409.107. No investment firm, legal firm offering bond counsel services, or any persons having an interest in any such firms shall be involved in the issuance of bonds authorized by an election in which the firm or person made any direct or indirect financial contribution to any campaign in support of the bond election. For the purposes of this section, direct or indirect financial contribution shall not include services with respect to providing factual information relating to the prospective bond issuance, responding to questions and making presentations at public forums relative to prospective bond issuance, or participation in any meeting subject to the open meetings law.
(L. 1992 S.B. 705 § 8, A.L. 2007 S.B. 22)
409.108. It is unlawful for any person, in any investigation or other proceeding under this chapter, to alter, destroy, mutilate, conceal, make a false entry in, or by any means falsify, remove from any place or withhold any record, document, or tangible, electronic or physical evidence with the intent to impede, obstruct, avoid, evade, or influence the official investigation or administration of any other proceeding under this chapter.
(L. 2004 H.B. 1617)
409.109. A person who willfully violates section 409.108 shall upon conviction be fined not more than five hundred thousand dollars or imprisoned not more than ten years, or both. The proper prosecuting attorney with or without a criminal reference from the commissioner, or the attorney general under section 27.030, RSMo, may institute criminal proceedings under this section.
(L. 2004 H.B. 1617)
409.111. The commissioner of securities may conduct pursuant to the authorization of section 409.6-602 such investigations as the commissioner considers necessary to determine whether a person has violated, is violating, or is about to violate any provision of sections 409.108 to 409.114 or any order, rule or regulation issued pursuant thereto.
(L. 2004 H.B. 1617)
409.112. If the commissioner 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 sections 409.108 to 409.114, or any order, rule or regulation issued pursuant thereto 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 sections 409.108 to 409.114, the commissioner may maintain an action for relief authorized pursuant to section 409.6-603.
(L. 2004 H.B. 1617)
409.113. If the commissioner 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 sections 409.108 to 409.114, or any order, rule or regulation issued pursuant thereto 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 sections 409.108 to 409.114, or any order, rule or regulation issued pursuant thereto, the commissioner may issue such orders as authorized pursuant to section 409.6-604.
(L. 2004 H.B. 1617)
409.114. Sections 409.108 to 409.114 shall be administered by the commissioner of securities. The commissioner of securities is hereby empowered to promulgate, alter, amend or revoke rules and regulations pursuant to section 409.6-605 as necessary to carry out the purposes of sections 409.108 to 409.114.
(L. 2004 H.B. 1617)
409.500. Sections 409.500 to 409.566 may be cited as the "Missouri Takeover Bid Disclosure Act".
(L. 1978 S.B. 820 § 1, A.L. 1986 H.B. 1667)(1982) Missouri's Takeover Bid Disclosure Act as enacted by S.B. 820, L. 1978, was held invalid under the commerce clause of Article 1 of the U.S. Constitution. National City Lines, Inc. v. LLC. Corp. (8th Cir.) 687 F.2d 1122.
409.506. As used in sections 409.500 to 409.566, the following terms shall have the following meanings:
(1) "Takeover bid", the acquisition of or offer to acquire by an offeror from an offeree, pursuant to a tender offer or request or invitation for tenders, any equity security of a target company, if after acquisition thereof the offeror would, directly or indirectly, be a beneficial owner of more than five percent of any class of the issued and outstanding equity securities of such target company. Such term does not include:
(a) Bids made by a dealer for his own account in the ordinary course of his business of buying and selling such security;
(b) An offer to acquire such equity security solely in exchange for other securities, or the acquisition of such equity security pursuant to such offer, for the sole account of the offeror, in good faith and not for the purpose of avoiding this section, and not involving any public offering of such other securities within the meaning of section 4 of title I of the Securities Act of 1933, (48 Stat. 77, 15 U.S.C. 77d(2)); as amended;
(c) Any other offer to acquire an equity security, or the acquisition of such equity security pursuant to such offer, for the sole account of the offeror, from not more than fifty offerees, in good faith and not for the purpose of avoiding the provisions of sections 409.500 to 409.566;
(d) Any offer or class of offer where, prior to making the offer, the offeror beneficially owns, directly or indirectly, a majority of the voting equity securities of the target company;
(2) "Offeror", a person who makes, or in any way participates or aids in making, a takeover bid, and includes persons acting jointly or in concert, or who intend to exercise jointly or in concert any voting rights attached to the securities for which such takeover bid is made. An "offeror" includes an issuer of securities whose securities are or are to be the subject of a takeover bid whether or not the issuer, upon acquisition, will become the beneficial owner of such securities. An "offeror" does not include any bank or broker-dealer in securities loaning funds to the offeror in the ordinary course of the business of the bank or broker-dealer in securities and not otherwise participating in the takeover bid, or any bank, broker-dealer in securities, attorney, accountant or consultant furnishing information or advice to an offeror and not otherwise participating in the takeover bid;
(3) "Offeree", the beneficial owner, residing in this state, of securities which an offeror acquires or offers to acquire in connection with a takeover bid;
(4) "Target company", a resident domestic corporation as defined in subdivision (13) of subsection 1 of section 351.459, RSMo;
(5) "Equity security", any stock, bond, or other obligation of a target company, the holder of which has the right to vote for the election of members of the board of directors of such target company. Equity security includes any right, option or warrant to purchase an equity security.
(L. 1986 H.B. 1667)
409.511. 1. No offeror shall make a takeover bid unless as soon as practicable on the date of commencement of the takeover bid he files with the commissioner of securities and delivers to the target company at its principal executive offices a registration statement containing the information required by section 409.516.
2. An offeror shall make full and fair disclosure to offerees of the material information set forth in the registration statement filed pursuant to subsection 1 of this section.
3. No solicitation or recommendation to the offerees of a target company to accept or reject a takeover bid shall be made by or on behalf of an offeror or a target company unless at the time copies of such solicitation or recommendation are first published, sent or given to such offerees, the person making such solicitation or recommendation has filed copies of the solicitation or recommendation with the commissioner of securities of this state.
(L. 1986 H.B. 1667)
409.516. 1. The registration statement required to be filed pursuant to subsection 1 of section 409.511 shall include:
(1) Copies of all prospectuses, brochures, advertisements, circulars, letters, or other matter by means of which the offeror proposes to disclose to offerees all information material to a decision to accept or reject the offer;
(2) The identity and background of all persons on whose behalf the acquisition of any equity security of the target company has been or is to be effected;
(3) The exact title and number of shares outstanding of the class of equity securities being sought, the number of such securities being sought and the consideration being offered therefor;
(4) The source and amount of funds or other consideration used or to be used in acquiring any equity security, including a statement describing any securities, other than the existing capital stock or long-term debt of the offeror, which are being offered in exchange for the equity securities of the target company and also including copies of all loan or credit agreements and letters of commitment used or to be used to secure financing for the acquisition of any equity security of the target company;
(5) A statement of any plans or proposals which the offeror, upon gaining control, may have to liquidate the target company, sell its assets, effect a merger or consolidation of it, or make any other major change in its business, corporate structure, management personnel, or policies of employment;
(6) The number of shares of any equity security of the target company of which each offeror is beneficial or record owner or has a right to acquire, directly or indirectly, together with the name and address of each person defined in this section as an offeror;
(7) Particulars as to any contracts, arrangements, or understandings to which an offeror is party with respect to any equity security of the target company, including without limitation transfers of any equity security, joint ventures, loans or option arrangements, puts and calls, guarantees of loan, guarantees against loss, guarantees of profits, division of losses or profits, or the giving or withholding of proxies, naming the persons with whom such contracts, arrangements, or understandings have been entered into;
(8) Complete information on the organization and operations of the offeror, including without limitation the year of organization, form of organization, jurisdiction in which it is organized, a description of each class of the offeror's capital stock and of its long-term debt, financial statements for the current period and for the three most recent annual accounting periods, a description of pending legal proceedings other than routine litigation to which the offeror or any of its subsidiaries is a party or of which any of their property is the subject, a brief description of the business done and projected by the offeror and its subsidiaries and the general development of such business over the past five years, the names of all directors and executive officers together with biographical summaries of each for the preceding three years to date;
(9) A statement as to the potential impact, if any, of the offeror's plans or proposals on the residents of this state, including any material change in the location of the target company's offices or business activities within this state; any plant or facility relocation; any plant or facility closings; any significant reduction in the workforce at an individual plant or facility; any other material change in the number, job classification, compensation, or other terms and conditions of employment of persons employed by the target company in this state; any material change in the relationships of the target company with suppliers or customers within this state, or any other material changes in the target company's business, corporate structure, management, personnel or activities which would have a substantial impact on residents of this state;
(10) Particulars as to any pension plans; profit sharing plans; savings plans; educational opportunities; relocation adjustments; labor relations records, including violations of the federal National Labor Relations Act, Occupational Safety and Health Act of 1970, Fair Labor Standards Act, or Employee Retirement and Income Security Act, as amended, finally adjudicated or settled within five years of the commencement of the takeover bid; earnings and dividend growth; community activities; and charitable, cultural, educational and civic contributions of the offeror;
(11) If the offeror is a natural person, information concerning his identity and background, including without limitation financial statements for the current and three preceding years, a description of his business activities and affiliations during that time period, and a description of any pending or administrative proceedings, other than routine and immaterial litigation, to which the offeror is a party or of which any of his property is the subject; and
(12) If debt securities or preferred stock are either offered in the takeover bid or used as a source of funds in making the takeover bid, the investment rating, if any, by a generally recognized rating service of such debt security or preferred stock.
2. If any material change occurs in the facts set forth in the registration statement required by subsection 1 of section 409.511, the offeror who filed such statement shall promptly notify the commissioner of securities and the target company of such change in writing or by telephone confirmed in writing and shall amend the registration statement, to reflect such change promptly but not later than the date such change is first published, sent or given to offerees.
3. The commissioner of securities may permit the omission of any information required by subsection 1 of this section to be included in the registration statement if he determines that such information is immaterial or otherwise unnecessary for the protection of offerees.
(L. 1986 H.B. 1667)
409.521. 1. The commissioner of securities may conduct such investigation as he deems necessary concerning any takeover bid for the purpose of determining compliance with the requirements of sections 409.500 to 409.566. As part of such investigation the commissioner of securities may require persons to file statements in writing and under oath with his office, subpoena witnesses, compel their attendance, examine them under oath and require the production of books, records, documents and papers.
2. In the event the commissioner of securities determines that any person is violating or about to violate any provision of sections 409.500 to 409.566, or any order, rule or regulation issued pursuant thereto, he may seek, in court, an injunction temporarily or permanently barring that person from making or taking part in or continuing a takeover bid or from taking up or paying for shares tendered by offerees pursuant to a takeover bid, and the court may grant the relief applied for or so much thereof as it may deem proper.
(L. 1986 H.B. 1667)
409.526. 1. Every person who willfully violates any provision of sections 409.500 to 409.566 shall be guilty of a class A misdemeanor.
2. Every person who violates any provision of sections 409.500 to 409.566 shall be subject to a civil penalty of one thousand dollars per violation if a natural person or ten thousand dollars per violation if a corporation. When the violation is the failure to file a registration statement as required by subsection 1 of section 409.511 the failure to file a solicitation or recommendation as required by subsection 3 of section 409.511 or the failure to amend such registration statement as required by subsection 2 of section 409.516 each business day of nonregistration or failure to file a recommendation or solicitation or failure to amend constitutes a separate violation. The penalty imposed by this section shall be cumulative and more than one penalty shall be recoverable in the same action in any court of competent jurisdiction.
(L. 1986 H.B. 1667)
409.531. 1. Sections 409.500 to 409.566 shall be administered by the commissioner of securities and employees designated by him. The commissioner of securities is hereby empowered to promulgate, alter, amend or revoke rules and regulations necessary to carry out the purposes of sections 409.500 to 409.566.
2. The commissioner of securities may establish fees for the filing of any registration statement, not to exceed two thousand five hundred dollars, to recover the costs of administering sections 409.500 to 409.566. Such fees may vary according to the maximum consideration payable by the offeror for the securities which are the subject of the takeover bid.
(L. 1986 H.B. 1667)
409.536. The attorney general may prosecute every person charged with the commission of a criminal offense arising from the violation of any provision of sections 409.500 to 409.566. In all such proceedings, the attorney general may appear in person or by his deputy before any court of record or any grand jury and exercise all the powers and perform all the duties in respect of such actions or proceedings which the prosecuting attorney would otherwise be authorized or required to exercise or perform; or the attorney general may in his discretion transmit evidence, proof and information as to such offense to the prosecuting attorney of the county or counties in which the alleged violation has occurred, and every prosecuting attorney to whom such evidence, proof and information is so transmitted shall forthwith proceed to prosecute any corporation, company, association, or officer, manager or agent thereof, or any firm or person charged with such violation. In any such proceeding, wherein the attorney general has appeared either in person or by deputy, the prosecuting attorney shall only exercise such powers and perform such duties as are required of him by the attorney general or the deputy attorney general so appearing.
(L. 1986 H.B. 1667)
409.541. 1. Every nonresident offeror, whether or not such offeror has filed a registration statement, except a foreign corporation which has appointed and keeps a resident agent in this state, shall be deemed to have appointed the secretary of state as his agent upon whom may be served any lawful process, authorized by sections 409.500 to 409.566, with the same effect as though served upon the offeror personally.
2. Service of process pursuant to this section shall be accomplished by leaving a copy of the process in the office of the secretary of state, but it shall not be effective unless notice of the service and a copy of the process is sent by certified or registered mail to the nonresident offeror served, at his last known address.
(L. 1986 H.B. 1667)
409.546. 1. No person shall make any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engage in any fraudulent, deceptive, or manipulative acts or practices, in connection with any takeover bid or any solicitation of offerees in opposition to or in favor of any such takeover bid.
2. Fraudulent, deceptive or manipulative acts or practices include without limitation those acts and practices prescribed by rules and regulations which the commissioner of securities is hereby empowered to adopt, promulgate, amend and rescind as is necessary to carry out the provisions of this section.
(L. 1986 H.B. 1667)
409.551. Sections 409.500 to 409.566 shall not apply when:
(1) The offeror or the target company is a public utility or a public utility holding company as defined in section 2 of the Public Utility Holding Company Act of 1935, (49 Stat. 803, 15 U.S.C. 79), as amended, and the takeover bid is subject to approval by the appropriate federal agency as provided in such act;
(2) The offeror or the target company is a bank or a bank holding company as subject to the Bank Holding Company Act of 1956, (70 Stat. 133, 12 U.S.C. 1841), and subsequent amendments thereto, and the takeover bid is subject to approval by the appropriate federal agency as provided in such act;
(3) The offeror or the target company is a savings and loan holding company as defined in section 2 of the Savings and Loan Holding Company Amendments of 1967, (82 Stat. 5, 12 U.S.C. 1730A), as amended, and the takeover bid is subject to approval by the appropriate federal agency as provided in such act;
(4) The offeror and the target company are banks and the offer is part of a merger transaction subject to approval by appropriate federal or state supervisory authorities.
(L. 1986 H.B. 1667)
409.556. In the event any provision or application of sections 409.500 to 409.566 is held illegal or invalid for any reason, such holding shall not affect the legality or validity of any other provision or application thereof.
(L. 1986 H.B. 1667)
409.561. If the takeover bid is not subject to the requirements of section 14(d) of the Securities Exchange Act of 1934, 15 U.S.C. 78n(d), the following additional requirements shall apply to the takeover bid:
(1) The takeover bid shall be made on the same terms to all offerees holding the same class or series of securities;
(2) The period of time within which equity securities may be deposited pursuant to a takeover bid shall not be less than thirty business days;
(3) Equity securities deposited pursuant to a takeover bid may be withdrawn at any time until the expiration of thirty business days after the commencement of the takeover bid and at any time after the expiration of sixty-five days from the commencement of the takeover bid, if the shares have not been purchased, and until the expiration of ten business days following the date of commencement of another offeror's takeover bid for the same equity securities if the shares have not been purchased and if the bidder has received notice or otherwise has knowledge of the commencement of such takeover bid;
(4) Where a takeover bid is made for less than all the outstanding equity securities of a class and where a greater number of such securities is deposited pursuant thereto than the offeror is bound or willing to take up and pay for, the securities taken up and paid for by the offeror shall be taken up and paid for as nearly as possible on a pro rata basis, disregarding fractions, according to the number of securities deposited by each shareholder;
(5) Where an offeror increases the consideration offered in a takeover bid, the offeror shall pay the increased consideration for all equity securities accepted, whether such securities have been accepted by the offeror before or after the increase in consideration;
(6) Within ten days of the filing of a registration statement as required by section 409.511 the commissioner of securities may schedule a public hearing or hearings or conduct such investigation as he deems necessary concerning any takeover bid for the purpose of determining compliance with the requirements of sections 409.500 to 409.566. Any such hearing or investigation shall be declared by order of the commissioner of securities. Any initial hearing shall commence within twenty days of the filing of a registration statement;
(7) In the event the commissioner of securities shall schedule a public hearing or otherwise conduct an investigation pursuant to subdivision (6) of this section, the commissioner of securities may also, in his discretion, issue an order staying the offeror from purchasing or paying for any shares tendered in response to its takeover bid at any time prior to such purchasing or paying for shares tendered. Every person shall comply with every such order;
(8) In the event the attorney shall issue a stay payment order pursuant to subdivision (7) of this section, the commissioner of securities shall, no later than thirty days from the issuance of such stay payment order, issue an order containing his findings of fact and conclusions of law;
(9) Any stay payment order issued by the commissioner of securities pursuant to subdivision (7) of this section shall automatically expire within sixty days from its issuance except where the commissioner of securities has in his order containing findings of fact and conclusions of law conditioned the purchase and payment for shares tendered upon changes or modifications in the registration statement, in which event any stay payment order shall be vacated by the commissioner of securities after he is satisfied that such changes or modifications have been publicly disseminated to offerees;
(10) The commissioner of securities may apply, on notice to the offeror and the target company, to a court of competent jurisdiction, and such court may grant an application, for good cause, to extend any of the time periods set forth in this section if an extension is necessary for the protection of offerees.
(L. 1986 H.B. 1667)
409.566. Any offeree whose equity securities are the subject of a takeover bid and who has been injured by any violation of sections 409.500 to 409.566 may bring an action in his or her own name to enjoin such unlawful act or practice and to recover actual damages together with reasonable attorney fees in the event the offeree is successful.
(L. 1986 H.B. 1667)
409.800. As used in sections 409.800 to 409.863, the following terms shall mean:
(1) "CFTC Rule", any rule or order of the Commodity Futures Trading Commission;
(2) "Board of trade", any person or group of persons engaged in buying or selling any commodity or receiving the same for sale on consignment, whether such person or group of persons is characterized as a board of trade, exchange or other form of marketplace;
(3) "Commissioner", the commissioner of securities provided for in this chapter;
(4) "Commodity", except as otherwise specified by the commissioner by rule or order, any agricultural, grain or livestock product or by-product, any metal or mineral (including a precious metal as defined in subdivision (13) of this section), any gem or gemstone (whether characterized as precious, semiprecious or otherwise), any fuel (whether liquid, gaseous or otherwise), any foreign currency, and all other goods, articles, products or items of any kind; except that, the term "commodity" shall not include:
(a) A numismatic coin whose fair market value is at least twenty percent higher than the value of the metal it contains;
(b) Real property or any agricultural or livestock product grown or raised on real property and offered or sold by the owner or lessee of such real property; or
(c) Any work of art offered or sold by art dealers at public auction or offered or sold through a private sale by the owner thereof;
(d) Any consignment of goods to another person or merchant by an owner if the goods are received in the ordinary course of the consignee's business;
(5) "Commodity contract", any account, agreement or contract for the purchase or sale, primarily for speculation or investment purposes and not for use or consumption by the offeree or purchaser, of one or more commodities, whether for immediate or subsequent delivery or whether delivery is intended by the parties, and whether characterized as a cash contract, deferred shipment or deferred delivery contract, forward contract, futures contract, installment or margin contract, leverage contract or otherwise. Any commodity contract offered or sold shall, in the absence of evidence to the contrary, be presumed to be offered or sold for speculation or investment purposes. A commodity contract shall not include any contract or agreement which requires, and under which the purchaser receives, within twenty-eight calendar days from the payment in good funds of any portion of the purchase price, physical delivery of the total amount of each commodity to be purchased under the contract or agreement;
(6) "Commodity Exchange Act", the act of Congress known as the Commodity Exchange Act, as amended, codified at 7 U.S.C. § 1, et seq.;
(7) "Commodity Futures Trading Commission", the independent regulatory agency established by Congress to administer the Commodity Exchange Act;
(8) "Commodity merchant", any of the following, as defined or described in the Commodity Exchange Act or by CFTC Rule:
(a) Futures commission merchants;
(b) Commodity pool operators;
(c) Commodity trading advisors;
(d) Introducing brokers;
(e) Leverage transaction merchants;
(f) Any person associated with any of the persons listed in paragraphs (a) to (e) of this subdivision;
(g) Floor brokers; and
(h) Any other person, other than a futures association, required to register with the Commodity Futures Trading Commission;
(9) "Commodity option", any account, agreement or contract giving a party thereto the right to purchase or sell one or more commodities or one or more commodity contracts, or both, whether characterized as an option, privilege, indemnity, bid, offer, put, call, advance guaranty, decline guaranty or otherwise. The term "commodity contract" shall not include a commodity option traded on a national securities exchange registered with the United States Securities and Exchange Commission;
(10) "Financial institution", any bank, savings institution or trust company organized under, or supervised pursuant to, the laws of the United States or of any state;
(11) "Offer" or "offer to sell" includes every offer, every attempt to offer to dispose of, or solicitation of an offer to buy, to purchase or to acquire, for value;
(12) "Person", any individual, corporation, partnership, association, joint-stock company, trust where the interests of the beneficiaries are evidenced by a security, unincorporated organization, government, or political subdivision of a government. The term "person" shall not include a contract market designated by the Commodity Futures Trading Commission, or any clearinghouse thereof, or a national securities exchange registered with the Securities and Exchange Commission, or any employee, officer or director of such contract market, clearinghouse or exchange acting solely in that capacity;
(13) "Precious metal", silver, gold or platinum, in either coin, bullion or other form, and such other precious metals as the commissioner may specify by rule or order;
(14) "Sale" or "sell" includes every sale, contract of sale, contract to sell, or disposition, for value.
(L. 1985 H.B. 409 & 532 § 1)
409.803. 1. Except as otherwise provided in subdivision (1) of subsection 1 of section 409.806, no person shall offer to enter into, enter into, or confirm the execution of, any transaction for the delivery of any commodity under a commodity contract commonly known as a margin account, margin contract, leverage account, or leverage contract, or under any contract, account, arrangement, scheme, or device that serves the same function or functions or is marketed or managed in substantially the same manner as such account or contract.
2. No person shall sell or purchase, or offer to sell or purchase, any commodity under any other commodity contract or under any commodity option or offer to enter into or enter into as seller or purchaser any other commodity contract or any commodity option. The provisions of this subsection shall not apply to any of the following persons, or any employee, officer or director thereof acting solely in that capacity:
(1) A person registered with the Commodity Futures Trading Commission as a futures commission merchant or as a leverage transaction merchant whose activities require such registration;
(2) A person registered with the Securities and Exchange Commission as a broker-dealer whose activities require such registration;
(3) A person affiliated with, and whose obligations and liabilities are guaranteed by, a person referred to in subdivision (1) or (2) of this subsection;
(4) A person who is a member of a contract market designated by the Commodity Futures Trading Commission, or any clearinghouse thereof;
(5) A financial institution;
(6) A person registered under the laws of this state as a securities broker-dealer whose activities require such registration; or
(7) A person registered as a commodity broker-dealer or commodity sales representative in accordance with the provisions of sections 409.850 to 409.863.
(L. 1985 H.B. 409 & 532 § 2)
409.806. 1. The provisions of section 409.803 shall not apply to the following:
(1) A transaction within the exclusive jurisdiction of the Commodity Futures Trading Commission as granted under the Commodity Exchange Act;
(2) A commodity contract for the purchase of one or more precious metals which requires, and under which the purchaser receives, within seven calendar days from the payment in good funds of any portion of the purchase price, physical delivery of the quantity of the precious metals purchased by such payment; provided that, for purposes of this subdivision, physical delivery shall be deemed to have occurred if, within such seven-day period, such quantity of precious metals purchased by such payment is delivered, whether in specifically segregated or fungible bulk form, into the possession of a depository other than the seller which is either a financial institution, a depository the warehouse receipts of which are recognized for delivery purposes for any commodity on a contract market designated by the Commodity Futures Trading Commission, a storage facility licensed or regulated by the United States or any agency thereof, or a depository designated by the commissioner and such depository (or other person which itself qualifies as a depository as aforesaid) issues and the purchaser receives, a certificate, document of title, confirmation or other instrument evidencing that such quantity of precious metals has been delivered to the depository and is being and will continue to be held by the depository on the purchaser's behalf, free and clear of all liens and encumbrances, other than liens of the purchaser, tax liens, liens agreed to by the purchaser, or liens of the depository for fees and expenses, which have previously been disclosed to the purchaser;
(3) A commodity contract for the sale of a cash commodity for deferred shipment or delivery entered into solely between persons engaged in producing, processing, using commercially or handling as merchants, each commodity subject thereto, or any by-product thereof; or
(4) A commodity contract under which the offeree or the purchaser is a person referred to in subdivisions (1) through (7) of subsection 2 of section 409.803, an insurance company, an investment company as defined in the Investment Company Act of 1940, or an employee pension and profit sharing or benefit plan other than a self-employed individual retirement plan, or individual retirement account.
2. The commissioner may promulgate rules and issue orders prescribing the terms and conditions of all transactions and contracts covered by the provisions of sections 409.800 to 409.863 which are not within the exclusive jurisdiction of the Commodity Futures Trading Commission as granted by the Commodity Exchange Act, exempting any person or transaction from any provision of sections 409.800 to 409.863, conditionally or unconditionally, and otherwise implementing the provisions of sections 409.800 to 409.863 for the protection of purchasers and sellers of commodities. No rule or portion of a rule promulgated under the authority of this chapter shall become effective unless it has been promulgated pursuant to the provisions of section 536.024, RSMo.
(L. 1985 H.B. 409 & 532 § 3, A.L. 1993 S.B. 52, A.L. 1995 S.B. 3)
409.808. 1. No person shall engage in a trade or business or otherwise act as a commodity merchant unless such person is registered or temporarily licensed with the Commodity Futures Trading Commission for each activity constituting such person as a commodity merchant and such registration or temporary license shall not have expired, nor been suspended nor revoked; or is exempt from such registration by virtue of the Commodity Exchange Act or of a CFTC Rule.
2. No board of trade shall trade, or provide a place for the trading of, any commodity contract or commodity option required to be traded on or subject to the rules of a contract market designated by the Commodity Futures Trading Commission unless such board of trade has been so designated for such commodity contract or commodity option and such designation shall not have been vacated, nor suspended nor revoked.
(L. 1985 H.B. 409 & 532 § 4)
409.810. No person shall, directly or indirectly:
(1) Cheat or defraud, attempt to cheat or defraud, or employ any device, scheme or artifice to cheat or defraud, any other person;
(2) Make any false report, enter any false record, or make any untrue statement of a material fact;
(3) Engage in any transaction, act, practice or course of business, including, without limitation, any form of advertising or solicitation, which operates or would operate as a fraud or deceit upon any person; or
(4) Misappropriate or convert the funds, security or property of any other person; in or in connection with the purchase or sale of, the offer to sell, the offer to enter into, or the entry into of, any commodity contract or commodity option subject to the provisions of section 409.803 or subdivision (2), (3), or (4) of subsection 1 of section 409.806; except that, the provisions of subdivision (2) of this section shall not apply to a commodity contract covered by subdivision (3) of subsection 1 of section 409.806.
(L. 1985 H.B. 409 & 532 § 5)
409.813. 1. The act, omission, or failure of any official, agent, or other person acting for any individual, association, partnership, corporation, or trust within the scope of his employment or office shall be deemed the act, omission, or failure of such individual, association, partnership, corporation, or trust, as well as of such official, agent, or other person.
2. Every person who directly or indirectly controls another person liable under any provision of sections 409.800 to 409.863, every partner, officer, or director of such other person, every person occupying a similar status or performing similar functions, and every employee of such other person who materially aids in the violation is also liable jointly and severally with and to the same extent as such other person, unless the person who is also liable by virtue of this subsection sustains the burden of proof that he did not know and, in exercise of reasonable care, could not have known of the existence of the facts by reason of which the liability is alleged to exist.
(L. 1985 H.B. 409 & 532 § 6)
409.816. Nothing in sections 409.800 to 409.863 shall impair, derogate or otherwise affect the authority or powers of the commissioner under this chapter or the application of any provision of this chapter to any person or transaction subject thereto.
(L. 1985 H.B. 409 & 532 § 7)
409.818. Sections 409.800 to 409.863 may be construed and implemented to effectuate their general purpose to protect investors, to prevent and prosecute illegal and fraudulent schemes involving commodities and to maximize coordination with federal and other states' law and the administration and enforcement thereof.
(L. 1985 H.B. 409 & 532 § 8)
409.820. 1. The commissioner may make investigations, within or without this state, as he finds necessary or appropriate to:
(1) Determine whether any person has violated, or is about to violate, any provision of sections 409.800 to 409.863 or any rule or order of the commissioner; or
(2) Aid in enforcement of sections 409.800 to 409.863.
2. The commissioner may publish information concerning any violations of sections 409.800 to 409.863 or any rule or order issued or promulgated under sections 409.800 to 409.863.
3. For purposes of any investigation or proceeding under sections 409.800 to 409.863, the commissioner, or any officer or employee designated by rule or order of the commissioner, may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the commissioner finds to be relevant or material to the inquiry. If a person does not give testimony or produce the documents required by the commissioner, or a designated employee, pursuant to an administrative subpoena, the commissioner, or his designated employee, may apply for a court order compelling compliance with the subpoena or the giving of the required testimony. The request for order of compliance may be addressed to either:
(1) The circuit court of Cole County or the circuit court where service may be obtained on the person refusing to testify or produce, if the person is within this state; or
(2) The appropriate court of the state having jurisdiction over the person refusing to testify or produce, if the person is outside this state.
(L. 1985 H.B. 409 & 532 § 9)
409.823. 1. If the commissioner believes, whether or not based upon an investigation conducted under section 409.820, that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of sections 409.800 to 409.863 or any rule or order promulgated or issued under sections 409.800 to 409.863, the commissioner may:
(1) Issue a cease and desist order;
(2) Take disciplinary action against a licensed person as specified in section 409.863;
(3) Issue an order imposing a civil penalty in amount which may not exceed ten thousand dollars for any single violation or one hundred thousand dollars for multiple violations in a single proceeding or a series of related proceedings; or
(4) Initiate any of the actions specified in subsection 2 of this section.
2. The commissioner may institute any of the following actions in the appropriate courts of this state, or in the appropriate courts of another state, in addition to any legal or equitable remedies otherwise available:
(1) An action for declaratory judgment;
(2) An action for a prohibitory or mandatory injunction to enjoin the violation and to insure compliance with sections 409.800 to 409.863 or any rule or order of the commissioner;
(3) An action for appointment of a receiver or conservator for the defendant or the defendant's assets.
(L. 1985 H.B. 409 & 532 § 10)
409.826. 1. (1) Upon a proper showing by the commissioner that a person has violated, or is about to violate, any provision of sections 409.800 to 409.863 or any rule or order of the commissioner, the circuit court may grant appropriate legal or equitable remedies. Upon showing of violation of sections 409.800 to 409.863 or a rule or order of the commissioner, the court, in addition to traditional legal and equitable remedies, including temporary restraining orders, permanent or temporary prohibitory or mandatory injunctions, and writs of prohibition or mandamus, may grant the following special remedies:
(a) Imposition of a civil penalty in amount which may not exceed ten thousand dollars for any single violation or one hundred thousand dollars for multiple violations in a single proceeding or a series of related proceedings;
(b) Declaratory judgment;
(c) Restitution to investors wishing restitution; and
(d) Appointment of a receiver or conservator for the defendant or the defendant's assets.
(2) Upon a proper showing that the defendant is only about to violate sections 409.800 to 409.863 or a rule or order of the commissioner, appropriate remedies shall be limited to:
(a) A temporary restraining order;
(b) A temporary or permanent injunction;
(c) A writ of prohibition or mandamus; or
(d) An order appointing a receiver or conservator for the defendant or the defendant's assets.
2. The court shall not require the commissioner to post a bond in any official action under sections 409.800 to 409.863.
3. (1) Upon a proper showing by the commissioner or securities or commodity agency of another state that a person other than a government or governmental agency or instrumentality has violated, or is about to violate, any provision of the commodity code of that state or any rule or order of the administrator or securities or commodity agency of that state, the circuit court may grant appropriate legal and equitable remedies. Upon a showing of a violation of the securities or commodity act of the foreign state or a rule or order of the administrator or securities or commodity agency of the foreign state, the court, in addition to traditional legal or equitable remedies including temporary restraining orders, permanent or temporary prohibitory or mandatory injunctions and writs of prohibition or mandamus, may grant the following special remedies:
(a) Appointment of a receiver, conservator, or ancillary receiver or conservator for the defendant or the defendant's assets located in this state.
(2) Upon a proper showing that the defendant is only about to violate the securities or commodity act of the foreign state or a rule or order of the administrator or securities or commodity agency of the foreign state, appropriate remedies shall be limited to:
(a) A temporary restraining order;
(b) A temporary or permanent injunction;
(c) A writ of prohibition or mandamus; or
(d) An order appointing a receiver, conservator, or ancillary receiver or conservator for the defendant or the defendant's assets located in this state.
(L. 1985 H.B. 409 & 532 § 11)
409.828. 1. Any person who willfully violates any provision of sections 409.800 to 409.863 shall, upon conviction, be fined not more than twenty thousand dollars or imprisoned for not more than ten years, or both, for each such violation.
2. The commissioner may refer such evidence as is available concerning violations of sections 409.800 to 409.863 to the attorney general or the proper prosecuting attorney, who may, with or without such a reference from the commissioner, institute the appropriate criminal proceedings under sections 409.800 to 409.863.
(L. 1985 H.B. 409 & 532 § 12)
409.830. 1. Sections 409.800 to 409.863 shall be administered by the commissioner. Neither the commissioner nor any employees of the commissioner shall use any information which is filed with or obtained by the commissioner and which is not public information for personal gain or benefit, nor shall the commissioner nor any of his employees conduct any securities or commodity dealings whatsoever based upon any such information, even though public, if there has not been a sufficient period of time for the securities or commodity markets to assimilate such information.
2. All information collected, assembled or maintained by the commissioner is public information and is available for the examination of the public as provided by chapter 610, RSMo, except for the following, which are deemed to be confidential:
(1) Information obtained in private investigations pursuant to section 409.820;
(2) Information made confidential by the provisions of chapter 610, RSMo; and
(3) Information obtained from federal agencies which may not be disclosed under federal law. The commissioner, in his discretion, may disclose any information made confidential under this subsection to persons listed in subsection 1 of section 409.833.
3. No provision of sections 409.800 to 409.863 either creates or derogates any privilege which exists at common law, by statute, or otherwise when any documentary or other evidence is sought under subpoena directed to the commissioner or any employee of the commissioner.
(L. 1985 H.B. 409 & 532 § 13)
409.833. 1. To encourage uniform application and interpretation of sections 409.800 to 409.863 and securities regulation and enforcement in general, the commissioner and the employees of the commissioner may cooperate, including bearing the expense of the cooperation, with the securities agencies or administrator of another jurisdiction, Canadian province or territory, or such other agencies administering this act*, the Commodity Futures Trading Commission, the Securities and Exchange Commission, any self-regulatory organization established under the Commodity Exchange Act or the Securities Exchange Act of 1934, any national or international organization of commodities or securities officials or agencies, and any governmental law enforcement agency.
2. The cooperation authorized by subsection 1 of this section shall include, but need not be limited to, the following:
(1) Making joint examinations or investigations;
(2) Holding joint administrative hearings;
(3) Filing and prosecuting joint litigation;
(4) Sharing and exchanging personnel;
(5) Sharing and exchanging information and documents;
(6) Formulating and adopting mutual regulations, statements of policy, guidelines, proposed statutory changes and releases; and
(7) Issuing and enforcing subpoenas at the request of the agency administering sections 409.800 to 409.863 in another jurisdiction, the securities agency of another jurisdiction, the Commodity Futures Trading Commission or the Securities and Exchange Commission if the information sought would also be subject to lawful subpoena for conduct occurring in this state.
(L. 1985 H.B. 409 & 532 § 14)*Words "this act" appear in original rolls; apparently §§ 409.800 to 409.863 intended.
409.836. In addition to specific authority granted elsewhere in sections 409.800 to 409.863, the commissioner may make, amend, and rescind rules, forms, and orders as are necessary to carry out the provisions of* sections 409.800 to 409.863.
(L. 1985 H.B. 409 & 532 § 15)*Word "of" does not appear in original rolls; omitted by typographical error.
409.838. 1. Every applicant for registration under sections 409.800 to 409.863 shall file with the commissioner, in such form as he by rule prescribes, an irrevocable consent appointing the commissioner, or his successor in office, to be his attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against him, or his successor executor or administrator, which arises under sections 409.800 to 409.863, or any rule or order promulgated or issued under sections 409.800 to 409.863, after the consent has been filed, with the same force and validity as if served personally on the person filing the consent. Service may be made by leaving a copy of the process in the office of the commissioner, but it is not effective unless:
(1) The plaintiff, who may be the commissioner in a suit, action, or proceeding instituted by him, forthwith sends notice of the service and a copy of the process by registered mail to the defendant or respondent at his last address on file with the commissioner; and
(2) The plaintiff's affidavit of compliance with this subsection is filed in the case on or before the return day of the process, if any, or within such further time as the court allows.
2. When a person, including a nonresident of this state, engages in conduct prohibited or made actionable by sections 409.800 to 409.863, or any rule or order of the commissioner, the engaging in such conduct shall constitute the appointment of the commissioner as such person's attorney to receive service of any lawful process in a noncriminal proceeding against such person, his successor, or personal representative, which grows out of that conduct and which is brought under sections 409.800 to 409.863 or any rule or order of the commissioner with the same force and validity as if served personally.
3. Service under subsection 1 of this section may be made by leaving a copy of the process in the office of the commissioner, but it is not effective unless:
(1) The plaintiff, who may be the commissioner in a suit, action or proceeding instituted by him, forthwith sends notice of the service and a copy of the process by registered mail to the defendant or respondent at his last address known to the commissioner; and
(2) The plaintiff's affidavit of compliance with this subsection is filed in the case on or before the return day of the process, if any, or within such further time as the court allows.
(L. 1985 H.B. 409 & 532 § 16)
409.840. 1. Sections 409.803, 409.808 and 409.810 apply to persons who:
(1) Sell or offer to sell when:
(a) An offer to sell is made in this state; or
(b) An offer to buy is made and accepted in this state;
(2) Buy or offer to buy when:
(a) An offer to buy is made in this state; or
(b) An offer to sell is made and accepted in this state.
2. For the purpose of this section:
(1) An offer to sell or to buy is made in this state, whether or not either party is then present in this state, when the offer:
(a) Originates from this state; or
(b) Is directed by the offeror to this state and received at the place to which it is directed, or at any post office in this state in the case of a mailed offer;
(2) An offer to buy or to sell is accepted in this state when acceptance:
(a) Is communicated to the offeror in this state; and
(b) Has not previously been communicated to the offeror, whether or not either party is then present in this state, when the offeree directs it to the offeror in this state reasonably believing the offeror to be in this state and it is received at the place to which it is directed, or at any post office in this state in the case of a mailed acceptance;
(3) An offer to sell or to buy is not made in this state when the publisher circulates, or there is circulated on his behalf, in this state, any bona fide newspaper or other publication of general, regular, and paid circulation:
(a) Which is not published in this state; or
(b) Which is published in this state, but has had more than two-thirds of its circulation outside this state during the past twelve months. For the purpose of this subdivision, when a publication is published in editions, each edition shall be considered a separate publication except for material common to all editions;
(4) An offer to sell or to buy is not made in this state 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 shall be considered having originated from this state if either the broadcast studio or means of transmission is located within this state, unless:
(a) The program or communication is syndicated and distributed from outside this state for redistribution to the general public in this state;
(b) 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;
(c) The program or communication is an electronic signal that originates outside this state and is captured for redistribution to the general public in this state by a community antenna or cable radio, television, or other electronic system; or
(d) The program or communication consists of an electronic signal which originates from within this state, but which is not intended for redistribution to the general public in this state. This subdivision shall not apply to any changes, alterations or additions made locally to a radio or television program or other electronic communications.
(L. 1985 H.B. 409 & 532 § 17)
409.843. 1. The commissioner shall commence an administrative proceeding under sections 409.800 to 409.863 by entering either a notice of intent to do a contemplated act or a summary order. The notice of intent or summary order may be entered without notice, without opportunity for hearing, and need not be supported by findings of fact or conclusions of law, but must be in writing. Upon entry of a notice of intent or summary order, the commissioner shall promptly notify all interested parties that the notice or summary order has been entered and the reasons therefor. If the proceeding is pursuant to a notice of intent, the commissioner shall inform all interested parties of the date, time, and place set for the hearing on the notice. If the proceeding is pursuant to a summary order, the commissioner shall inform all interested parties that they have thirty business days from the entry of the order to file a written request for a hearing on the matter with the commissioner and that the hearing will be scheduled to commence within thirty business days after the receipt of the written request.
2. If a proceeding is initiated under this section pursuant to a summary order, the commissioner, whether or not a written request for a hearing is received from any interested party, may set the matter down for hearing on the commissioner's own motion.
3. If no hearing is requested and none is ordered by the commissioner, a summary order issued under this section shall automatically become a final order after thirty business days.
4. If a hearing is requested or ordered under this section, the commissioner, after notice of, and opportunity for, hearing to all interested persons, may modify or vacate the order or extend it until final determination. No final order or order after hearing may be returned without:
(1) Appropriate notice to all interested persons;
(2) Opportunity for hearing by all interested persons; and
(3) Entry of written findings of fact and conclusions of law.
5. Every hearing in an administrative proceeding under sections 409.800 to 409.863 shall be public unless the commissioner grants a request joined in by all the respondents that the hearing be conducted privately.
(L. 1985 H.B. 409 & 532 § 18)
409.846. 1. Any person aggrieved by a final order of the commissioner may obtain judicial review of such order in the manner provided in chapter 536, RSMo, for the review of contested cases.
2. Upon the filing of a petition for review, except where the taking of additional evidence is ordered by the court pursuant to subsection 3 or 4 of this section, the court shall have exclusive jurisdiction of the matter, and the commissioner may not modify or set aside the order, in whole or in part.
3. The filing of a petition for review under subsection 1 of this section, does not, unless specifically ordered by the court, operate as a stay of the commissioner's order, and the commissioner may enforce or ask the court to enforce the order pending the outcome of the review proceedings.
4. If either the aggrieved party or the commissioner applies to the court for leave to adduce additional evidence and shows to the satisfaction of the court that there were reasonable grounds for failure to adduce the evidence in the hearing before the commissioner or other good cause, the court may order the additional evidence to be taken by the commissioner under such conditions as the court considers proper.
5. If new evidence is ordered taken by the court, the commissioner may modify the findings and order by reason of the additional evidence and shall file in the court the additional evidence together with any modified or new findings or order.
6. The court shall review the petition based upon the original record before the commissioner as amended under subsections 3 and 4 of this section. The findings of the commissioner as to the facts, if supported by competent, material, and substantive evidence, are conclusive. Based upon this review, the court may affirm, modify, enforce, or set aside the order, in whole or in part.
(L. 1985 H.B. 409 & 532 § 19)
409.848. It shall not be necessary to negative any of the exemptions of sections 409.800 to 409.863 in any complaint, information or indictment, or any writ or proceeding brought under sections 409.800 to 409.863; and the burden of proof of any such exemption shall be upon the party claiming the same.
(L. 1985 H.B. 409 & 532 § 20)
409.850. 1. An applicant for licensing as a commodity broker-dealer or commodity sales representative shall file with the commissioner an application for licensing together with a consent to service of process pursuant to section 409.838. The application for licensing shall contain the information which the commissioner determines, by rule, is necessary or appropriate to facilitate the administration of sections 409.850 to 409.863.
2. Each applicant for licensing under sections 409.850 to 409.863 shall pay a fee as follows:
(1) For a license as a commodity broker-dealer, one hundred dollars, and for each branch office, fifty dollars; and
(2) For a license as a commodity sales representative, twenty-five dollars.
3. Except in any year in which a licensing fee is paid, an applicant shall pay an annual fee as follows:
(1) Each commodity broker-dealer, seventy-five dollars, and for each branch office in this state, thirty dollars; and
(2) Each commodity sales representative, fifteen dollars.
4. For purposes of this section, a "branch office" shall mean each office of a commodity broker-dealer in this state, other than the principal office in this state of the commodity broker-dealer, from which three or more commodity sales representatives transact business.
5. If an application is denied or withdrawn or the license is terminated by revocation, cancellation, or withdrawal, the commissioner shall retain the fee paid.
(L. 1985 H.B. 409 & 532 § 21)
409.853. 1. The commissioner may, by rule or order, impose an examination requirement upon:
(1) Any applicant applying for licensing under sections 409.850 to 409.863; or
(2) Any class of applicants.
2. Any examination required may be administered by the commissioner, or his designee. Examinations may be oral, written or both, and may differ for each class of applicants.
3. The commissioner may, by order, waive any examination requirement imposed pursuant to this section as to any applicant, if the commissioner determines that such examination is not necessary for the protection of investors.
(L. 1985 H.B. 409 & 532 § 22)
409.856. 1. Unless a proceeding under section 409.863 has been instituted, the license of any commodity broker-dealer or commodity sales representative becomes effective thirty days after an application for licensing and the last of any additional information requested by the commissioner, or his designee, has been filed, provided that all examination requirements imposed pursuant to section 409.853 have been satisfied. The commissioner may, by order, authorize an earlier effective date of licensing.
2. The license of a commodity broker-dealer or commodity sales representative shall expire on December thirty-first of the year for which issued, or at such other time as the commissioner may, by rule, prescribe.
3. The license of a commodity sales representative is only effective with respect to transactions effected as an employee or otherwise on behalf of the commodity broker-dealer or issuer for whom the commodity sales representative is licensed.
4. No person shall at any one time act as a commodity sales representative for more than one commodity broker-dealer or one issuer, except:
(1) Where the commodity broker-dealers for whom the commodity sales representative will act are affiliated by direct or indirect common control, a commodity sales representative may represent each of those organizations; or
(2) Where the commissioner, by rule or order, authorizes multiple licenses as consistent with the public interest and protection of investors.
5. When a commodity sales representative begins or terminates association with a commodity broker-dealer or issuer, or begins or terminates activities which make that person a commodity sales representative, the commodity sales representative and the former commodity broker-dealer on whose behalf the commodity sales representative was acting shall notify promptly the commissioner or his designee.
6. If the commissioner shall determine, by rule, that one or more classifications of licenses as a commodity broker-dealer or commodity sales representative which are subject to limitations and conditions on the nature of the activities which may be conducted by those persons are consistent with the public interest and the protection of investors, the commissioner may authorize the licensing of persons subject to specific limitations and conditions.
(L. 1985 H.B. 409 & 532 § 23)
409.858. 1. For so long as a commodity broker-dealer or commodity sales representative is licensed under sections 409.850 to 409.863, he shall file an annual report, together with the fee specified by rule of the commissioner promulgated under section 409.836, at a time and including that information which the commissioner determines, by rule or order, is necessary or appropriate.
2. The commissioner may, by rule, require a licensed commodity broker-dealer to maintain:
(1) Minimum net capital; and
(2) A prescribed ratio between net capital and aggregate indebtedness. The minimum net capital and net capital-to-aggregate-indebtedness ratio may vary with type or class of commodity broker-dealer.
3. If a licensed commodity broker-dealer believes, or has reasonable cause to believe, that any requirement imposed on it under subsection 2 of this section is not being met, it shall promptly notify the commissioner of its current financial condition.
4. The commissioner may, by rule, require the furnishing of fidelity bonds from commodity broker-dealers.
5. A licensed commodity broker-dealer shall file financial and other reports which the commissioner determines, by rule, are necessary or appropriate.
6. A licensed commodity broker-dealer or commodity sales representative shall make and maintain records as the commissioner determines, by rule, are necessary or appropriate. Required records may be maintained in computer or microform format or any other form of data storage provided that the records are readily accessible to the commissioner. Required records must be preserved for five years unless the commissioner, by rule, specifies either a longer or shorter period for a particular type or class of records.
7. If the information contained in any document filed with the commissioner, or his designee pursuant to this section, except for those documents which the commissioner, by rule or order, may exclude from this requirement, is or becomes inaccurate or incomplete in any material respect, the licensed person shall promptly file a correcting amendment, unless notification of the correction has been given under subsection 5 of section 409.856.
(L. 1985 H.B. 409 & 532 § 24)
409.860. 1. The commissioner, without prior notice, may examine the records and require copies of the records which a licensed commodity broker-dealer or commodity sales representative is required to make and maintain under section 409.858, within or without this state, in a manner which is reasonable under the circumstances. Commodity broker-dealers and commodity sales representatives shall make their records available to the commissioner in a readable form.
2. The commissioner may copy records or require a licensed person to copy records and provide the copies to the commissioner in a manner reasonable under the circumstances.
3. The commissioner may impose reasonable fees for conducting an examination pursuant to this section.
(L. 1985 H.B. 409 & 532 § 25)
409.863. 1. The commissioner may, by order, deny, suspend, or revoke any license, limit the activities which an applicant or licensed person may perform in this state, conserve any applicant or licensed person, or bar any applicant or licensed person from association with a licensed commodity broker-dealer, if the commissioner finds that the order is in the public interest and that the applicant or licensed person or, in the case of a commodity broker-dealer any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the commodity broker-dealer:
(1) Has filed an application for licensing with the commissioner, or his designee, which, as of its effective date, or as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact;
(2) Has violated or failed to comply with a provision of sections 409.800 to 409.863 or a rule or order promulgated or issued under sections 409.800 to 409.863;
(3) Is the subject of an adjudication or determination within the last five years by a securities agency or administrator or court of competent jurisdiction that the person has willfully violated the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, or the Commodity Exchange Act, or the securities law of any other state, but only if the acts constituting the violation of that state's law would constitute a violation of sections 409.800 to 409.863 had the acts taken place in this state;
(4) Has, within the last ten years, pled guilty or nolo contendere to, or been convicted of, any crime indicating a lack of fitness to engage in the investment commodities business;
(5) Is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in, or continuing, any conduct or practice demonstrating* a lack of fitness to engage in the investment commodities business;
(6) Is the subject of an order of the commissioner denying, suspending, or revoking the person's license as a commodity or securities broker-dealer, sales representative, or investment adviser;
(7) Is the subject of any of the following orders which are currently effective and which were issued within the last five years:
(a) An order by the securities agency or administrator of another state, Canadian province or territory, or the Securities and Exchange Commission, entered after notice and opportunity for hearing, denying, suspending, or revoking the person's license as a commodities or securities broker-dealer, sales representative, or investment adviser, or the substantial equivalent of those terms;
(b) A suspension or expulsion from membership in or association with a self-regulatory organization registered under the Securities and Exchange Act of 1934 or the Commodity Exchange Act;
(c) A United States Postal Service fraud order;
(d) A cease and desist order entered after notice and opportunity for hearing by the commissioner or the securities agency or administrator of any other state, Canadian province or territory, the Securities and Exchange Commission, or the Commodity Futures Trading Commission;
(e) An order entered by the Commodity Futures Trading Commission denying, suspending, or revoking registration under the Commodity Exchange Act;
(8) Has engaged in any unethical or dishonest conduct or practice in the investment commodities or securities business;
(9) Is insolvent, either in the sense that liabilities exceed assets, or in the sense that obligations cannot be met as they mature;
(10) Is not qualified on the basis of such factors as training, experience, and knowledge of the securities business, which determination shall be governed and limited by the provisions of subsection 3 of this section;
(11) Has failed reasonably to supervise sales representatives or employees; or
(12) Has failed to pay the proper filing fee within thirty days after being notified by the commissioner of the deficiency. The commissioner shall vacate any order made under this subdivision when such deficiency has been corrected.
2. The commissioner may not institute a suspension or revocation proceeding on the basis of a fact or transaction disclosed in the license application unless the proceeding is instituted within the next ninety days following issuance of the license.
3. If the public interest or the protection of investors so requires, the commissioner may, by order, summarily suspend a license or postpone the effective date of a license. Upon the entry of the order the commissioner shall promptly notify the applicant or licensed person, as well as the commodity broker-dealer with whom the person is or will be associated if the applicant or licensed person is a commodity sales representative, that an order has been entered and of the reasons therefor and that within fifteen days after the receipt of a written request the matter will be set down for hearing. The provisions of this section shall apply with respect to all subsequent proceedings.
4. If the commissioner finds that any applicant or licensed person is no longer in existence or has ceased to do business as a broker-dealer, sales representative, or investment adviser, or is subject to an adjudication of mental incompetence or to the control of a committee, conservator, or guardian, or cannot be located after reasonable search, the commissioner may, by order, cancel the application or license.
(L. 1985 H.B. 409 & 532 § 26)*Word "demonstrating" does not appear in original rolls, omitted through typographical error.
409.950. Notwithstanding any other law to the contrary, securities or other obligations issued by multinational development banks in which the United States is a member nation, including the African Development Bank, shall be treated as eligible for investment by all employee retirement systems and by all fiduciaries created or regulated pursuant to the laws of this state. Nothing in this section or in section 379.080, RSMo, shall be construed to require such investments.
(L. 1985 H.B. 589 § 1, A.L. 2007 S.B. 66)
409.1000. 1. For the purposes of sections 409.1000 to 409.1006, "business opportunity" means the sale or lease of any product, equipment, supplies or services which are sold or leased to a purchaser to enable the purchaser to start a business for which the purchaser is required to pay an initial fee or sum of money in excess of five hundred dollars to the seller, and in which the seller represents:
(1) That the seller or a person or entity affiliated with, or referred by, the seller will provide locations, or assist the purchaser in finding locations, for the use or operation of vending machines, racks, display cases or other similar devices or currency-operated amusement machines or devices on premises neither owned nor leased by the purchaser or the sellers;
(2) That the promoter or its affiliate or designee will refund all or a substantial part of the purchaser's initial payment if the purchaser is unsuccessful or dissatisfied with the business opportunity;
(3) That the seller guarantees in writing that the purchaser will derive income from the business opportunity which exceeds the price paid or rent charged for the business opportunity or that the seller will refund all or part of the price paid or rent charged for the business opportunity or will repurchase any of the products, equipment, supplies or chattels supplied by the seller, if the purchaser is not satisfied with the business opportunity; or
(4) That the business opportunity is free from risk or certain to produce profits, which representation may arise from all of the assurances taken as a whole.
2. For purposes of subsection 1 of this section the term "assist the purchaser in finding locations" includes, but is not limited to, supplying the purchaser with names of locator companies, contracting with the purchaser to provide assistance or supply names or collecting a fee on behalf of or for a locator company.
3. For purposes of sections 409.1000 to 409.1006, "business opportunity" does not include:
(1) The sale of ongoing businesses when the owner of those businesses sells and intends to sell only those business opportunities so long as those business opportunities to be sold are no more than five in number; or
(2) The not-for-profit sale of sales demonstration equipment, materials or samples for a price that does not exceed five hundred dollars or any sales training course offered by the seller, the cost of which does not exceed five hundred dollars.
4. For purposes of sections 409.1000 to 409.1006, "purchaser" shall include a lessee and "seller" shall include a lessor.
(L. 2000 S.B. 896 § 407.2000)
409.1003. 1. A business opportunity seller shall not:
(1) Misrepresent, by failure to disclose or otherwise, the known required total investment for such business opportunity;
(2) Misrepresent or fail to disclose efforts to sell or establish more franchises or distributorships than it is reasonable to expect the market or market area for the particular business opportunity to sustain;
(3) Misrepresent the quantity or the quality of the products to be sold or distributed through the business opportunity;
(4) Misrepresent the training and management assistance available to the business opportunity purchaser;
(5) Misrepresent the amount of profits, net or gross, which the franchisee can expect from the operation of the business opportunity;
(6) Misrepresent, by failure to disclose or otherwise, the termination, transfer or renewal provision of a business opportunity agreement;
(7) Falsely claim or imply that a primary marketer or trademark of products or services sponsors or participates directly or indirectly in the business opportunity;
(8) Assign a so-called exclusive territory encompassing the same area to more than one business opportunity purchaser;
(9) Provide machines or display of a brand or kind substantially different from and inferior to those promised by the business opportunity seller;
(10) Fail to provide the purchaser a written contract;
(11) Misrepresent the seller's ability or the ability of a person or entity providing services as defined in subdivision (1) of subsection 1 of section 409.1000 to provide locations or assist the purchaser in finding locations expected to have a positive impact on the success of the business opportunity;
(12) Misrepresent a material fact or create a false or misleading impression in the sale of a business opportunity.
2. Any person who violates the provisions of this section is guilty of a class A misdemeanor.
(L. 2000 S.B. 896 § 407.2015)
409.1006. 1. If a business opportunity seller uses untrue or misleading statements in the sale of a business opportunity, fails to give the proper disclosures, or fails to deliver the equipment, supplies or products necessary to begin substantial operation of the business within forty-five days of the delivery date stated in the business opportunity contract, the purchaser may, within one year of the date of the execution of the contract and upon written notice to the seller, rescind the contract and the purchaser shall be entitled to receive from the business opportunity seller all sums paid to the business seller. Upon receipt of such sums, the purchaser shall make available to the seller at the purchaser's address, or at the places at which the purchaser is located at the time notice is given, all products, equipment or supplies received by the purchaser. The purchaser shall not be entitled to unjust enrichment by exercising the remedies provided in this subsection.
2. Any purchaser injured by a violation of sections 409.1000 to 409.1006 or by the business opportunity seller's breach of a contract subject to sections 409.1000 to 409.1006 or any obligation arising therefrom, may bring an action for recovery of damages, including reasonable attorney's fees.
3. Upon complaint of any person that a business opportunity seller has violated the provisions of sections 409.1000 to 409.1006, the circuit court shall have jurisdiction to enjoin the defendant from any further violations.
4. The remedies provided in this section shall be in addition to any other remedies provided by law or in equity.
(L. 2000 S.B. 896 § 407.2021)
409.1-101. Sections 409.1-101 to 409.7-703 may be cited as the "Missouri Securities Act of 2003" and in this chapter as this act.
(L. 2003 H.B. 380)Effective 9-01-03
409.1-102. In this act, unless the context otherwise requires:
(1) "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. But 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.
(2) "Commissioner" means the commissioner of securities appointed by the secretary of state.
(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).
(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, a trust company organized or chartered under the laws of this state, or a savings institution, if its activities as a broker-dealer are limited to those specified in subsections 3(a)(4)(B)(i) to (vi), (viii) to (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) "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:
(i) An insurance company or other organization primarily engaged in the business of insurance;
(ii) A Morris Plan bank; or
(iii) An industrial loan company.
(6) "Federal covered investment adviser" means a person registered under the Investment Advisers Act of 1940.
(7) "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.
(8) "Filing" means the receipt under this act of a record by the commissioner or a designee of the commissioner.
(9) "Fraud", "deceit", and "defraud" are not limited to common law deceit.
(10) "Guaranteed" means guaranteed as to payment of all principal and all interest.
(11) "Institutional investor" means any of the following, whether acting for itself or for others in a fiduciary capacity:
(A) A depository institution, a trust company organized or chartered under the laws of this state, or an 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 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 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, its trustee is a depository institution, and its participants are exclusively plans of the types identified in subparagraph (F) or (G), 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;
(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;
(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;
(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)(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 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.
(12) "Insurance company" means a company organized as an insurance company whose primary business is writing insurance or reinsuring risks underwritten by insurance companies and which is subject to supervision by the insurance commissioner or a similar official or agency of a state.
(13) "Insured" means insured as to payment of all principal and all interest.
(14) "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.
(15) "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 federal covered investment adviser;
(F) A bank, a trust company organized or chartered under the laws of this state, or a savings institution;
(G) Any other person that is excluded by the Investment Advisers Act of 1940 from the definition of investment adviser; or
(H) Any other person excluded by rule adopted or order issued under this act.
(16) "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;
(C) Is employed by or associated with a federal covered investment adviser, unless the individual has a "place of business" in this state as that term is defined by rule adopted under Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-3a) and is:
(i) An "investment adviser representative" as that term is defined by rule adopted under Section 203A of the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-3a); or
(ii) 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)); or
(D) Is excluded by rule adopted or order issued under this act.
(17) "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 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.
(18) "Nonissuer transaction" or "nonissuer distribution" means a transaction or distribution not directly or indirectly for the benefit of the issuer.
(19) "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)).
(20) "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.
(21) "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.
(22) "Predecessor act" means sections 409.101, 409.102 and 409.201 to 409.421, as repealed by this act.
(23) "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.
(24) "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.
(25) "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.
(26) "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.
(27) "Securities and Exchange Commission" means the United States Securities and Exchange Commission.
(28) "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 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; and
(E) May include as an "investment contract", among other contracts, an interest in a limited partnership and a limited liability company and an investment in a viatical settlement or similar agreement.
(29) "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.
(30) "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.
(31) "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.
(L. 2003 H.B. 380)Effective 9-01-03
409.1-103. "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*.
(L. 2003 H.B. 380)Effective 9-01-03
*See § 409.7-701
409.1-104. A reference in this act to an agency or department of the United States is also a reference to a successor agency or department.
(L. 2003 H.B. 380)Effective 9-01-03
409.1-105. 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)).
(L. 2003 H.B. 380)Effective 9-01-03
409.2-201. The following securities are exempt from the requirements of sections 409.3-301 to 409.3-306 and 409.5-504:
(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;
(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); or
(C) Any other depository institution, or any trust company organized or chartered under the laws of this state, unless by rule or order the commissioner proceeds under section 409.2-204;
(4) A security issued by and representing an interest in, or a debt of, or insured or guaranteed by, an insurance company authorized to do business in this state;
(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; 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 an offer or sale, of the underlying security in connection with the offer, sale, or exercise of an option or other security that was exempt when the option or other security was written or issued; or an option or a 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 paragraph (B) the scope of the exemption 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 provide that the exemption becomes effective if the commissioner does not disallow the exemption within the period established by the rule;
(B) To file a request for exemption authorization for which a rule under this act may specify 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 409.6-611, and grounds for denial or suspension of the exemption; or
(C) To register under section 409.3-304;
(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 nonprofit 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)).
(L. 2003 H.B. 380)Effective 9-01-03
409.2-202. The following transactions are exempt from the requirements of sections 409.3-301 to 409.3-306 and 409.5-504:
(1) An isolated nonissuer transaction, whether effected by or through a broker-dealer or not;
(2) A nonissuer transaction by or through a broker-dealer registered, or exempt from registration under this act, 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 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:
(i) A description of the business and operations of the issuer;
(ii) The names of the issuer's executive officers and the names of the issuer's directors, if any;
(iii) An audited balance sheet of the issuer as of a date within eighteen 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
(iv) An audited income statement for each of the issuer's two 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 years; or the issuer of the security has total assets of at least two million dollars based on an audited balance sheet as of a date within eighteen 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 this act 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 this act 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:
(i) A default has not occurred during the current fiscal year or within the three previous fiscal years or during the existence of the issuer and any predecessor if less than three fiscal years, in the payment of principal, interest, or dividends on the security; and
(ii) 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 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 this act effecting an unsolicited order or offer to purchase;
(7) A nonissuer transaction executed by a bona fide pledgee without the purpose of evading this act;
(8) A nonissuer transaction by a federal covered investment adviser with investments under management in excess of one hundred million dollars 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 commissioner 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,