§16505.__Misleading filings

It is unlawful for a person to make or cause to be made in a record that is used in an action or proceeding or filed under this chapter a statement that, at the time and in the light of the circumstances under which it is made, is false or misleading in a material respect or, in connection with the statement, to omit to state a material fact necessary to make the statement made, in the light of the circumstances under which it was made, not false or misleading.

Official Comment

Prior Provisions: 1956 Act Section 404; RUSA Section 504.

The definition of "materiality" in TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 449 (1976) ("an omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote") has generally been followed in both federal and state securities law. See 4 Louis Loss & Joel Seligman, Securities Regulation 2071-2105 (3d ed. rev. 2000).

§16506.__Misrepresentations concerning licensing, registration or

exemption

The filing of an application for licensing, registration, a registration statement, a notice filing under this chapter, the licensing of a person, the notice filing by a person or the registration of a security under this chapter does not constitute a finding by the administrator that a record filed under this chapter is true, complete and not misleading. The filing, licensing or registration or the availability of an exemption, exception, preemption or exclusion for a security or a transaction does not mean that the administrator has passed upon the merits or qualifications of, or recommended or given approval to, a person, security or transaction. It is unlawful to make or cause to be made to a purchaser, customer, client or prospective customer or client a representation inconsistent with this section.

Official Comment

Prior Provisions: 1956 Act Section 405; RUSA Section 505.