PART V.  FRAUD AND
LIABILITIES



 



[§485A-501]  General fraud.  (a)  It
shall be unlawful for a person, in connection with the offer, sale, or purchase
of a security, directly or indirectly:



(1)  To employ a device, scheme, or artifice to
defraud;



(2)  To make an untrue statement of a material fact or
to fail to state a material fact necessary to make the statements made, in
light of the circumstances under which they were made, not misleading;



(3)  To engage in an act, practice, or course of
business that operates or would operate as a fraud or deceit upon another
person;



(4)  To issue, circulate, or publish any prospectus,
circular, advertisement, printed matter, document, pamphlet, leaflet, or other
literature (in this chapter collectively referred to as "advertising
matter"), which contains an untrue statement or a material fact or fails
to state a material fact necessary to make the statements therein made, in
light of the circumstances under which they are made, not misleading;



(5)  To issue, circulate, or publish any advertising
matter or make any written representation, unless the name of the person
issuing, circulating, publishing, or making the same and the fact that the
person is issuing, circulating, or making the same shall be clearly indicated
thereon;



(6)  To make any statement or representation or issue,
circulate, or publish any advertising matter containing any statement, to the
effect that the security has been in any way approved or endorsed by the
commissioner; or



(7)  To issue, circulate, or publish any advertising
matter unless a copy thereof has been previously filed with the office of the
commissioner, or unless the commissioner has by rule adopted or order issued
under this chapter exempted the filing of any advertising material.



(b)  Subsections (a)(5) and (7) shall not apply
to any advertising matter that is covered by section 18(a) of the Securities
Act of 1933 (15 U.S.C. 77), and that relates to or is used in connection with
the offer or sale of a federal covered security. [L 2006, c 229, pt of §1]