents of or domiciled in this state.
(c) “Issuing corporation” shall mean the issuer of a particular plan security.
(d) “Participants” shall mean all persons who have accounts in an investment plan.
(e) “Plan documents” shall mean the documents and other instruments pursuant to which an investment plan is established and governed.
(f) “Plan security” shall mean any security that is held beneficially or of record by a trustee, whether such security is at the time an allocated share, unallocated share or uninstructed share.
(g) “Trustee” shall mean the natural person, natural persons, entity or entities named as trustee or trustees under the terms of an investment plan, in the capacity as such.
(h) “Unallocated share” shall mean any plan security held by a trustee, beneficially or of record, that is not allocated to the account of a participant.
(i) “Uninstructed share” shall mean any allocated share as to which the trustee has not received, from the participant to whose account such share is allocated, instructions as to how to vote such allocated share in a matter properly submitted to the vote of the shareholders of the issuing corporation.
(2) If, with respect to any investment plan:
(a) The plan documents provide that participants have the right to direct in a confidential manner:
(i) Whether any plan securities will be tendered in response to a tender or exchange offer for such plan securities.
(ii) How any plan securities shall be voted on any particular matter to come before a vote of shareholders of the issuing corporation; and
(b) A valid tender or exchange offer has been made for plan securities or a matter has come before the vote of the shareholders of an issuing corporation relating, directly or indirectly, to the possible offer or sale of plan securities, whether pursuant to:
(i) A merger or consolidation of the issuing corporation with or into any other person.
(ii) The sale of all or substantially all of the assets of the issuing corporation.
(iii) The liquidation or dissolution of the issuing corporation.
(iv) A contested election of directors of the issuing corporation.
(v) The removal or adoption of any defensive devices by the issuing corporation, or otherwise, then, it shall be unlawful for the trustee not to permit participants to tender or direct the voting of the plan securities in the manner set forth in the plan documents, and the trustee shall have no authority or discretion whatsoever to tender or vote, as the case may be, any plan securities in any manner inconsistent with or contrary to the specific instructions of the participants relating to such plan securities.
Acts 1985, No. 722, §1; Acts 1991, No. 787, §1, eff. July 19, 1991; Acts 1999, No. 250, §1.