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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 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 |
(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 |
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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
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 |
(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 |
(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 |
(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 |
(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 |
(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 |
(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 |
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 |