40-303

40-303. Validity of stock certificates or
evidences of indebtedness; violation of law or commission
authorizations; classification

A. All stock and every stock certificate, and every bond, note or other evidence of
indebtedness of a public service corporation, issued without a valid order of the
commission authorizing the issue, or if issued with the authorization of the commission
but not conforming to the order of authorization of the commission, is void, but no
failure in any other respect to comply with the terms or conditions of the order of
authorization of the commission shall make the issue void, except as to a person taking
the issue other than in good faith and for value and without actual notice.

B. Every public service corporation which, directly or indirectly, issues or causes
to be issued any stock or stock certificate, bond, note or other evidence of indebtedness
not in conformity with the order of the commission authorizing the issue, or contrary to
law, or which applies proceeds from the sale thereof, or any part thereof, to any purpose
other than the purpose specified in the commission order, or to any purpose specified in
the order in excess of the amount in the order authorized for such purpose, is subject to
a penalty of not less than five hundred nor more than twenty thousand dollars for each
offense.

C. A person is guilty of a class 4 felony who:

1. Knowingly authorizes, directs, aids in, issues or executes any stock or stock
certificate, bond, note or other evidence of indebtedness not in conformity with the
order of the commission authorizing such, or contrary to law.

2. In any proceeding before the commission knowingly makes any false statement or
representation, or, with knowledge of its falsity, files or causes to be filed with the
commission any false statement or representation, which may tend to influence the
commission to make an order authorizing the issue of any stock or stock certificate,
bond, note or other evidence of indebtedness, or which results in procuring from the
commission the making of any such order.

3. With knowledge that any false statement or representation was made to the
commission in any proceeding tending in any way to influence the commission to make such
order, issues, executes or negotiates, or causes to be issued, executed or negotiated any
stock or stock certificate, bond, note or other evidence of indebtedness.

4. Directly or indirectly, knowingly applies, or causes or assists to be applied
the proceeds or any part thereof, from the sale of any stock or stock certificate, bond,
note or other evidence of indebtedness, to any purpose not specified in the commission
order or to any purpose in excess of the amount authorized for such purpose.

5. With knowledge that any stock or stock certificate, bond, note or other evidence
of indebtedness has been issued or executed in violation of any of the provisions of this
article, negotiates, or causes the same to be negotiated.