As Passed by the Senate

125th General Assembly Regular Session 2003-2004

Am. Sub. H. B. No. 7

Representatives Taylor, Seitz, Harwood, Willamowski, Schlichter, Aslanides, Barrett, Buehrer, Calvert, Carmichael, Cates, Cirelli, Clancy, Core, Daniels, DeBose, DePiero, Distel, Domenick, C. Evans, Flowers, Gibbs, Gilb, Hagan, Hartnett, Hollister, Hoops, Hughes, Kearns, Key, Kilbane, Latta, Mason, McGregor, Miller, Niehaus, Oelslager, Olman, S. Patton, T. Patton, Peterson, Price, Raussen, Reidelbach, Schmidt, Schneider, G. Smith, D. Stewart, J. Stewart, Strahorn, Widener, Widowfield, Wilson, Woodard, Yates 

Senators Goodman, Stivers, Amstutz, Coughlin, Schuler, Schuring 

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A BILL

To amend sections 111.16, 1701.01, 1701.831, 1707.01,

1

1707.02, 1707.08, 1707.09, 1707.11, 1707.16,

2

1707.23, 1707.28, 1707.40, 1707.41, 1707.42,

3

1707.43, 1707.44, and 2913.02 and to enact

4

sections 1707.131 and 1707.261 of the Revised Code

5

to modify the Corporation Law regarding special

6

meetings of shareholders in connection with tender

7

offer, control share acquisition bids; to modify

8

the Securities Law with respect to securities to

9

which it applies, requirements for registration of

10

securities, the designation of the Secretary of

11

State to receive service of process, the

12

application of remedies under the Securities Law,

13

the Attorney General's enforcement authority on

14

behalf of persons injured by a violation, the

15

statutes of limitations governing an action for

16

specified violations, and the prohibitions against

17

certain misleading actions; to increase the

18

criminal penalty for certain theft offenses and

19

create a new criminal aggravated theft offense;

20

and to specify a fee for filing a service of

21

process with the Secretary of State.

22

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 111.16, 1701.01, 1701.831, 1707.01,	23
1707.02, 1707.08, 1707.09, 1707.11, 1707.16, 1707.23, 1707.28,	24
1707.40, 1707.41, 1707.42, 1707.43, 1707.44, and 2913.02 be	25
amended and sections 1707.131 and 1707.261 of the Revised Code be	26
enacted to read as follows:	27

Sec. 111.16.  The secretary of state shall charge and	28
collect, for the benefit of the state, the following fees:	29

(A) For filing and recording articles of incorporation of a	30
domestic corporation, including designation of agent:	31

(1) Wherein the corporation shall not be authorized to issue	32
any shares of capital stock, one hundred twenty-five dollars;	33

(2) Wherein the corporation shall be authorized to issue	34
shares of capital stock, with or without par value:	35

(a) Ten cents for each share authorized up to and including	36
one thousand shares;	37

(b) Five cents for each share authorized in excess of one	38
thousand shares up to and including ten thousand shares;	39

(c) Two cents for each share authorized in excess of ten	40
thousand shares up to and including fifty thousand shares;	41

(d) One cent for each share authorized in excess of fifty	42
thousand shares up to and including one hundred thousand shares;	43

(e) One-half cent for each share authorized in excess of one	44
hundred thousand shares up to and including five hundred thousand	45
shares;	46

(f) One-quarter cent for each share authorized in excess of	47
five hundred thousand shares; provided no fee shall be less than	48
one hundred twenty-five dollars or greater than one hundred	49
thousand dollars.	50

(B) For filing and recording a certificate of amendment to or	51
amended articles of incorporation of a domestic corporation, or	52
for filing and recording a certificate of reorganization, a	53
certificate of dissolution, or an amendment to a foreign license	54
application:	55

(1) If the domestic corporation is not authorized to issue	56
any shares of capital stock, fifty dollars;	57

(2) If the domestic corporation is authorized to issue shares	58
of capital stock, fifty dollars, and in case of any increase in	59
the number of shares authorized to be issued, a further sum	60
computed in accordance with the schedule set forth in division	61
(A)(2) of this section less a credit computed in the same manner	62
for the number of shares previously authorized to be issued by the	63
corporation; provided no fee under division (B)(2) of this section	64
shall be greater than one hundred thousand dollars;	65

(3) If the foreign corporation is not authorized to issue any	66
shares of capital stock, fifty dollars;	67

(4) If the foreign corporation is authorized to issue shares	68
of capital stock, fifty dollars.	69

(C) For filing and recording articles of incorporation of a	70
savings and loan association, one hundred twenty-five dollars; and	71
for filing and recording a certificate of amendment to or amended	72
articles of incorporation of a savings and loan association, fifty	73
dollars;	74

(D) For filing and recording a certificate of merger or	75
consolidation, one hundred twenty-five dollars and, in the case of	76
any new corporation resulting from a consolidation or any	77
surviving corporation that has an increased number of shares	78
authorized to be issued resulting from a merger, an additional sum	79
computed in accordance with the schedule set forth in division	80
(A)(2) of this section less a credit computed in the same manner	81
for the number of shares previously authorized to be issued or	82
represented in this state by each of the corporations for which a	83
consolidation or merger is effected by the certificate;	84

(E) For filing and recording articles of incorporation of a	85
credit union or the American credit union guaranty association,	86
one hundred twenty-five dollars, and for filing and recording a	87
certificate of increase in capital stock or any other amendment of	88
the articles of incorporation of a credit union or the	89
association, fifty dollars;	90

(F) For filing and recording articles of organization of a	91
limited liability company, for filing and recording an application	92
to become a registered foreign limited liability company, for	93
filing and recording a registration application to become a	94
domestic limited liability partnership, or for filing and	95
recording an application to become a registered foreign limited	96
liability partnership, one hundred twenty-five dollars;	97

(G) For filing and recording a certificate of limited	98
partnership or an application for registration as a foreign	99
limited partnership, one hundred twenty-five dollars.	100

(H) For filing a copy of papers evidencing the incorporation	101
of a municipal corporation or of annexation of territory by a	102
municipal corporation, five dollars, to be paid by the municipal	103
corporation, the petitioners therefor, or their agent;	104

(I) For filing and recording any of the following:

105

(1) A license to transact business in this state by a foreign	106
corporation for profit pursuant to section 1703.04 of the Revised	107
Code or a foreign nonprofit corporation pursuant to section	108
1703.27 of the Revised Code, one hundred twenty-five dollars;	109

(2) A biennial report or biennial statement pursuant to	110
section 1775.63 or 1785.06 of the Revised Code, twenty-five	111
dollars;	112

(3) Except as otherwise provided in this section or any other	113
section of the Revised Code, any other certificate or paper that	114
is required to be filed and recorded or is permitted to be filed	115
and recorded by any provision of the Revised Code with the	116
secretary of state, twenty-five dollars.	117

(J) For filing any certificate or paper not required to be	118
recorded, five dollars;	119

(K)(1) For making copies of any certificate or other paper	120
filed in the office of the secretary of state, a fee not to exceed	121
one dollar per page, except as otherwise provided in the Revised	122
Code, and for creating and affixing the seal of the office of the	123
secretary of state to any good standing or other certificate, five	124
dollars. For copies of certificates or papers required by state	125
officers for official purpose, no charge shall be made.	126

(2) For creating and affixing the seal of the office of the	127
secretary of state to the certificates described in division (E)	128
of section 1701.81, division (E) of section 1705.38, division (D)	129
of section 1702.43, division (E) of section 1775.47, or division	130
(E) of section 1782.433 of the Revised Code, twenty-five dollars.	131

(L) For a minister's license to solemnize marriages, ten	132
dollars;	133

(M) For examining documents to be filed at a later date for	134
the purpose of advising as to the acceptability of the proposed	135
filing, fifty dollars;	136

(N) Fifty dollars for filing and recording any of the	137
following:	138

(1) A certificate of dissolution and accompanying documents,	139
or a certificate of cancellation, under section 1701.86, 1702.47,	140
1705.43, or 1782.10 of the Revised Code;	141

(2) A notice of dissolution of a foreign licensed corporation	142
or a certificate of surrender of license by a foreign licensed	143
corporation under section 1703.17 of the Revised Code;	144

(3) The withdrawal of registration of a foreign or domestic	145
limited liability partnership under section 1775.61 or 1775.64 of	146
the Revised Code, or the certificate of cancellation of	147
registration of a foreign limited liability company under section	148
1705.57 of the Revised Code;	149

(4) The filing of a cancellation of disclaimer of general	150
partner status under Chapter 1782. of the Revised Code.	151

(O) For filing a statement of continued existence by a	152
nonprofit corporation, twenty-five dollars;	153

(P) For filing a restatement under section 1705.08 or 1782.09	154
of the Revised Code, an amendment to a certificate of cancellation	155
under section 1782.10 of the Revised Code, an amendment under	156
section 1705.08 or 1782.09 of the Revised Code, or a correction	157
under section 1705.55, 1775.61, 1775.64, or 1782.52 of the Revised	158
Code, fifty dollars;	159

(Q) For filing for reinstatement of an entity cancelled by	160
operation of law, by the secretary of state, by order of the	161
department of taxation, or by order of a court, twenty-five	162
dollars;	163

(R) For filing a change of agent, resignation of agent, or	164
change of agent's address under section 1701.07, 1702.06,	165
1703.041, 1703.27, 1705.06, 1705.55, 1746.04, 1747.03, or 1782.04	166
of the Revised Code, twenty-five dollars;	167

(S) For filing and recording any of the following:

168

(1) An application for the exclusive right to use a name or	169
an application to reserve a name for future use under section	170
1701.05, 1702.05, 1703.31, 1705.05, or 1746.06 of the Revised	171
Code, fifty dollars;	172

(2) A trade name or fictitious name registration or report,	173
fifty dollars;	174

(3) An application to renew any item covered by division	175
(S)(1) or (2) of this section that is permitted to be renewed,	176
twenty-five dollars;	177

(4) An assignment of rights for use of a name covered by	178
division (S)(1), (2), or (3) of this section, the cancellation of	179
a name registration or name reservation that is so covered, or	180
notice of a change of address of the registrant of a name that is	181
so covered, twenty-five dollars.	182

(T) For filing and recording a report to operate a business	183
trust or a real estate investment trust, either foreign or	184
domestic, one hundred twenty-five dollars; and for filing and	185
recording an amendment to a report or associated trust instrument,	186
or a surrender of authority, to operate a business trust or real	187
estate investment trust, fifty dollars;	188

(U)(1) For filing and recording the registration of a	189
trademark, service mark, or mark of ownership, one hundred	190
twenty-five dollars;	191

(2) For filing and recording the change of address of a	192
registrant, the assignment of rights to a registration, a renewal	193
of a registration, or the cancellation of a registration	194
associated with a trademark, service mark, or mark of ownership,	195
twenty-five dollars.	196

(V) For filing a service of process with the secretary of	197
state, five dollars, except as otherwise provided in any section	198
of the Revised Code.	199

Fees specified in this section may be paid by cash, check, or	200
money order, by credit card in accordance with section 113.40 of	201
the Revised Code, or by an alternative payment program in	202
accordance with division (B) of section 111.18 of the Revised	203
Code. Any credit card number or the expiration date of any credit	204
card is not subject to disclosure under Chapter 149. of the	205
Revised Code.	206

Sec. 1701.01.  As used in sections 1701.01 to 1701.98 of the	207
Revised Code, unless the context otherwise requires:	208

(A) "Corporation" or "domestic corporation" means a	209
corporation for profit formed under the laws of this state.	210

(B) "Foreign corporation" means a corporation for profit	211
formed under the laws of another state, and "foreign entity" means	212
an entity formed under the laws of another state.	213

(C) "State" means the United States; any state, territory,	214
insular possession, or other political subdivision of the United	215
States, including the District of Columbia; any foreign country or	216
nation; and any province, territory, or other political	217
subdivision of such foreign country or nation.	218

(D) "Articles" includes original articles of incorporation,	219
certificates of reorganization, amended articles, and amendments	220
to any of these, and, in the case of a corporation created before	221
September 1, 1851, the special charter and any amendments to it	222
made by special act of the general assembly or pursuant to general	223
law.	224

(E) "Incorporator" means a person who signed the original	225
articles of incorporation.	226

(F) "Shareholder" means a person whose name appears on the	227
books of the corporation as the owner of shares of such	228
corporation. Unless the articles, the regulations, or the contract	229
of subscription otherwise provides, "shareholder" includes a	230
subscriber to shares, whether the subscription is received by the	231
incorporators or pursuant to authorization by the directors, and	232
such shares shall be deemed to be outstanding shares.	233

(G) "Person" includes, without limitation, a natural person,	234
a corporation, whether nonprofit or for profit, a partnership, a	235
limited liability company, an unincorporated society or	236
association, and two or more persons having a joint or common	237
interest.	238

(H) The location of the "principal office" of a corporation	239
is the place named as the principal office in its articles.	240

(I) The "express terms" of shares of a class are the	241
statements expressed in the articles with respect to such shares.	242

(J) Shares of a class are "junior" to shares of another class	243
when any of their dividend or distribution rights are subordinate	244
to, or dependent or contingent upon, any right of, or dividend on,	245
or distribution to, shares of such other class.	246

(K) "Treasury shares" means shares belonging to the	247
corporation and not retired that have been either issued and	248
thereafter acquired by the corporation or paid as a dividend or	249
distribution in shares of the corporation on treasury shares of	250
the same class; such shares shall be deemed to be issued, but they	251
shall not be considered as an asset or a liability of the	252
corporation, or as outstanding for dividend or distribution,	253
quorum, voting, or other purposes, except, when authorized by the	254
directors, for dividends or distributions in authorized but	255
unissued shares of the corporation of the same class.	256

(L) To "retire" a share means to restore it to the status of	257
an authorized but unissued share.	258

(M) "Redemption price of shares" means the amount required by	259
the articles to be paid on redemption of shares.	260

(N) "Liquidation price" means the amount or portion of assets	261
required by the articles to be distributed to the holders of	262
shares of any class upon dissolution, liquidation, merger, or	263
consolidation of the corporation, or upon sale of all or	264
substantially all of its assets.	265

(O) "Insolvent" means that the corporation is unable to pay	266
its obligations as they become due in the usual course of its	267
affairs.	268

(P) "Parent corporation" or "parent" means a domestic or	269
foreign corporation that owns and holds of record shares of	270
another corporation, domestic or foreign, entitling the holder of	271
the shares at the time to exercise a majority of the voting power	272
in the election of the directors of the other corporation without	273
regard to voting power that may thereafter exist upon a default,	274
failure, or other contingency; "subsidiary corporation" or	275
"subsidiary" means a domestic or foreign corporation of which	276
another corporation, domestic or foreign, is the parent.	277

(Q) "Combination" means a transaction, other than a merger or	278
consolidation, wherein either of the following applies:	279

(1) Voting shares of a domestic corporation are issued or	280
transferred in consideration in whole or in part for the transfer	281
to itself or to one or more of its subsidiaries, domestic or	282
foreign, of all or substantially all the assets of one or more	283
corporations, domestic or foreign, with or without good will or	284
the assumption of liabilities;	285

(2) Voting shares of a foreign parent corporation are issued	286
or transferred in consideration in whole or in part for the	287
transfer of such assets to one or more of its domestic	288
subsidiaries.	289

"Transferee corporation" in a combination means the	290
corporation, domestic or foreign, to which the assets are	291
transferred, and "transferor corporation" in a combination means	292
the corporation, domestic or foreign, transferring such assets and	293
to which, or to the shareholders of which, the voting shares of	294
the domestic or foreign corporation are issued or transferred.	295

(R) "Majority share acquisition" means the acquisition of	296
shares of a corporation, domestic or foreign, entitling the holder	297
of the shares to exercise a majority of the voting power in the	298
election of directors of such corporation without regard to voting	299
power that may thereafter exist upon a default, failure, or other	300
contingency, by either of the following:	301

(1) A domestic corporation in consideration in whole or in	302
part, for the issuance or transfer of its voting shares;	303

(2) A domestic or foreign subsidiary in consideration in	304
whole or in part for the issuance or transfer of voting shares of	305
its domestic parent.	306

(S) "Acquiring corporation" in a combination means the	307
domestic corporation whose voting shares are issued or transferred	308
by it or its subsidiary or subsidiaries to the transferor	309
corporation or corporations or the shareholders of the transferor	310
corporation or corporations; and "acquiring corporation" in a	311
majority share acquisition means the domestic corporation whose	312
voting shares are issued or transferred by it or its subsidiary in	313
consideration for shares of a domestic or foreign corporation	314
entitling the holder of the shares to exercise a majority of the	315
voting power in the election of directors of such corporation.	316

(T) When used in connection with a combination or a majority	317
share acquisition, "voting shares" means shares of a corporation,	318
domestic or foreign, entitling the holder of the shares to vote at	319
the time in the election of directors of such corporation without	320
regard to voting power which may thereafter exist upon a default,	321
failure, or other contingency.	322

(U) "An emergency" exists when the governor, or any other	323
person lawfully exercising the power and discharging the duties of	324
the office of governor, proclaims that an attack on the United	325
States or any nuclear, atomic, or other disaster has caused an	326
emergency for corporations, and such an emergency shall continue	327
until terminated by proclamation of the governor or any other	328
person lawfully exercising the powers and discharging the duties	329
of the office of governor.	330

(V) "Constituent corporation" means an existing corporation	331
merging into or into which is being merged one or more other	332
entities in a merger or an existing corporation being consolidated	333
with one or more other entities into a new entity in a	334
consolidation, whether any of the entities is domestic or foreign,	335
and "constituent entity" means any entity merging into or into	336
which is being merged one or more other entities in a merger, or	337
an existing entity being consolidated with one or more other	338
entities into a new entity in a consolidation, whether any of the	339
entities is domestic or foreign.	340

(W) "Surviving corporation" means the constituent domestic or	341
foreign corporation that is specified as the corporation into	342
which one or more other constituent entities are to be or have	343
been merged, and "surviving entity" means the constituent domestic	344
or foreign entity that is specified as the entity into which one	345
or more other constituent entities are to be or have been merged.	346

(X) "Close corporation agreement" means an agreement that	347
satisfies the three requirements of division (A) of section	348
1701.591 of the Revised Code.	349

(Y) "Issuing public corporation" means a domestic corporation	350
with fifty or more shareholders that has its principal place of	351
business, its principal executive offices, assets having	352
substantial value, or a substantial percentage of its assets	353
within this state, and as to which no valid close corporation	354
agreement exists under division (H) of section 1701.591 of the	355
Revised Code.	356

(Z)(1) "Control share acquisition" means the acquisition,	357
directly or indirectly, by any person of shares of an issuing	358
public corporation that, when added to all other shares of the	359
issuing public corporation in respect of which such person may	360
exercise or direct the exercise of voting power as provided in	361
this division, would entitle such person, immediately after such	362
acquisition, directly or indirectly, alone or with others, to	363
exercise or direct the exercise of the voting power of the issuing	364
public corporation in the election of directors within any of the	365
following ranges of such voting power:	366

(a) One-fifth or more but less than one-third of such voting	367
power;	368

(b) One-third or more but less than a majority of such voting	369
power;	370

(c) A majority or more of such voting power.

371

A bank, broker, nominee, trustee, or other person who	372
acquires shares in the ordinary course of business for the benefit	373
of others in good faith and not for the purpose of circumventing	374
section 1701.831 of the Revised Code shall, however, be deemed to	375
have voting power only of shares in respect of which such person	376
would be able, without further instructions from others, to	377
exercise or direct the exercise of votes on a proposed control	378
share acquisition at a meeting of shareholders called under	379
section 1701.831 of the Revised Code.	380

(2) The acquisition by any person of any shares of an issuing	381
public corporation does not constitute a control share acquisition	382
for the purpose of section 1701.831 of the Revised Code if the	383
acquisition was or is consummated in, results from, or is the	384
consequence of any of the following circumstances:	385

(a) Prior to November 19, 1982;

386

(b) Pursuant to a contract existing prior to November 19,	387
1982;	388

(c) By bequest or inheritance, by operation of law upon the	389
death of an individual, or by any other transfer without valuable	390
consideration, including a gift, that is made in good faith and	391
not for the purpose of circumventing section 1701.831 of the	392
Revised Code;	393

(d) Pursuant to the satisfaction of a pledge or other	394
security interest created in good faith and not for the purpose of	395
circumventing section 1701.831 of the Revised Code;	396

(e) Pursuant to a merger or consolidation adopted, or a	397
combination or majority share acquisition authorized, by	398
shareholder vote of the shareholders of the issuing public	399
corporation in compliance with section 1701.78, 1701.781, 1701.79,	400
1701.791, or 1701.83 of the Revised Code provided the issuing	401
public corporation is the surviving or new corporation in the	402
merger or consolidation or is the acquiring corporation in the	403
combination or majority share acquisition;	404

(f) The person's being entitled, immediately thereafter, to	405
exercise or direct the exercise of voting power of the issuing	406
public corporation in the election of directors within the same	407
range theretofore attained by that person either in compliance	408
with the provisions of section 1701.831 of the Revised Code or as	409
a result solely of the issuing public corporation's purchase of	410
shares issued by it.	411

The acquisition by any person of shares of an issuing public	412
corporation in a manner described under division (Z)(2) of this	413
section shall be deemed a control share acquisition authorized	414
pursuant to section 1701.831 of the Revised Code within the range	415
of voting power under division (Z)(1)(a), (b), or (c) of this	416
section that such person is entitled to exercise after such	417
acquisition, provided, in the case of an acquisition in a manner	418
described under division (Z)(2)(c) or (d) of this section, the	419
transferor of shares to such person had previously obtained any	420
authorization of shareholders required under section 1701.831 of	421
the Revised Code in connection with such transferor's acquisition	422
of shares of the issuing public corporation.	423

(3) The acquisition of shares of an issuing public	424
corporation in good faith and not for the purpose of circumventing	425
section 1701.831 of the Revised Code from any person whose control	426
share acquisition previously had been authorized by shareholders	427
in compliance with section 1701.831 of the Revised Code, or from	428
any person whose previous acquisition of shares of an issuing	429
public corporation would have constituted a control share	430
acquisition but for division (Z)(2) or (3) of this section, does	431
not constitute a control share acquisition for the purpose of	432
section 1701.831 of the Revised Code unless such acquisition	433
entitles the person making the acquisition, directly or	434
indirectly, alone or with others, to exercise or direct the	435
exercise of voting power of the corporation in the election of	436
directors in excess of the range of such voting power authorized	437
pursuant to section 1701.831 of the Revised Code, or deemed to be	438
so authorized under division (Z)(2) of this section.	439

(AA) "Acquiring person" means any person who has delivered an	440
acquiring person statement to an issuing public corporation	441
pursuant to section 1701.831 of the Revised Code.	442

(BB) "Acquiring person statement" means a written statement	443
that complies with division (B) of section 1701.831 of the Revised	444
Code.	445

(CC)(1) "Interested shares" means the shares of an issuing	446
public corporation in respect of which any of the following	447
persons may exercise or direct the exercise of the voting power of	448
the corporation in the election of directors:	449

(a) An acquiring person;

450

(b) Any officer of the issuing public corporation elected or	451
appointed by the directors of the issuing public corporation;	452

(c) Any employee of the issuing public corporation who is	453
also a director of such corporation;	454

(d) Any person that acquires such shares for valuable	455
consideration during the period beginning with the date of the	456
first public disclosure of a proposedproposal for, or expression	457
of interest in, a control share acquisition of the issuing public	458
corporation or any proposed merger, consolidation, or other	459
transaction that would result in a change in control of the	460
corporation or all or substantially all of its assets; a	461
transaction pursuant to section 1701.76, 1701.78, 1701.781,	462
1701.79, 1701.791, 1701.83, or 1701.86 of the Revised Code that	463
involves the issuing public corporation or its assets; or any	464
action that would directly or indirectly result in a change in	465
control of the issuing public corporation or its assets, and	466
ending on the record date established by the directors pursuant to	467
section 1701.45 and division (D) of section 1701.831 of the	468
Revised Code, if either of the following applies:	469

(i) The aggregate consideration paid or given by the person	470
who acquired the shares, and any other persons acting in concert	471
with the person, for all such shares exceeds two hundred fifty	472
thousand dollars;	473

(ii) The number of shares acquired by the person who acquired	474
the shares, and any other persons acting in concert with the	475
person, exceeds one-half of one per cent of the outstanding shares	476
of the corporation entitled to vote in the election of directors.	477

(e) Any person that transfers such shares for valuable	478
consideration after the record date described in division	479
(CC)(1)(d) of this section as to shares so transferred, if	480
accompanied by the voting power in the form of a blank proxy, an	481
agreement to vote as instructed by the transferee, or otherwise.	482

(2) If any part of this division is held to be illegal or	483
invalid in application, the illegality or invalidity does not	484
affect any legal and valid application thereof or any other	485
provision or application of this division or section 1701.831 of	486
the Revised Code that can be given effect without the invalid or	487
illegal provision, and the parts and applications of this division	488
are severable.	489

(DD) "Certificated security" and "uncertificated security"	490
have the same meanings as in section 1308.01 of the Revised Code.	491

(EE) "Entity" means any of the following:

492

(1) A for profit corporation existing under the laws of this	493
state or any other state;	494

(2) Any of the following organizations existing under the	495
laws of this state, the United States, or any other state:	496

(a) A business trust or association;

497

(b) A real estate investment trust;

498

(c) A common law trust;

499

(d) An unincorporated business or for profit organization,	500
including a general or limited partnership;	501

(e) A limited liability company;

502

(f) A nonprofit corporation.

503

Sec. 1701.831.  (A) Unless the articles or the regulations of	504
the issuing public corporation provide that this section does not	505
apply to control share acquisitions of shares of such corporation,	506
any control share acquisition of an issuing public corporation	507
shall be made only with the prior authorization of the	508
shareholders of such corporation in accordance with this section.	509

(B) Any person who proposes to make a control share	510
acquisition shall deliver an acquiring person statement to the	511
issuing public corporation at the issuing public corporation's	512
principal executive offices. Such acquiring person statement shall	513
set forth all of the following:	514

(1) The identity of the acquiring person;

515

(2) A statement that the acquiring person statement is given	516
pursuant to this section;	517

(3) The number of shares of the issuing public corporation	518
owned, directly or indirectly, by the acquiring person;	519

(4) The range of voting power, described in division	520
(Z)(1)(a), (b), or (c) of section 1701.01 of the Revised Code,	521
under which the proposed control share acquisition would, if	522
consummated, fall;	523

(5) A description in reasonable detail of the terms of the	524
proposed control share acquisition;	525

(6) Representations of the acquiring person, together with a	526
statement in reasonable detail of the facts upon which they are	527
based, that the proposed control share acquisition, if	528
consummated, will not be contrary to law, and that the acquiring	529
person has the financial capacity to make the proposed control	530
share acquisition.	531

(C)(1) Within ten days after receipt of an acquiring person	532
statement that complies with division (B) of this section, the	533
directors of the issuing public corporation shall call a special	534
meeting of shareholders of the issuing public corporation for the	535
purpose of voting on the proposed control share acquisition.	536
UnlessSubject to division (C)(2) of this section, unless the	537
acquiring person agreesand the issuing public corporation agree	538
in writing to another date, such special meeting of shareholders	539
shall be held within fifty days after receipt by the issuing	540
public corporation of the acquiring person statement. If the	541
acquiring person so requests in writing at the time of delivery of	542
the acquiring person statement, such special meetings shall be	543
held no sooner than thirty days after receipt by the issuing	544
public corporation of the acquiring person statement. SuchSubject	545
to division (C)(2) of this section, such special meeting of	546
shareholders shall be held no later than any other special meeting	547
of shareholders that is called, after receipt by the issuing	548
public corporation of the acquiring person statement, in	549
compliance with this section or section 1701.76, 1701.78,	550
1701.781, 1701.79, 1701.791, 1701.801, or 1701.83, or 1701.831 of	551
the Revised Code.	552

(2) If, in connection with a proposed control share	553
acquisition, the acquiring person changes the percentage of the	554
class of shares being sought, the consideration offered, or the	555
security dealer's soliciting fee; extends the expiration date of a	556
tender offer for the shares being sought; or otherwise changes the	557
terms of the proposed control share acquisition, then the	558
directors of the issuing public corporation may reschedule the	559
special meeting of shareholders required by division (C)(1) of	560
this section. If the proposed control share acquisition is to be	561
made pursuant to a tender offer, then the meeting may be	562
rescheduled to a date that is not later than the expiration date	563
of the offer. If the proposed control share acquisition is to be	564
made other than pursuant to a tender offer, the meeting may be	565
rescheduled to a date that is not later than ten business days	566
after notice of the change is first given to the shareholders.	567

(D) Notice of the special meeting of shareholders shall be	568
given as promptly as reasonably practicable by the issuing public	569
corporation to all shareholders of record as of the record date	570
set for such meeting, whether or not entitled to vote thereatat	571
the meeting. SuchThe notice shall include or be accompanied by	572
both of the following:	573

(1) A copy of the acquiring person statement delivered to the	574
issuing public corporation pursuant to this section;	575

(2) A statement by the issuing public corporation, authorized	576
by its directors, of its position or recommendation, or that it is	577
taking no position or making no recommendation, with respect to	578
the proposed control share acquisition.	579

(E) The acquiring person may make the proposed control share	580
acquisition if both of the following occur:	581

(1) The shareholders of the issuing public corporation who	582
hold shares as of the record date of such corporation entitling	583
them to vote in the election of directors authorize the	584
acquisition at the special meeting held for that purpose at which	585
a quorum is present by an affirmative vote of a majority of the	586
voting power of such corporation in the election of directors	587
represented at the meeting in person or by proxy, and a majority	588
of the portion of the voting power excluding the voting power of	589
interested shares represented at the meeting in person or by	590
proxy. A quorum shall be deemed to be present at the special	591
meeting if at least a majority of the voting power of the issuing	592
public corporation in the election of directors is represented at	593
the meeting in person or by proxy.	594

(2) The acquisition is consummated, in accordance with the	595
terms so authorized, no later than three hundred sixty days	596
following shareholder authorization of the control share	597
acquisition.	598

(F) Except as expressly provided in this section, nothing in	599
this section shall be construed to affect or impair any right,	600
remedy, obligation, duty, power, or authority of any acquiring	601
person, any issuing public corporation, the directors of any	602
acquiring person or issuing public corporation, or any other	603
person under the laws of this or any other state or of the United	604
States.	605

(G) If any application of any provision of this section is	606
for any reason held to be illegal or invalid, the illegality or	607
invalidity shall not affect any legal and valid provision or	608
application of this section, and the parts and applications of	609
this section are severable.	610

Sec. 1707.01.  As used in this chapter:

611

(A) Whenever the context requires it, "division" or "division	612
of securities" may be read as "director of commerce" or as	613
"commissioner of securities."	614

(B) "Security" means any certificate or instrument, or any	615
oral, written, or electronic agreement, understanding, or	616
opportunity, that represents title to or interest in, or is	617
secured by any lien or charge upon, the capital, assets, profits,	618
property, or credit of any person or of any public or governmental	619
body, subdivision, or agency. It includes shares of stock,	620
certificates for shares of stock, an uncertificated security,	621
membership interests in limited liability companies, voting-trust	622
certificates, warrants and options to purchase securities,	623
subscription rights, interim receipts, interim certificates,	624
promissory notes, all forms of commercial paper, evidences of	625
indebtedness, bonds, debentures, land trust certificates, fee	626
certificates, leasehold certificates, syndicate certificates,	627
endowment certificates, certificates or written instruments	628
interests in or under profit-sharing or participation agreements	629
or, interests in or under oil, gas, or mining leases, or	630
certificates or written instruments of any interest in or under	631
the same, receipts evidencing preorganization or reorganization	632
subscriptions, preorganization certificates, reorganization	633
certificates, certificates evidencing an interestinterests in any	634
trust or pretended trust, any investment contract, any life	635
settlement interest, any instrument evidencing a promise or an	636
agreement to pay money, warehouse receipts for intoxicating	637
liquor, and the currency of any government other than those of the	638
United States and Canada, but sections 1707.01 to 1707.45 of the	639
Revised Code do not apply to the sale of real estate.	640

(C)(1) "Sale" has the full meaning of "sale" as applied by or	641
accepted in courts of law or equity, and includes every	642
disposition, or attempt to dispose, of a security or of an	643
interest in a security. "Sale" also includes a contract to sell,	644
an exchange, an attempt to sell, an option of sale, a solicitation	645
of a sale, a solicitation of an offer to buy, a subscription, or	646
an offer to sell, directly or indirectly, by agent, circular,	647
pamphlet, advertisement, or otherwise.	648

(2) "Sell" means any act by which a sale is made.

649

(3) The use of advertisements, circulars, or pamphlets in	650
connection with the sale of securities in this state exclusively	651
to the purchasers specified in division (D) of section 1707.03 of	652
the Revised Code is not a sale when the advertisements, circulars,	653
and pamphlets describing and offering those securities bear a	654
readily legible legend in substance as follows: "This offer is	655
made on behalf of dealers licensed under sections 1707.01 to	656
1707.45 of the Revised Code, and is confined in this state	657
exclusively to institutional investors and licensed dealers."	658

(4) The offering of securities by any person in conjunction	659
with a licensed dealer by use of advertisement, circular, or	660
pamphlet is not a sale if that person does not otherwise attempt	661
to sell securities in this state.	662

(5) Any security given with, or as a bonus on account of, any	663
purchase of securities is conclusively presumed to constitute a	664
part of the subject of that purchase and has been "sold."	665

(6) "Sale" by an owner, pledgee, or mortgagee, or by a person	666
acting in a representative capacity, includes sale on behalf of	667
such party by an agent, including a licensed dealer or	668
salesperson.	669

(D) "Person," except as otherwise provided in this chapter,	670
means a natural person, firm, partnership, limited partnership,	671
partnership association, syndicate, joint-stock company,	672
unincorporated association, trust or trustee except where the	673
trust was created or the trustee designated by law or judicial	674
authority or by a will, and a corporation or limited liability	675
company organized under the laws of any state, any foreign	676
government, or any political subdivision of a state or foreign	677
government.	678

(E)(1) "Dealer," except as otherwise provided in this	679
chapter, means every person, other than a salesperson, who engages	680
or professes to engage, in this state, for either all or part of	681
the person's time, directly or indirectly, either in the business	682
of the sale of securities for the person's own account, or in the	683
business of the purchase or sale of securities for the account of	684
others in the reasonable expectation of receiving a commission,	685
fee, or other remuneration as a result of engaging in the purchase	686
and sale of securities. "Dealer" does not mean any of the	687
following:	688

(a) Any issuer, including any officer, director, employee, or	689
trustee of, or member or manager of, or partner in, or any general	690
partner of, any issuer, that sells, offers for sale, or does any	691
act in furtherance of the sale of a security that represents an	692
economic interest in that issuer, provided no commission, fee, or	693
other similar remuneration is paid to or received by the issuer	694
for the sale;	695

(b) Any licensed attorney, public accountant, or firm of such	696
attorneys or accountants, whose activities are incidental to the	697
practice of the attorney's, accountant's, or firm's profession;	698

(c) Any person that, for the account of others, engages in	699
the purchase or sale of securities that are issued and outstanding	700
before such purchase and sale, if a majority or more of the equity	701
interest of an issuer is sold in that transaction, and if, in the	702
case of a corporation, the securities sold in that transaction	703
represent a majority or more of the voting power of the	704
corporation in the election of directors;	705

(d) Any person that brings an issuer together with a	706
potential investor and whose compensation is not directly or	707
indirectly based on the sale of any securities by the issuer to	708
the investor;	709

(e) Any bank;

710

(f) Any person that the division of securities by rule	711
exempts from the definition of "dealer" under division (E)(1) of	712
this section.	713

(2) "Licensed dealer" means a dealer licensed under this	714
chapter.	715

(F)(1) "Salesman" or "salesperson" means every natural	716
person, other than a dealer, who is employed, authorized, or	717
appointed by a dealer to sell securities within this state.	718

(2) The general partners of a partnership, and the executive	719
officers of a corporation or unincorporated association, licensed	720
as a dealer are not salespersons within the meaning of this	721
definition, nor are such clerical or other employees of an issuer	722
or dealer as are employed for work to which the sale of securities	723
is secondary and incidental; but the division of securities may	724
require a license from any such partner, executive officer, or	725
employee if it determines that protection of the public	726
necessitates the licensing.	727

(3) "Licensed salesperson" means a salesperson licensed under	728
this chapter.	729

(G) "Issuer" means every person who has issued, proposes to	730
issue, or issues any security.	731

(H) "Director" means each director or trustee of a	732
corporation, each trustee of a trust, each general partner of a	733
partnership, except a partnership association, each manager of a	734
partnership association, and any person vested with managerial or	735
directory power over an issuer not having a board of directors or	736
trustees.	737

(I) "Incorporator" means any incorporator of a corporation	738
and any organizer of, or any person participating, other than in a	739
representative or professional capacity, in the organization of an	740
unincorporated issuer.	741

(J) "Fraud," "fraudulent," "fraudulent acts," "fraudulent	742
practices," or "fraudulent transactions" means anything recognized	743
on or after July 22, 1929, as such in courts of law or equity; any	744
device, scheme, or artifice to defraud or to obtain money or	745
property by means of any false pretense, representation, or	746
promise; any fictitious or pretended purchase or sale of	747
securities; and any act, practice, transaction, or course of	748
business relating to the purchase or sale of securities that is	749
fraudulent or that has operated or would operate as a fraud upon	750
the seller or purchaser.	751

(K) Except as otherwise specifically provided, whenever any	752
classification or computation is based upon "par value," as	753
applied to securities without par value, the average of the	754
aggregate consideration received or to be received by the issuer	755
for each class of those securities shall be used as the basis for	756
that classification or computation.	757

(L)(1) "Intangible property" means patents, copyrights,	758
secret processes, formulas, services, good will, promotion and	759
organization fees and expenses, trademarks, trade brands, trade	760
names, licenses, franchises, any other assets treated as	761
intangible according to generally accepted accounting principles,	762
and securities, accounts receivable, or contract rights having no	763
readily determinable value.	764

(2) "Tangible property" means all property other than	765
intangible property and includes securities, accounts receivable,	766
and contract rights, when the securities, accounts receivable, or	767
contract rights have a readily determinable value.	768

(M) "Public utilities" means those utilities defined in	769
sections 4905.02, 4905.03, 4907.02, and 4907.03 of the Revised	770
Code; in the case of a foreign corporation, it means those	771
utilities defined as public utilities by the laws of its domicile;	772
and in the case of any other foreign issuer, it means those	773
utilities defined as public utilities by the laws of the situs of	774
its principal place of business. The term always includes	775
railroads whether or not they are so defined as public utilities.	776

(N) "State" means any state of the United States, any	777
territory or possession of the United States, the District of	778
Columbia, and any province of Canada.	779

(O) "Bank" means any bank, trust company, savings and loan	780
association, savings bank, or credit union that is incorporated or	781
organized under the laws of the United States, any state of the	782
United States, Canada, or any province of Canada and that is	783
subject to regulation or supervision by that country, state, or	784
province.	785

(P) "Include," when used in a definition, does not exclude	786
other things or persons otherwise within the meaning of the term	787
defined.	788

(Q)(1) "Registration by description" means that the	789
requirements of section 1707.08 of the Revised Code have been	790
complied with.	791

(2) "Registration by qualification" means that the	792
requirements of sections 1707.09 and 1707.11 of the Revised Code	793
have been complied with.	794

(3) "Registration by coordination" means that there has been	795
compliance with section 1707.091 of the Revised Code. Reference in	796
this chapter to registration by qualification also shall be deemed	797
to include registration by coordination unless the context	798
otherwise indicates.	799

(R) "Intoxicating liquor" includes all liquids and compounds	800
that contain more than three and two-tenths per cent of alcohol by	801
weight and are fit for use for beverage purposes.	802

(S) "Institutional investor" means any corporation, bank,	803
insurance company, pension fund or pension fund trust, employees'	804
profit-sharing fund or employees' profit-sharing trust, any	805
association engaged, as a substantial part of its business or	806
operations, in purchasing or holding securities, or any trust in	807
respect of which a bank is trustee or cotrustee. "Institutional	808
investor" does not include any business entity formed for the	809
primary purpose of evading sections 1707.01 to 1707.45 of the	810
Revised Code.	811

(T) "Securities Act of 1933," 48 Stat. 74, 15 U.S.C. 77a,	812
"Securities Exchange Act of 1934," 48 Stat. 881, 15 U.S.C. 78a,	813
"Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C. 1,	814
"Investment Advisers Act of 1940," 54 Stat. 847, 15 U.S.C. 80b,	815
and "Investment Company Act of 1940," 54 Stat. 789, 15 U.S.C. 80a	816
mean the federal statutes of those names as amended before or	817
after March 18, 1999.	818

(U) "Securities and exchange commission" means the securities	819
and exchange commission established by the Securities Exchange Act	820
of 1934.	821

(V)(1) "Control bid" means the purchase of or offer to	822
purchase any equity security of a subject company from a resident	823
of this state if either of the following applies:	824

(a) After the purchase of that security, the offeror would be	825
directly or indirectly the beneficial owner of more than ten per	826
cent of any class of the issued and outstanding equity securities	827
of the issuer.	828

(b) The offeror is the subject company, there is a pending	829
control bid by a person other than the issuer, and the number of	830
the issued and outstanding shares of the subject company would be	831
reduced by more than ten per cent.	832

(2) For purposes of division (V)(1) of this section, "control	833
bid" does not include any of the following:	834

(a) A bid made by a dealer for the dealer's own account in	835
the ordinary course of business of buying and selling securities;	836

(b) An offer to acquire any equity security solely in	837
exchange for any other security, or the acquisition of any equity	838
security pursuant to an offer, for the sole account of the	839
offeror, in good faith and not for the purpose of avoiding the	840
provisions of this chapter, and not involving any public offering	841
of the other security within the meaning of Section 4 of Title I	842
of the "Securities Act of 1933," 48 Stat. 77, 15 U.S.C.A. 77d(2),	843
as amended;	844

(c) Any other offer to acquire any equity security, or the	845
acquisition of any equity security pursuant to an offer, for the	846
sole account of the offeror, from not more than fifty persons, in	847
good faith and not for the purpose of avoiding the provisions of	848
this chapter.	849

(W) "Offeror" means a person who makes, or in any way	850
participates or aids in making, a control bid and includes persons	851
acting jointly or in concert, or who intend to exercise jointly or	852
in concert any voting rights attached to the securities for which	853
the control bid is made and also includes any subject company	854
making a control bid for its own securities.	855

(X)(1) "Investment adviser" means any person who, for	856
compensation, engages in the business of advising others, either	857
directly or through publications or writings, as to the value of	858
securities or as to the advisability of investing in, purchasing,	859
or selling securities, or who, for compensation and as a part of	860
regular business, issues or promulgates analyses or reports	861
concerning securities.	862

(2) "Investment adviser" does not mean any of the following:

863

(a) Any attorney, accountant, engineer, or teacher, whose	864
performance of investment advisory services described in division	865
(X)(1) of this section is solely incidental to the practice of the	866
attorney's, accountant's, engineer's, or teacher's profession;	867

(b) A publisher of any bona fide newspaper, news magazine, or	868
business or financial publication of general and regular	869
circulation;	870

(c) A person who acts solely as an investment adviser	871
representative;	872

(d) A bank holding company, as defined in the "Bank Holding	873
Company Act of 1956," 70 Stat. 133, 12 U.S.C. 1841, that is not an	874
investment company;	875

(e) A bank, or any receiver, conservator, or other	876
liquidating agent of a bank;	877

(f) Any licensed dealer or licensed salesperson whose	878
performance of investment advisory services described in division	879
(X)(1) of this section is solely incidental to the conduct of the	880
dealer's or salesperson's business as a licensed dealer or	881
licensed salesperson and who receives no special compensation for	882
the services;	883

(g) Any person, the advice, analyses, or reports of which do	884
not relate to securities other than securities that are direct	885
obligations of, or obligations guaranteed as to principal or	886
interest by, the United States, or securities issued or guaranteed	887
by corporations in which the United States has a direct or	888
indirect interest, and that have been designated by the secretary	889
of the treasury as exempt securities as defined in the "Securities	890
Exchange Act of 1934," 48 Stat. 881, 15 U.S.C. 78c;	891

(h) Any person that is excluded from the definition of	892
investment adviser pursuant to section 202(a)(11)(A) to (E) of the	893
"Investment Advisers Act of 1940," 15 U.S.C. 80b-2(a)(11), or that	894
has received an order from the securities and exchange commission	895
under section 202(a)(11)(F) of the "Investment Advisers Act of	896
1940," 15 U.S.C. 80b-2(a)(11)(F), declaring that the person is not	897
within the intent of section 202(a)(11) of the Investment Advisers	898
Act of 1940.	899

(i) Any other person that the division designates by rule, if	900
the division finds that the designation is necessary or	901
appropriate in the public interest or for the protection of	902
investors or clients and consistent with the purposes fairly	903
intended by the policy and provisions of this chapter.	904

(Y)(1) "Subject company" means an issuer that satisfies both	905
of the following:	906

(a) Its principal place of business or its principal	907
executive office is located in this state, or it owns or controls	908
assets located within this state that have a fair market value of	909
at least one million dollars.	910

(b) More than ten per cent of its beneficial or record equity	911
security holders are resident in this state, more than ten per	912
cent of its equity securities are owned beneficially or of record	913
by residents in this state, or more than one thousand of its	914
beneficial or record equity security holders are resident in this	915
state.	916

(2) The division of securities may adopt rules to establish	917
more specific application of the provisions set forth in division	918
(Y)(1) of this section. Notwithstanding the provisions set forth	919
in division (Y)(1) of this section and any rules adopted under	920
this division, the division, by rule or in an adjudicatory	921
proceeding, may make a determination that an issuer does not	922
constitute a "subject company" under division (Y)(1) of this	923
section if appropriate review of control bids involving the issuer	924
is to be made by any regulatory authority of another jurisdiction.	925

(Z) "Beneficial owner" includes any person who directly or	926
indirectly through any contract, arrangement, understanding, or	927
relationship has or shares, or otherwise has or shares, the power	928
to vote or direct the voting of a security or the power to dispose	929
of, or direct the disposition of, the security. "Beneficial	930
ownership" includes the right, exercisable within sixty days, to	931
acquire any security through the exercise of any option, warrant,	932
or right, the conversion of any convertible security, or	933
otherwise. Any security subject to any such option, warrant,	934
right, or conversion privilege held by any person shall be deemed	935
to be outstanding for the purpose of computing the percentage of	936
outstanding securities of the class owned by that person, but	937
shall not be deemed to be outstanding for the purpose of computing	938
the percentage of the class owned by any other person. A person	939
shall be deemed the beneficial owner of any security beneficially	940
owned by any relative or spouse or relative of the spouse residing	941
in the home of that person, any trust or estate in which that	942
person owns ten per cent or more of the total beneficial interest	943
or serves as trustee or executor, any corporation or entity in	944
which that person owns ten per cent or more of the equity, and any	945
affiliate or associate of that person.	946

(AA) "Offeree" means the beneficial or record owner of any	947
security that an offeror acquires or offers to acquire in	948
connection with a control bid.	949

(BB) "Equity security" means any share or similar security,	950
or any security convertible into any such security, or carrying	951
any warrant or right to subscribe to or purchase any such	952
security, or any such warrant or right, or any other security	953
that, for the protection of security holders, is treated as an	954
equity security pursuant to rules of the division of securities.	955

(CC)(1) "Investment adviser representative" means a	956
supervised person of an investment adviser, provided that the	957
supervised person has more than five clients who are natural	958
persons other than excepted persons defined in division (EE) of	959
this section, and that more than ten per cent of the supervised	960
person's clients are natural persons other than excepted persons	961
defined in division (EE) of this section. "Investment adviser	962
representative" does not mean any of the following:	963

(a) A supervised person that does not on a regular basis	964
solicit, meet with, or otherwise communicate with clients of the	965
investment adviser;	966

(b) A supervised person that provides only investment	967
advisory services described in division (X)(1) of this section by	968
means of written materials or oral statements that do not purport	969
to meet the objectives or needs of specific individuals or	970
accounts;	971

(c) Any other person that the division designates by rule, if	972
the division finds that the designation is necessary or	973
appropriate in the public interest or for the protection of	974
investors or clients and is consistent with the provisions fairly	975
intended by the policy and provisions of this chapter.	976

(2) For the purpose of the calculation of clients in division	977
(CC)(1) of this section, a natural person and the following	978
persons are deemed a single client: Any minor child of the natural	979
person; any relative, spouse, or relative of the spouse of the	980
natural person who has the same principal residence as the natural	981
person; all accounts of which the natural person or the persons	982
referred to in division (CC)(2) of this section are the only	983
primary beneficiaries; and all trusts of which the natural person	984
or persons referred to in division (CC)(2) of this section are the	985
only primary beneficiaries. Persons who are not residents of the	986
United States need not be included in the calculation of clients	987
under division (CC)(1) of this section.	988

(3) If subsequent to March 18, 1999, amendments are enacted	989
or adopted defining "investment adviser representative" for	990
purposes of the Investment Advisers Act of 1940 or additional	991
rules or regulations are promulgated by the securities and	992
exchange commission regarding the definition of "investment	993
adviser representative" for purposes of the Investment Advisers	994
Act of 1940, the division of securities shall, by rule, adopt the	995
substance of the amendments, rules, or regulations, unless the	996
division finds that the amendments, rules, or regulations are not	997
necessary for the protection of investors or in the public	998
interest.	999

(DD) "Supervised person" means a natural person who is any of	1000
the following:	1001

(1) A partner, officer, or director of an investment adviser,	1002
or other person occupying a similar status or performing similar	1003
functions with respect to an investment adviser;	1004

(2) An employee of an investment adviser;

1005

(3) A person who provides investment advisory services	1006
described in division (X)(1) of this section on behalf of the	1007
investment adviser and is subject to the supervision and control	1008
of the investment adviser.	1009

(EE) "Excepted person" means a natural person to whom any of	1010
the following applies:	1011

(1) Immediately after entering into the investment advisory	1012
contract with the investment adviser, the person has at least	1013
seven hundred fifty thousand dollars under the management of the	1014
investment adviser.	1015

(2) The investment adviser reasonably believes either of the	1016
following at the time the investment advisory contract is entered	1017
into with the person:	1018

(a) The person has a net worth, together with assets held	1019
jointly with a spouse, of more than one million five hundred	1020
thousand dollars.	1021

(b) The person is a qualified purchaser as defined in	1022
division (FF) of this section.	1023

(3) Immediately prior to entering into an investment advisory	1024
contract with the investment adviser, the person is either of the	1025
following:	1026

(a) An executive officer, director, trustee, general partner,	1027
or person serving in a similar capacity, of the investment	1028
adviser;	1029

(b) An employee of the investment adviser, other than an	1030
employee performing solely clerical, secretarial, or	1031
administrative functions or duties for the investment adviser,	1032
which employee, in connection with the employee's regular	1033
functions or duties, participates in the investment activities of	1034
the investment adviser, provided that, for at least twelve months,	1035
the employee has been performing such nonclerical, nonsecretarial,	1036
or nonadministrative functions or duties for or on behalf of the	1037
investment adviser or performing substantially similar functions	1038
or duties for or on behalf of another company.	1039

If subsequent to March 18, 1999, amendments are enacted or	1040
adopted defining "excepted person" for purposes of the Investment	1041
Advisers Act of 1940 or additional rules or regulations are	1042
promulgated by the securities and exchange commission regarding	1043
the definition of "excepted person" for purposes of the Investment	1044
Advisers Act of 1940, the division of securities shall, by rule,	1045
adopt the substance of the amendments, rules, or regulations,	1046
unless the division finds that the amendments, rules, or	1047
regulations are not necessary for the protection of investors or	1048
in the public interest.	1049

(FF)(1) "Qualified purchaser" means either of the following:

1050

(a) A natural person who owns not less than five million	1051
dollars in investments as defined by rule by the division of	1052
securities;	1053

(b) A natural person, acting for the person's own account or	1054
accounts of other qualified purchasers, who in the aggregate owns	1055
and invests on a discretionary basis, not less than twenty-five	1056
million dollars in investments as defined by rule by the division	1057
of securities.	1058

(2) If subsequent to March 18, 1999, amendments are enacted	1059
or adopted defining "qualified purchaser" for purposes of the	1060
Investment Advisers Act of 1940 or additional rules or regulations	1061
are promulgated by the securities and exchange commission	1062
regarding the definition of "qualified purchaser" for purposes of	1063
the Investment Advisers Act of 1940, the division of securities	1064
shall, by rule, adopt the amendments, rules, or regulations,	1065
unless the division finds that the amendments, rules, or	1066
regulations are not necessary for the protection of investors or	1067
in the public interest.	1068

(GG)(1) "Purchase" has the full meaning of "purchase" as	1069
applied by or accepted in courts of law or equity and includes	1070
every acquisition of, or attempt to acquire, a security or an	1071
interest in a security. "Purchase" also includes a contract to	1072
purchase, an exchange, an attempt to purchase, an option to	1073
purchase, a solicitation of a purchase, a solicitation of an offer	1074
to sell, a subscription, or an offer to purchase, directly or	1075
indirectly, by agent, circular, pamphlet, advertisement, or	1076
otherwise.	1077

(2) "Purchase" means any act by which a purchase is made.

1078

(3) Any security given with, or as a bonus on account of, any	1079
purchase of securities is conclusively presumed to constitute a	1080
part of the subject of that purchase.	1081

(HH) "Life settlement interest" means the entire interest or	1082
any fractional interest in an insurance policy or certificate of	1083
insurance, or in an insurance benefit under such a policy or	1084
certificate, that is the subject of a life settlement contract.	1085

For purposes of this division, "life settlement contract"	1086
means an agreement for the purchase, sale, assignment, transfer,	1087
devise, or bequest of any portion of the death benefit or	1088
ownership of any life insurance policy or contract, in return for	1089
consideration or any other thing of value that is less than the	1090
expected death benefit of the life insurance policy or contract.	1091
"Life settlement contract" includes a viatical settlement contract	1092
as defined in section 3916.01 of the Revised Code, but does not	1093
include any of the following:	1094

(1) A loan by an insurer under the terms of a life insurance	1095
policy, including, but not limited to, a loan secured by the cash	1096
value of the policy;	1097

(2) An agreement with a bank that takes an assignment of a	1098
life insurance policy as collateral for a loan;	1099

(3) The provision of accelerated benefits as defined in	1100
section 3915.21 of the Revised Code;	1101

(4) Any agreement between an insurer and a reinsurer;

1102

(5) An agreement by an individual to purchase an existing	1103
life insurance policy or contract from the original owner of the	1104
policy or contract, if the individual does not enter into more	1105
than one life settlement contract per calendar year;	1106

(6) The initial purchase of an insurance policy or	1107
certificate of insurance from its owner by a viatical settlement	1108
provider, as defined in section 3916.01 of the Revised Code, that	1109
is licensed under Chapter 3916. of the Revised Code.	1110

Sec. 1707.02.  (A) "Exempt," as used in this section, means	1111
exempt from sections 1707.08 to 1707.11 and 1707.39 of the Revised	1112
Code.	1113

(B)(1) Except as provided in division (B)(2) of this section,	1114
the following securities are exempt, if the issuer or guarantor	1115
has the power of taxation or assessment for the purpose of paying	1116
the obligation represented by the security, or is in specific	1117
terms empowered by the laws of the state of issuance to issue	1118
securities payable as to principal or interest, or as to both, out	1119
of revenues collected or administered by such issuer:	1120

(a) Any security issued or guaranteed by the United States;

1121

(b) Any security issued or guaranteed by, and recognized, at	1122
the time of sale, as its valid obligation by, any foreign	1123
government with which the United States is, at the time of sale,	1124
maintaining diplomatic relations;	1125

(c) Any security issued or guaranteed, and recognized as its	1126
valid obligation, by any political subdivision or any governmental	1127
or other public body, corporation, or agency in or of the United	1128
States, any state, territory, or possession of the United States,	1129
or any foreign government with which the United States is, at the	1130
time of sale, maintaining diplomatic relations.	1131

(2) If a security described in division (B)(1) of this	1132
section is not payable out of the proceeds of a general tax, the	1133
security is exempt only if, at the time of its first sale in this	1134
state, there is no default in the payment of any of the interest	1135
or principal of the security, and there are no adjudications or	1136
pending suits adversely affecting its validity.	1137

(C) Any security issued or guaranteed by and representing an	1138
interest in or an obligation of a state or nationally chartered	1139
bank, savings and loan association, savings bank, or credit union,	1140
or a governmental corporation or agency created by or under the	1141
laws of the United States or of Canada is exempt, if it is under	1142
the supervision of or subject to regulation by the government or	1143
state under whose laws it was organized.	1144

(D) Any interim certificate is exempt, if the securities to	1145
be delivered therefor are themselves exempt, are the subject	1146
matter of an exempt transaction, have been registered by	1147
description or registered by qualification, or are the subject	1148
matter of a transaction which has been registered by description.	1149

(E)(1) A security is exempt if it meets any of the following	1150
requirements:	1151

(a) The security is listed, or authorized for listing, on the	1152
New York stock exchange, the American stock exchange, or the	1153
national market system of the NASDAQ stock market, or any	1154
successor to such entities.	1155

(b) The security is listed, or authorized for listing, on a	1156
national securities exchange or system, or on a tier or segment of	1157
such exchange or system, designated by the securities and exchange	1158
commission in rule 146(b) promulgated under section 18(b)(1) of	1159
the Securities Act of 1933.	1160

(c) The security is listed, or authorized for listing, on a	1161
national securities exchange or system, or on a tier or segment of	1162
such exchange or system, that has listing standards that the	1163
division of securities, on its own initiative or on the basis of	1164
an application, determines by rule are substantially similar to	1165
the listing standards applicable to securities described in	1166
division (E)(1)(a) of this section.	1167

(d) The security is a security of the same issuer that is	1168
equal in seniority or that is a senior security to a security	1169
described in division (E)(1)(a), (b), or (c) of this section.	1170

(2) Application for approval of a stock exchange or system	1171
not approved in this section may be made by any organized stock	1172
exchange or system, or by any dealer who is a member of such	1173
exchange, in such manner and upon such forms as are prescribed by	1174
the division, accompanied by payment of an approval fee of two	1175
hundred dollars, and the division shall make such investigation	1176
and may hold such hearings as it deems necessary to determine the	1177
propriety of giving approval. The cost of such investigation shall	1178
be borne by the applicant. The division may enter an order of	1179
approval, and if it does so, it shall notify the applicant of such	1180
approval.	1181

(3) The division may revoke the approval of an exchange or	1182
system enumerated in division (E)(1) of this section, provided	1183
that the exchange or system is not listed in section 18(b)(1) of	1184
the Securities Act of 1933 or any rule promulgated thereunder. The	1185
division may effect a revocation after due notice, investigation,	1186
a hearing, and a finding that the practices or requirements of	1187
such exchange or system have been so changed or modified, or are,	1188
in their actual operation, such that the contemplated protection	1189
is no longer afforded. The principles of res adjudicata ordinarily	1190
applicable in civil matters shall not be applicable to this	1191
matter, which is hereby declared to be administrative rather than	1192
judicial. Notice of the hearing may be given by certified mail at	1193
least ten days before such hearing.	1194

(4) The division may suspend the exemption of any security	1195
described in division (E)(1) of this section, provided that the	1196
security is listed or authorized for listing on an exchange or	1197
system that is not listed in section 18(b)(1) of the Securities	1198
Act of 1933 or any rule promulgated thereunder. The division may	1199
effect a suspension by giving notice, by certified mail, to that	1200
effect to the exchange or system upon which such security is	1201
listed or designated and to the issuer of such security. After	1202
notice and hearing, the division may revoke such exemption if it	1203
appears to it that sales of such security have been fraudulent or	1204
that future sales of it would be fraudulent. The division shall	1205
set such hearing not later than ten days from the date of the	1206
order of suspension, but may for good cause continue such hearing	1207
upon application of the exchange or system upon which such	1208
security is listed or designated or upon application of the issuer	1209
of such security.	1210

(F) Any security, issued or guaranteed as to principal,	1211
interest, or dividend or distribution by a corporation owning or	1212
operating any public utility, is exempt, if such corporation is,	1213
as to its rates and charges or as to the issuance and guaranteeing	1214
of securities, under the supervision of or regulated by a public	1215
commission, board, or officer of the United States, or of Canada,	1216
or of any state, province, or municipal corporation in either of	1217
such countries. Equipment-trust securities based on chattel	1218
mortgages, leases, or agreements for conditional sale, of cars,	1219
locomotives, motor trucks, or other rolling stock or of motor	1220
vehicles mortgaged, leased, or sold to, or finished for the use	1221
of, a public utility, are exempt; and so are equipment securities	1222
where the ownership or title of such equipment is pledged or	1223
retained, in accordance with the laws of the United States or of	1224
any state, or of Canada or any province thereof, to secure the	1225
payment of such securities.	1226

(G) Commercial paper and promissory notes are exempt when	1227
they are not offered directly or indirectly for sale to the	1228
public.	1229

(H) Any security issued or guaranteed by an insurance	1230
company, except as provided in section 1707.32 of the Revised	1231
Code, is exempt if such company is under the supervision of, and	1232
the issuance or guaranty of such security is regulated by, a	1233
state.	1234

(I) Any security, except notes, bonds, debentures, or other	1235
evidences of indebtedness or of promises or agreements to pay	1236
money, which is issued by a person, corporation, or association	1237
organized not for profit, including persons, corporations, and	1238
associations organized exclusively for conducting county fairs, or	1239
for religious, educational, social, recreational, athletic,	1240
benevolent, fraternal, charitable, or reformatory purposes, and	1241
agricultural cooperatives as defined in section 1729.01 of the	1242
Revised Code, is exempt, if no part of the net earnings of such	1243
issuer inures to the benefit of any shareholder or member of such	1244
issuer or of any individual, and if the total commission,	1245
remuneration, expense, or discount in connection with the sale of	1246
such securities does not exceed two per cent of the total sale	1247
price thereof plus five hundred dollars.	1248

(J)(1) Any securities outstanding for a period of not less	1249
than five years, on which there has occurred no default in payment	1250
of principal, interest, or dividend or distribution for the five	1251
years immediately preceding the sale, are exempt.	1252

(2) For the purpose of division (J) of this section, the	1253
dividend, distribution, or interest rate on securities in which no	1254
such rate is specified shall be at the rate of at least four per	1255
cent annually on the aggregate of the price at which such	1256
securities are to be sold.	1257

(K) All bonds issued under authority of Chapter 165. or 761.,	1258
or section 4582.06 or 4582.31 of the Revised Code are exempt.	1259

Sec. 1707.08. (A) The transactions enumerated in section	1260
1707.06 of the Revised Code may be consummated on compliance with	1261
this section and section 1707.11 of the Revised Code.	1262

(B) A description, verified either by the oath of the person	1263
individual filing it or of any personindividual having knowledge	1264
of the facts, shall be filed with the division of securities by	1265
the issuer, or by a majority of the incorporators of the issuer	1266
prior to election of officers if it is an incorporated issuer, or	1267
by a licensed dealer, which description shall be on forms	1268
prescribed by the division and shall set forth:	1269

(A)(1) The name of the issuer;

1270

(B)(2) A brief description of the securities;

1271

(C)(3) The amount of the securities to be offered after the	1272
filing of the description for sale in this state and, if all the	1273
securities are not to be offered by the person filing the	1274
description, then the respective amounts to be offered by others,	1275
so far as those amounts are known, and the names and addresses of	1276
the other offerors;	1277

(D)(4) A brief statement of the facts which show that the	1278
securities are the subject matter of a transaction enumerated in	1279
section 1707.06 of the Revised Code;	1280

(E)(5) The price at which the securities are to be offered	1281
for sale.	1282

Registration by description is completed when the	1283
description, together with a filing fee of fifty dollars, in the	1284
form of cash, check, or United States postal money order, is	1285
delivered, or mailed by certified mail with postage prepaid, to	1286
the division.	1287

(C) The individual who executes the application for	1288
registration by description on behalf of the applicant shall state	1289
the individual's relationship to the applicant and certify all of	1290
the following:	1291

(1) The individual has executed the application on behalf of	1292
the applicant.	1293

(2) The individual is fully authorized to execute and file	1294
the application on behalf of the applicant.	1295

(3) The individual is familiar with the applicant's	1296
application.	1297

(4) To the best of the individual's knowledge, information,	1298
and belief, the statements made in the application are true, and	1299
the documents submitted with the application are true copies of	1300
the original documents.	1301

(D) A registration by description is effective seven business	1302
days after the division receives the description on applicable	1303
forms, together with a filing fee of fifty dollars, if no	1304
proceeding is pending under section 1707.13 or 1707.131 of the	1305
Revised Code. However, the division may permit an earlier	1306
effective date by rule or by issuing a certificate of	1307
acknowledgment for the registration by description.	1308

(E) In order to correct errors or omissions, a registration	1309
by description may be amended by the person whothat originally	1310
filed it, by the filing, in the same manner as in the case of an	1311
original registration by description, of an amended registration	1312
by description or of an amendment of the original registration by	1313
description.	1314

(F) When transactions in any securities enumerated in section	1315
1707.06 of the Revised Code have been registered and the fees	1316
prescribed by this section have been paid, the transactions may be	1317
consummated so long as the registration remains in full force.	1318

Sec. 1707.09. (A)(1) All securities, except those enumerated	1319
in section 1707.02 of the Revised Code and those that are the	1320
subject matter of a transaction permitted by section 1707.03,	1321
1707.04, or 1707.06 of the Revised Code, shall be qualified in the	1322
manner provided by this section before being sold in this state.	1323

(2) Applications for that qualification, on forms prescribed	1324
by the division of securities, shall be made in writing either by	1325
the issuer of the securities or by any licensed dealer desiring to	1326
sell them within this state and shall be signed by the applicant,	1327
sworn to by any personindividual having knowledge of the facts	1328
stated in the application, and filed in the office of the	1329
division.	1330

(3) The individual who executes the application for	1331
qualification of securities on behalf of the applicant shall state	1332
the individual's relationship to the applicant and certify that:	1333
the individual has executed the application on behalf of the	1334
applicant; the individual is fully authorized to execute and file	1335
the application on behalf of the applicant; the individual is	1336
familiar with the applicant's application; and to the best of the	1337
individual's knowledge, information, and belief, the statements	1338
made in the application are true, and the documents submitted with	1339
the application are true copies of the original documents.	1340

(B) The division shall require the applicant for	1341
qualification of securities to submit to it the following	1342
information:	1343

(A)(1) The names and addresses of the directors or trustees	1344
and of the officers of the issuer, if the issuer is a corporation	1345
or an unincorporated association; of all the members of the	1346
issuer, if the issuer is a limited liability company in which	1347
management is reserved to its members; of all the managers of the	1348
issuer, if the issuer is a limited liability company in which	1349
management is not reserved to its members; of all partners, if the	1350
issuer is a general or limited partnership or a partnership	1351
association; and the name and address of the issuer, if the issuer	1352
is an individual;	1353

(B)(2) The address of the issuer's principal place of	1354
business and principal office in this state, if any;	1355

(C)(3) The purposes and general character of the business	1356
actually being transacted, or to be transacted, by the issuer, and	1357
the purpose of issuing the securities named in the application;	1358

(D)(4) A statement of the capitalization of the issuer; a	1359
balance sheet made up as of the most recent practicable date,	1360
showing the amount and general character of its assets and	1361
liabilities; a description of the security for the qualification	1362
of which application is being made; and copies of all circulars,	1363
prospectuses, advertisements, or other descriptions of the	1364
securities, that are then prepared by or for the issuer, or by or	1365
for the applicant if the applicant is not the issuer, or by or for	1366
both, to be used for distribution or publication in this state;	1367

(E)(5) A statement of the amount of the issuer's income,	1368
expenses, and fixed charges during the last fiscal year or, if the	1369
issuer has been in actual business less than one year, for the	1370
time that the issuer has been in actual business;	1371

(F)(6) A statement showing the price at which the security is	1372
to be offered for sale;	1373

(G)(7) A statement showing the considerations received or to	1374
be received by the issuer of the securities purchased or to be	1375
purchased from the issuer and an itemized statement of all	1376
expenses of financing to be paid from those considerations so as	1377
to show the aggregate net amount actually received or to be	1378
received by the issuer;	1379

(H)(8) All other information, including an opinion of counsel	1380
as to the validity of the securities that are the subject matter	1381
of the application, that the division considers necessary to	1382
enable it to ascertain whether the securities are entitled to	1383
qualification;	1384

(I)(9) If the issuer is a corporation, there shall be filed	1385
with the application a certified copy of its articles of	1386
incorporation with all amendments to the articles, if the articles	1387
or amendments are not already on file in the office of the	1388
secretary of state; if the issuer is a limited liability company,	1389
there shall be filed with the application a certified copy of its	1390
articles of organization with all amendments to the articles, if	1391
the articles or amendments are not already on file in the office	1392
of the secretary of state; if the issuer is a trust or trustee,	1393
there shall be filed with the application a copy of all	1394
instruments by which the trust was created; and if the issuer is a	1395
partnership or an unincorporated association, or any other form of	1396
organization, there shall be filed with the application a copy of	1397
its articles of partnership or association and of all other papers	1398
pertaining to its organization, if the articles or other papers	1399
are not already on file in the office of the secretary of state;	1400

(J)(10) If the application is made with respect to securities	1401
to be sold or distributed by or on behalf of the issuer, or by or	1402
on behalf of an underwriter, as defined in division (N) of section	1403
1707.03 of the Revised Code, a statement showing that the issuer	1404
has received, or will receive at or prior to the delivery of those	1405
securities, not less than eighty-five per cent of the aggregate	1406
price at which all those securities are sold by or on behalf of	1407
the issuer, without deduction for any additional commission,	1408
directly or indirectly, and without liability to pay any	1409
additional sum as commission;	1410

(K)(11) If the division so permits with respect to a	1411
security, an applicant may file with the division, in lieu of the	1412
division's prescribed forms, a copy of the registration statement	1413
relating to the security, with all amendments to that statement,	1414
previously filed with the securities and exchange commission of	1415
the United States under the "Securities Act of 1933," as amended,	1416
together with all additional data, information, and documents that	1417
the division requires.	1418

(C) If the division finds that it is not necessary in the	1419
public interest and for the protection of investors to require all	1420
the information specified in divisions (A) to (J)(B)(1) to (10) of	1421
this section, it may permit the filing of applications for	1422
qualification that contain the information that it considers	1423
necessary and appropriate in the public interest and for the	1424
protection of investors;, but this provision applies only in the	1425
case of applications for qualification of securities previously	1426
issued and outstanding that may not be made the subject matter of	1427
transactions exempt under division (M) of section 1707.03 of the	1428
Revised Code by reason of the fact that those securities within	1429
one year were purchased outside this state or within one year were	1430
transported into this state.	1431

(D) All the statements, exhibits, and documents required by	1432
the division under this section, except properly certified public	1433
documents, shall be verified by the oath of the applicant for	1434
qualification, of the issuer, or of any personindividual having	1435
knowledge of the facts, and in the manner and form that may be	1436
required by the division. Failure or refusal to comply with the	1437
requests of the division shall be sufficient reason for a refusal	1438
by the division to register securities.	1439

(E) If it appears to the division that substantially the only	1440
consideration to be paid for any of the securities to be qualified	1441
is to be intangible property of doubtful value, the division may	1442
require that the securities be delivered in escrow to a bank in	1443
this state under the terms that the division may reasonably	1444
prescribe or require to prevent a deceitful misrepresentation or	1445
sale of the securities,; that the securities be subordinated in	1446
favor of those sold for sound value until they have a value	1447
bearing a reasonable relation to the value of those sold for sound	1448
value,; or that a legend of warning specifying the considerations	1449
paid or to be paid for the securities be stamped or printed on all	1450
advertisements, circulars, pamphlets, or subscription blanks used	1451
in connection with the sale of any securities of the same issuer,;	1452
or it may impose a combination of any two or more of these	1453
requirements.	1454

(F) At the time of filing the information prescribed in this	1455
section, the applicant shall pay to the division a filing fee of	1456
one hundred dollars.	1457

(G)(1) The division, at any time, as a prerequisite to	1458
qualification, may make an examination of the issuer of securities	1459
sought to be qualified. The applicant for qualification of any	1460
securities may be required by the division to advance sufficient	1461
funds to pay all or any part of the actual expenses of that	1462
examination, an itemized statement of which shall be furnished the	1463
applicant. If	1464

(2) If the division finds that the business of the issuer is	1465
not fraudulently conducted, that the proposed offer or disposal of	1466
securities is not on grossly unfair terms, that the plan of	1467
issuance and sale of the securities referred to in the proposed	1468
offer or disposal would not defraud or deceive, or tend to defraud	1469
or deceive, purchasers, and that division (J)(B)(10) of this	1470
section applies and has been complied with, the division shall	1471
notify the applicant of its findings;, and, upon payment of a	1472
registration fee of one-tenth of one per cent of the aggregate	1473
price at which the securities are to be sold to the public in this	1474
state, which fee, however, shall in no case be less than one	1475
hundred or more than one thousand dollars, the division shall	1476
register the qualification of the securities.	1477

(H) An application for qualification of securities may be	1478
amended by the person filing it at any time prior to the	1479
division's action on it either in registering the securities for	1480
qualification or in refusing to do so. Subsequent to any such	1481
action by the division, the person who filed the application may	1482
file with the consent of the division one or more amendments to it	1483
that shall become effective upon the making by the division of the	1484
findings enumerated in the next preceding paragraphdivision (G)	1485
of this section,; the giving of notice of those findings to the	1486
applicant by the division,; and the payment by the applicant of	1487
the additional fee that would have been payable had the	1488
application, as it previously became effective, contained the	1489
amendment.	1490

(I) When any securities have been qualified and the fees for	1491
the qualification have been paid as provided in this section, any	1492
licensed dealer subsequently may sell the securities under the	1493
qualification, so long as the qualification remains in full force,	1494
and any dealer of that nature whothat desires may file with the	1495
division a written notice of intention to sell the securities or	1496
any designated portion of them. For that filing, no fee need be	1497
paid.	1498

Sec. 1707.11.  (A) Each person that is not organized under	1499
the laws of this state, that is not licensed under section 1703.03	1500
of the Revised Code, or that does not have its principal place of	1501
business in this state, shall submit to the division of securities	1502
an irrevocable consent to service of process, as described in	1503
division (B) of this section, in connection with any of the	1504
following:	1505

(1) Filings to claim any of the exemptions enumerated in	1506
division (Q), (W), (X), or (Y) of section 1707.03 of the Revised	1507
Code;	1508

(2) Applications for registration by description,	1509
qualification, or coordination;	1510

(3) Notice filings pursuant to section 1707.092 of the	1511
Revised Code.	1512

(B) The irrevocable written consent shall be executed and	1513
acknowledged by an individual duly authorized to give the consent	1514
and shall do all of the following:	1515

(1) Designate the secretary of state as agent for service of	1516
process or pleadings;	1517

(2) State that actions growing out of the sale of such	1518
securities, the giving of investment advice, or fraud committed by	1519
a person on whose behalf the consent is submitted may be commenced	1520
against the person, in the proper court of any county in this	1521
state in which a cause of action may arise or in which the	1522
plaintiff in the action may reside, by serving on the secretary of	1523
state any proper process or pleading authorized by the laws of	1524
this state;	1525

(3) Stipulate that service of process or pleading on the	1526
secretary of state shall be taken in all courts to be as valid and	1527
binding as if service had been made upon the person on whose	1528
behalf the consent is submitted.	1529

(C) Notwithstanding any application, form, or other material	1530
filed with or submitted to the division that purports to appoint	1531
as agent for service of process a person other than the secretary	1532
of state, the application, form, or other material shall be	1533
considered to appoint the secretary of state as agent for service	1534
of process.	1535

(D) Service of any process or pleadings may be made on the	1536
secretary of state by duplicate copies, of which one shall be	1537
filed in the office of the secretary of state, and the other	1538
immediately forwarded by the secretary of state by certified mail	1539
to the principal place of business of the person on whose behalf	1540
the consent is submitted or to the last known address as shown on	1541
the filing made with the division. However, failure to mail such	1542
copy does not invalidate the service.	1543

(D)(E) Notwithstanding any provision of this chapter, or of	1544
any rule adopted by the division of securities under this chapter,	1545
that requires the submission of a consent to service of process,	1546
the division may provide by rule for the electronic filing or	1547
submission of a consent to service of process.	1548

Sec. 1707.131. (A) For purposes of this section, "five per	1549
cent shareholder" means a beneficial owner of five per cent or	1550
more of the issuer's outstanding securities.	1551

(B) The division of securities shall refuse any registration	1552
by description, by qualification, or by coordination if the issuer	1553
is in the development stage and either has no specific business	1554
plan or purpose or has indicated that its business is to engage in	1555
a merger or acquisition with an unidentified company or companies,	1556
or other entities or persons.	1557

(C) The division may refuse any registration by description,	1558
by qualification, or by coordination if either of the following	1559
applies:	1560

(1) The issuer does not disclose in the final offering	1561
circular, prospectus, or form U-7 of the North American securities	1562
administrators association that any future transaction with an	1563
officer, director, five per cent shareholder, manager, trustee, or	1564
general partner will be on terms no less favorable to the issuer	1565
than could be obtained from an independent third party.	1566

(2) The issuer does not disclose both of the following in the	1567
final offering circular, prospectus, or form U-7 of the North	1568
American securities administrators association:	1569

(a) Any outstanding loan from the issuer to an officer,	1570
director, five per cent shareholder, manager, trustee, or general	1571
partner is required to be repaid within six months of the	1572
offering, except for a loan or extension of credit made by a bank.	1573

(b) Any future loan from the issuer to an officer, director,	1574
five per cent shareholder, manager, trustee, or general partner	1575
will be for a bona fide business purpose and approved by a	1576
majority of the disinterested directors, managers, trustees, or	1577
general partners, or will be a type of transaction involving a	1578
director or executive officer of the issuer that is permitted by	1579
section 13(k) of the "Securities Exchange Act of 1934," 116 Stat.	1580
787, 15 U.S.C.A. 78m, as amended.	1581

Sec. 1707.16.  (A) Every salesperson of securities must be	1582
licensed by the division of securities and shall be employed,	1583
authorized, or appointed only by the licensed dealer specified in	1584
the salesperson's license. If the relationship between the	1585
salesperson severs the connection with that licensedand the	1586
dealer is severed, the salesperson's license isshall be void.	1587

(B) Application for a salesperson's license shall be made in	1588
accordance with this section and by filing with the division the	1589
information, materials, and forms specified in rules adopted by	1590
the division, along with all of the following information:	1591

(1) The name and complete residence and business addresses of	1592
the applicant;	1593

(2) The name of the dealer who is employing the applicant or	1594
who intends to employ the applicant;	1595

(3) The applicant's age and education, and the applicant's	1596
experience in the sale of securities; whether the applicant has	1597
ever been licensed by the division, and if so, when; whether the	1598
applicant has ever been refused a license by the division; and	1599
whether the applicant has ever been licensed or refused a license	1600
or any similar permit by any division or commissioner of	1601
securities, whatsoever name known or designated, anywhere.	1602

(C) The division shall by rule require an applicant to pass	1603
an examination designated by the division.	1604

(D) If the division finds that the applicant is of good	1605
business repute, appears to be qualified to act as a salesperson	1606
of securities, and has fully complied with this chapter, and that	1607
the dealer named in the application is a licensed dealer, the	1608
division shall, upon payment of the fees prescribed by section	1609
1707.17 of the Revised Code, issue a license to the applicant	1610
authorizing the applicant to act as salesperson for the dealer	1611
named in the application.	1612

Sec. 1707.23.  Whenever it appears to the division of	1613
securities, from its files, upon complaint, or otherwise, that any	1614
person has engaged in, is engaged in, or is about to engage in any	1615
practice declared to be illegal or prohibited by this chapter or	1616
rules adopted under this chapter by the division, or defined as	1617
fraudulent in this chapter or rules adopted under this chapter by	1618
the division, or any other deceptive scheme or practice in	1619
connection with the sale of securities, or acting as an investment	1620
adviser or investment adviser representative, or when the division	1621
believes it to be in the best interests of the public and	1622
necessary for the protection of investors, the division may do any	1623
of the following:	1624

(A) Require any person to file with it, on such forms as it	1625
prescribes, an original or additional statement or report in	1626
writing, under oath or otherwise, as to any facts or circumstances	1627
concerning the issuance, sale, or offer for sale of securities	1628
within this state by the person, as to the person's acts or	1629
practices as an investment adviser or investment adviser	1630
representative within this state, and as to other information as	1631
it deems material or relevant thereto;	1632

(B) Examine any investment adviser, investment adviser	1633
representative, or any seller, dealer, salesperson, or issuer of	1634
any securities, and any of their agents, employees, partners,	1635
officers, directors, members, or shareholders, wherever located,	1636
under oath; and examine records, books, documents, accounts, and	1637
papers as the division deems material or relevant to the inquiry;	1638

(C) Require the attendance of witnesses, and the production	1639
of books, records, and papers, as are required either by the	1640
division or by any party to a hearing before the division, and for	1641
that purpose issue a subpoena for any witness, or a subpoena duces	1642
tecum to compel the production of any books, records, or papers.	1643
The subpoena shall be served by personal service or by certified	1644
mail, return receipt requested. If the subpoena is returned	1645
because of inability to deliver, or if no return is received	1646
within thirty days of the date of mailing, the subpoena may be	1647
served by ordinary mail. If no return of ordinary mail is received	1648
within thirty days after the date of mailing, service shall be	1649
deemed to have been made. If the subpoena is returned because of	1650
inability to deliver, the division may designate a person or	1651
persons to effect either personal or residence service upon the	1652
witness. The person designated to effect personal or residence	1653
service under this division may be the sheriff of the county in	1654
which the witness resides or may be found or any other duly	1655
designated person. The fees and mileage of the person serving the	1656
subpoena shall be the same as those allowed by the courts of	1657
common pleas in criminal cases, and shall be paid from the funds	1658
of the division. Fees and mileage for the witness shall be the	1659
same as those allowed for witnesses by the courts of common pleas	1660
in criminal cases, and shall be paid from the funds of the	1661
division upon request of the witness following the hearing.	1662

(D) Proceed under section 1707.19 of the Revised Code to	1663
refuse a license applied for by a dealer, salesperson, investment	1664
adviser, or investment adviser representative or to suspend the	1665
license of any licensed dealer, licensed salesperson, licensed	1666
investment adviser, or licensed investment adviser representative	1667
and ultimately, if the division determines, revoke such license	1668
under that section;	1669

(E) Initiate criminal proceedings under section 1707.042 or	1670
1707.44 of the Revised Code or rules adopted under those sections	1671
by the division by laying before the prosecuting attorney of the	1672
proper county any evidence of criminality which comes to its	1673
knowledge; and in the event of the neglect or refusal of the	1674
prosecuting attorney to prosecute such violations, or at the	1675
request of the prosecuting attorney, the division shall submit the	1676
evidence to the attorney general, who may proceed in the	1677
prosecution with all the rights, privileges, and powers conferred	1678
by law on prosecuting attorneys, including the power to appear	1679
before grand juries and to interrogate witnesses before such grand	1680
juries.	1681

(F) Require any dealers immediately to furnish to the	1682
division copies of prospectuses, circulars, or advertisements	1683
respecting securities that they publish or generally distribute,	1684
or require any investment advisers immediately to furnish to the	1685
division copies of brochures, advertisements, publications,	1686
analyses, reports, or other writings that they publish or	1687
distribute;	1688

(G) Require any dealers to mail to the division, prior to	1689
sale, notices of intention to sell, in respect to all securities	1690
which are not exempt under section 1707.02 of the Revised Code, or	1691
which are sold in transactions not exempt under section 1707.03 or	1692
1707.04 of the Revised Code;	1693

(H) Issue and cause to be served by certified mail upon all	1694
persons affected an order requiring the person or persons to cease	1695
and desist from the acts or practices appearing to the division to	1696
constitute violations of this chapter or rules adopted under this	1697
chapter by the division. The order shall state specifically the	1698
section or sections of this chapter or the rule or rules adopted	1699
under this chapter by the division that appear to the division to	1700
have been violated and the facts constituting the violation. If	1701
after the issuance of the order it appears to the division that	1702
any person or persons affected by the order have engaged in any	1703
act or practice from which the person or persons shall have been	1704
required, by the order, to cease and desist, the director of	1705
commerce may apply to the court of common pleas of any county for,	1706
and upon proof of the validity of the order of the division, the	1707
delivery of the order to the person or persons affected, and of	1708
the illegality and the continuation of the acts or practices that	1709
are the subject of the order, the court may grant an injunction	1710
implementing the order of the division.	1711

(I) Issue and initiate contempt proceedings in this state	1712
regarding subpoenas and subpoenas duces tecum at the request of	1713
the securities administrator of another state, if it appears to	1714
the division that the activities for which the information is	1715
sought would violate this chapter if the activities had occurred	1716
in this state.	1717

(J) The remedies provided by this section are cumulative and	1718
concurrent with any other remedy provided in this chapter, and the	1719
exercise of one remedy does not preclude or require the exercise	1720
of any other remedy.	1721

Sec. 1707.261.  (A) If a court of common pleas grants an	1722
injunction pursuant to section 1707.26 of the Revised Code, after	1723
consultation with the attorney general the director of commerce	1724
may request that court to order the defendant or defendants that	1725
are subject to the injunction to make restitution or rescission to	1726
any purchaser or holder of securities damaged by the defendant's	1727
or defendants' violation of any provision of sections 1707.01 to	1728
1707.45 of the Revised Code.	1729

(B) If the court of common pleas is satisfied with the	1730
sufficiency of the director's request for restitution or	1731
rescission under division (A) of this section and with the	1732
sufficiency of the proof of a substantial violation of any	1733
provision of sections 1707.01 to 1707.45 of the Revised Code, or	1734
of the use of any act, practice, or transaction declared to be	1735
illegal or prohibited or defined as fraudulent by those sections	1736
or rules adopted under those sections by the division of	1737
securities, to the material prejudice of a purchaser or holder of	1738
securities, the court may order the defendant or defendants	1739
subject to the injunction to make restitution or rescission to any	1740
purchaser or holder of securities damaged by the defendant's or	1741
defendants' violation of sections 1707.01 to 1707.45 of the	1742
Revised Code.	1743

(C) A court order granting restitution or rescission based	1744
upon a request made pursuant to division (A) of this section shall	1745
meet the requirements of division (B) of this section and may not	1746
be based solely upon a final order issued by the division of	1747
securities pursuant to Chapter 119. of the Revised Code or upon an	1748
action to enforce a final order issued by the division pursuant to	1749
that chapter. Notwithstanding the foregoing provision, a request	1750
for restitution or rescission pursuant to division (A) of this	1751
section may concern the same acts, practices, or transactions that	1752
were, or may later be, the subject of a division of securities	1753
action for a violation of any provision of sections 1707.01 to	1754
1707.45 of the Revised Code. If a request for restitution or	1755
rescission pursuant to division (A) of this section concerns the	1756
same acts, practices, or transactions that were the subject of a	1757
final order issued by the division of securities pursuant to	1758
Chapter 119. of the Revised Code, the court shall review the	1759
request in accordance with division (B) of this section, and the	1760
standard of review in section 119.12 of the Revised Code shall not	1761
apply to the request.	1762

(D) No purchaser or holder of securities who is entitled to	1763
restitution or rescission under this section shall recover,	1764
pursuant to this section or any other proceeding, a total amount	1765
in excess of the person's purchase price for the securities sold	1766
in violation of sections 1707.01 to 1707.45 of the Revised Code.	1767

Sec. 1707.28.  No prosecution or action by the division of	1768
securities or the director of commerce for a violation of any	1769
provision of sections 1707.01 to 1707.45, inclusive, of the	1770
Revised Code, shall bar any prosecution or action by the division	1771
of securities or the director of commerce, or be barred by any	1772
prosecution or other action, for the violation of any other	1773
provision of suchany of those sections or of any other statute;	1774
but all prosecutions underprosecutions and actions by the	1775
division of securities or the director of commerce for a violation	1776
of any provision of sections 1707.01 to 1707.45, inclusive, of the	1777
Revised Code, must be commenced within threefive years after the	1778
commission of the alleged violation.	1779

Sec. 1707.40. SectionsExcept as provided in section	1780
1707.261 of the Revised Code, sections 1707.01 to 1707.45 of the	1781
Revised Code create no new civil liabilities, and do not limit or	1782
restrict common law liabilities for deception or fraud other than	1783
as specified in sections 1707.042, 1707.043, 1707.41, 1707.42, and	1784
1707.43 of the Revised Code, and there is no civil liability for	1785
noncompliance with orders, requirements, rules, or regulations	1786
made by the division of securities under sections 1707.19,	1787
1707.20, 1707.201, and 1707.23 of the Revised Code.	1788

Sec. 1707.41. (A) In addition to the other liabilities	1789
imposed by law, any person whothat, by a written or printed	1790
circular, prospectus, or advertisement, offers any security for	1791
sale, or receives the profits accruing from such sale, is liable,	1792
to any person whothat purchased suchthe security relying on such	1793
the circular, prospectus, or advertisement, for the loss or damage	1794
sustained by suchthe relying person by reason of the falsity of	1795
any material statement contained therein or for the omission	1796
therefrom of material facts, unless suchthe offeror or person who	1797
that receives the profits establishes that hethe offeror or	1798
person had no knowledge of the publication thereof prior to the	1799
transaction complained of, or had just and reasonable grounds to	1800
believe suchthe statement to be true or the omitted facts to be	1801
not material. Whenever	1802

(B)(1) Whenever a corporation is so liable as described in	1803
division (A) of this section, each director of the corporation is	1804
likewise liable unless hethe director shows that hethe director	1805
had no knowledge of the publication complained of, or had just and	1806
reasonable grounds to believe the statement therein to be true or	1807
the omission of facts to be not material. Any such	1808

(2) Any director, upon the payment by himthe director of a	1809
judgment so obtained against himthe director, shall be	1810
subrograted to the rights of the plaintiff against suchthe	1811
corporation, and shall have the right of contribution for the	1812
payment of suchthe judgment against such of histhe director's	1813
fellow directors as would be individually liable under this	1814
section. Lack	1815

(C) For purposes of this section, lack of reasonable	1816
diligence in ascertaining the fact of sucha publication or the	1817
falsity of any statement contained in it or of the omission of	1818
sucha material fact shall be deemed knowledge of suchthe	1819
publication and of the falsity of any untrue statement in it or of	1820
the omission of material facts.	1821

(D) No action brought against any director, based upon the	1822
liability imposed by this section, shall be brought unless it is	1823
brought within two years after the plaintiff knew, or had reason	1824
to know, of the facts by reason of which the actions of the person	1825
or the director were unlawful, or within fourfive years after the	1826
purchase of the securities, whichever is the shorter period, or,	1827
in the case of an action to enforce a right of contribution under	1828
this section, itthe action is brought within two years after the	1829
payment of the judgment for which contribution is sought.	1830

Sec. 1707.42.  (A) Whoever, with intent to secure financial	1831
gain to self, advises and procures any person to purchase any	1832
security, and receives any commission or reward for the advice or	1833
services without disclosing to the purchaser the fact of the	1834
person's agency or interest in such sales, shall be liable to the	1835
purchaser for the amount of the purchaser's damage thereby, upon	1836
tender of the security to, and suit brought against, the adviser,	1837
by the purchaser. No suit shall be brought more than one year	1838
subsequent to the purchase.	1839

(B) Whoever acts as an investment adviser or investment	1840
adviser representative in violation of Chapter 1707. of the	1841
Revised Code shall be liable for damages resulting from the	1842
violation in an action at law in a court of competent	1843
jurisdiction. Damages may include consideration paid for the	1844
advice, any loss due to the advice, and all court costs, less the	1845
amount of any income received from the advice. No person may bring	1846
an action under this division more than fourfive years after the	1847
rendering of investment advice or two years after discovery of	1848
facts constituting the violation, whichever is the shorter period.	1849

Sec. 1707.43. Every(A) Subject to divisions (B) and (C) of	1850
this section, every sale or contract for sale made in violation of	1851
Chapter 1707. of the Revised Code, is voidable at the election of	1852
the purchaser. The person making such sale or contract for sale,	1853
and every person whothat has participated in or aided the seller	1854
in any way in making such sale or contract for sale, are jointly	1855
and severally liable to suchthe purchaser, in an action at law in	1856
any court of competent jurisdiction, upon tender to the seller in	1857
person or in open court of the securities sold or of the contract	1858
made, for the full amount paid by suchthe purchaser and for all	1859
taxable court costs, unless the court determines that the	1860
violation did not materially affect the protection contemplated by	1861
the violated provision.	1862

(B) No action for the recovery of the purchase price as	1863
provided for in this section, and no other action for any recovery	1864
based upon or arising out of a sale or contract for sale made in	1865
violation of Chapter 1707. of the Revised Code, shall be brought	1866
more than two years after the plaintiff knew, or had reason to	1867
know, of the facts by reason of which the actions of the person or	1868
director were unlawful, or more than fourfive years from the date	1869
of such sale or contract for sale, whichever is the shorter	1870
period.	1871

(C) No purchaser is entitled to the benefit of this section	1872
who has failed to accept, within thirty days from the date of such	1873
offer, an offer in writing made after two weeks from the date of	1874
suchthe sale or contract of sale, by the seller or by any person	1875
whothat has participated in or aided the seller in any way in	1876
making suchthe sale or contract of sale, to take back the	1877
security in question and to refund the full amount paid by such	1878
the purchaser.	1879

Sec. 1707.44.  (A)(1) No person shall engage in any act or	1880
practice that violates division (A), (B), or (C) of section	1881
1707.14 of the Revised Code, and no salesperson shall sell	1882
securities in this state without being licensed pursuant to	1883
section 1707.16 of the Revised Code.	1884

(2) No person shall engage in any act or practice that	1885
violates division (A) of section 1707.141 or section 1707.161 of	1886
the Revised Code.	1887

(B) No person shall knowingly make or cause to be made any	1888
false representation concerning a material and relevant fact, in	1889
any oral statement or in any prospectus, circular, description,	1890
application, or written statement, for any of the following	1891
purposes:	1892

(1) Registering securities or transactions, or exempting	1893
securities or transactions from registration, under this chapter;	1894

(2) Securing the qualification of any securities under this	1895
chapter;	1896

(3) Procuring the licensing of any dealer, salesperson,	1897
investment adviser, or investment adviser representative under	1898
this chapter;	1899

(4) Selling any securities in this state;

1900

(5) Advising for compensation, as to the value of securities	1901
or as to the advisability of investing in, purchasing, or selling	1902
securities;	1903

(6) Submitting a notice filing to the division under division	1904
(X) of section 1707.03 or section 1707.092 or 1707.141 of the	1905
Revised Code.	1906

(C) No person shall knowingly sell, cause to be sold, offer	1907
for sale, or cause to be offered for sale, any security which	1908
comes under any of the following descriptions:	1909

(1) Is not exempt under section 1707.02 of the Revised Code,	1910
nor the subject matter of one of the transactions exempted in	1911
section 1707.03, 1707.04, or 1707.34 of the Revised Code, has not	1912
been registered by coordination or qualification, and is not the	1913
subject matter of a transaction that has been registered by	1914
description;	1915

(2) The prescribed fees for registering by description, by	1916
coordination, or by qualification have not been paid in respect to	1917
such security;	1918

(3) SuchThe person has been notified by the division, or has	1919
knowledge of the notice, that the right to buy, sell, or deal in	1920
such security has been suspended or revoked, or that the	1921
registration by description, by coordination, or by qualification	1922
under which it may be sold has been suspended or revoked;	1923

(4) The offer or sale is accompanied by a statement that the	1924
security offered or sold has been or is to be in any manner	1925
indorsed by the division.	1926

(D) No person who is an officer, director, or trustee of, or	1927
a dealer for, any issuer, and who knows such issuer to be	1928
insolvent in that the liabilities of the issuer exceed its assets,	1929
shall sell any securities of or for any such issuer, without	1930
disclosing the fact of the insolvency to the purchaser.	1931

(E) No person with intent to aid in the sale of any	1932
securities on behalf of the issuer, shall knowingly make any	1933
representation not authorized by such issuer or at material	1934
variance with statements and documents filed with the division by	1935
such issuer.	1936

(F) No person, with intent to deceive, shall sell, cause to	1937
be sold, offer for sale, or cause to be offered for sale, any	1938
securities of an insolvent issuer, with knowledge that such issuer	1939
is insolvent in that the liabilities of the issuer exceed its	1940
assets, taken at their fair market value.	1941

(G) No person in purchasing or selling securities shall	1942
knowingly engage in any act or practice that is, in this chapter,	1943
declared illegal, defined as fraudulent, or prohibited.	1944

(H) No licensed dealer shall refuse to buy from, sell to, or	1945
trade with any person because the person appears on a blacklist	1946
issued by, or is being boycotted by, any foreign corporate or	1947
governmental entity, nor sell any securities of or for any issuer	1948
who is known in relation to the issuance or sale of suchthe	1949
securities to have engaged in such practices.	1950

(I) No dealer in securities, knowing that the dealer's	1951
liabilities exceed the reasonable value of the dealer's assets,	1952
shall accept money or securities, except in payment of or as	1953
security for an existing debt, from a customer who is ignorant of	1954
the dealer's insolvency, and thereby cause the customer to lose	1955
any part of the customer's securities or the value of those	1956
securities, by doing either of the following without the	1957
customer's consent:	1958

(1) Pledging, selling, or otherwise disposing of such	1959
securities, when the dealer has no lien on or any special property	1960
in such securities;	1961

(2) Pledging such securities for more than the amount due, or	1962
otherwise disposing of such securities for the dealer's own	1963
benefit, when the dealer has a lien or indebtedness on such	1964
securities.	1965

It is an affirmative defense to a charge under this division	1966
that, at the time the securities involved were pledged, sold, or	1967
disposed of, the dealer had in the dealer's possession or control,	1968
and available for delivery, securities of the same kinds and in	1969
amounts sufficient to satisfy all customers entitled to the	1970
securities, upon demand and tender of any amount due on the	1971
securities.	1972

(J) No person, with purpose to deceive, shall make, issue,	1973
publish, or cause to be made, issued, or published any statement	1974
or advertisement as to the value of securities, or as to alleged	1975
facts affecting the value of securities, or as to the financial	1976
condition of any issuer of securities, when the person knows that	1977
such statement or advertisement is false in any material respect.	1978

(K) No person, with purpose to deceive, shall make, record,	1979
or publish or cause to be made, recorded, or published, a report	1980
of any transaction in securities which is false in any material	1981
respect.	1982

(L) No dealer shall engage in any act that violates the	1983
provisions of section 15(c) or 15(g) of the "Securities Exchange	1984
Act of 1934," 48 Stat. 881, 15 U.S.C.A. 78o(c) or (g), or any rule	1985
or regulation promulgated by the securities and exchange	1986
commission thereunder. If, subsequent to October 11, 1994,	1987
additional amendments to section 15(c) or 15(g) are adopted, or	1988
additional rules or regulations are promulgated pursuant to such	1989
sections, the division of securities shall, by rule, adopt the	1990
amendments, rules, or regulations, unless the division finds that	1991
the amendments, rules, or regulations are not necessary for the	1992
protection of investors or in the public interest.	1993

(M)(1) No investment adviser or investment adviser	1994
representative shall do any of the following:	1995

(a) Employ any device, scheme, or artifice to defraud any	1996
person;	1997

(b) Engage in any act, practice, or course of business that	1998
operates or would operate as a fraud or deceit upon any person;	1999

(c) In acting as principal for the investment adviser's or	2000
investment adviser representative's own account, knowingly sell	2001
any security to or purchase any security from a client, or in	2002
acting as salesperson for a person other than such client,	2003
knowingly effect any sale or purchase of any security for the	2004
account of such client, without disclosing to the client in	2005
writing before the completion of the transaction the capacity in	2006
which the investment adviser or investment adviser representative	2007
is acting and obtaining the consent of the client to the	2008
transaction. Division (M)(1)(c) of this section does not apply to	2009
any investment adviser registered with the securities and exchange	2010
commission under section 203 of the "Investment Advisers Act of	2011
1940," 15 U.S.C. 80b-3, or to any transaction with a customer of a	2012
licensed dealer or salesperson if the licensed dealer or	2013
salesperson is not acting as an investment adviser or investment	2014
adviser representative in relation to the transaction.	2015

(d) Engage in any act, practice, or course of business that	2016
is fraudulent, deceptive, or manipulative. The division of	2017
securities may adopt rules reasonably designed to prevent such	2018
acts, practices, or courses of business asthat are fraudulent,	2019
deceptive, or manipulative.	2020

(2) No investment adviser or investment adviser	2021
representative licensed or required to be licensed under this	2022
chapter shall take or have custody of any securities or funds of	2023
any person, except as provided in rules adopted by the division.	2024

(3) In the solicitation of clients or prospective clients, no	2025
person shall make any untrue statement of a material fact or omit	2026
to state a material fact necessary in order to make the statements	2027
made not misleading in light of the circumstances under which the	2028
statements were made.	2029

(N) No person knowingly shall influence, coerce, manipulate,	2030
or mislead any person engaged in the preparation, compilation,	2031
review, or audit of financial statements to be used in the	2032
purchase or sale of securities for the purpose of rendering the	2033
financial statements materially misleading.	2034

Sec. 2913.02.  (A) No person, with purpose to deprive the	2035
owner of property or services, shall knowingly obtain or exert	2036
control over either the property or services in any of the	2037
following ways:	2038

(1) Without the consent of the owner or person authorized to	2039
give consent;	2040

(2) Beyond the scope of the express or implied consent of the	2041
owner or person authorized to give consent;	2042

(3) By deception;

2043

(4) By threat;

2044

(5) By intimidation.

2045

(B)(1) Whoever violates this section is guilty of theft.

2046

(2) Except as otherwise provided in this division or division	2047
(B)(3), (4), (5), or (6) of this section, a violation of this	2048
section is petty theft, a misdemeanor of the first degree. If the	2049
value of the property or services stolen is five hundred dollars	2050
or more and is less than five thousand dollars or if the property	2051
stolen is any of the property listed in section 2913.71 of the	2052
Revised Code, a violation of this section is theft, a felony of	2053
the fifth degree. If the value of the property or services stolen	2054
is five thousand dollars or more and is less than one hundred	2055
thousand dollars, a violation of this section is grand theft, a	2056
felony of the fourth degree. If the value of the property or	2057
services stolen is one hundred thousand dollars or more and is	2058
less than five hundred thousand dollars, a violation of this	2059
section is aggravated theft, a felony of the third degree. If the	2060
value of the property or services is five hundred thousand dollars	2061
or more and is less than one million dollars, a violation of this	2062
section is aggravated theft, a felony of the second degree. If the	2063
value of the property or services stolen is one million dollars or	2064
more, a violation of this section is aggravated theft of one	2065
million dollars or more, a felony of the first degree.	2066

(3) Except as otherwise provided in division (B)(4), (5), or	2067
(6) of this section, if the victim of the offense is an elderly	2068
person or disabled adult, a violation of this section is theft	2069
from an elderly person or disabled adult, and division (B)(3) of	2070
this section applies. Except as otherwise provided in this	2071
division, theft from an elderly person or disabled adult is a	2072
felony of the fifth degree. If the value of the property or	2073
services stolen is five hundred dollars or more and is less than	2074
five thousand dollars, theft from an elderly person or disabled	2075
adult is a felony of the fourth degree. If the value of the	2076
property or services stolen is five thousand dollars or more and	2077
is less than twenty-five thousand dollars, theft from an elderly	2078
person or disabled adult is a felony of the third degree. If the	2079
value of the property or services stolen is twenty-five thousand	2080
dollars or more and is less than one hundred thousand dollars,	2081
theft from an elderly person or disabled adult is a felony of the	2082
second degree. If the value of the property or services stolen is	2083
one hundred thousand dollars or more, theft from an elderly person	2084
or disabled adult is a felony of the first degree.	2085

(4) If the property stolen is a firearm or dangerous	2086
ordnance, a violation of this section is grand theft, a felony of	2087
the fourth degree.	2088

(5) If the property stolen is a motor vehicle, a violation of	2089
this section is grand theft of a motor vehicle, a felony of the	2090
fourth degree.	2091

(6) If the property stolen is any dangerous drug, a violation	2092
of this section is theft of drugs, a felony of the fourth degree,	2093
or, if the offender previously has been convicted of a felony drug	2094
abuse offense, a felony of the third degree.	2095

Section 2. That existing sections 111.16, 1701.01, 1701.831,	2096
1707.01, 1707.02, 1707.08, 1707.09, 1707.11, 1707.16, 1707.23,	2097
1707.28, 1707.40, 1707.41, 1707.42, 1707.43, 1707.44, and 2913.02	2098
of the Revised Code are hereby repealed.	2099

Section 3.  Section 111.16 of the Revised Code is presented	2100
in this act as a composite of the section as amended by both Sub.	2101
H.B. 278 and Sub. H.B. 349 of the 124th General Assembly. Section	2102
1707.01 of the Revised Code is presented in this act as a	2103
composite of the section as amended by both S.B. 32 and Sub. S.B.	2104
108 of the 124th General Assembly. The General Assembly, applying	2105
the principle stated in division (B) of section 1.52 of the	2106
Revised Code that amendments are to be harmonized if reasonably	2107
capable of simultaneous operation, finds that the composites are	2108
the resulting versions of the sections in effect prior to the	2109
effective date of the sections as presented in this act.	2110