Page:United States Statutes at Large Volume 48 Part 1.djvu/923

 73d CONGRESS. SESS. II. CH. 404. JUNE 6, 1934 . 897 (c) It shall be unl awful for an y such benefi cial o wner, direct or, bidden ttos, sell cequity or office r, direct ly or ind irectly, to sell a ny equity security of such security "short", or for issuer (other than an exempted security), if the person selling the delivery after 20 days. security or his principal (1) does not own the security sold, or (2) if owni ng the secur ity, d oes no t deli ver it agains t such sale within twenty days thereafter, or does not within five days after such sale deposit it in the mails or other usual channels of transportation ; but no person shall be de emed t o have violat ed thi s subs ection if he proves that n otwith standi ng the exerc ise of good f aith h e was unable to make such delivery or deposit within such time, or that to do so would cause undue inconvenience or expense. (d) The provisions of this section shall not apply to foreign or Transactions to which section inappli- domesti c arbi trage transa ctions unles s made in con traven tion o f such ca bl e. rules and regulations as the Commission may adopt in order to carry out the purposes of this section. ACCO UNTS AND RECOR DS, RE PORT S, EXAMINATIONS OF EXCHANGES, or Ac ountsf a ndanrec- MEMB ERS, AND OTHERS members, and others. SEC. 17 . (a) Every national securities exchange, every member Requirements, as thereof, every broker or dealer who transacts a business in securities pres cri bed by co mmi s- through the medium of any such member, and every broker or dealer making or creating a market for both the purchase and sale of securities through the use of the mails or of any means or instru- menta lity of in ters tate comme rce, shal l mak e, ke ep, and p reser ve for such periods, such accounts, correspondence, memoranda, papers, books, and other records, and make such reports, as the Commission by its rules and regulations may prescribe as necessary or appro priate in the public interest or for the protection of investors. Suc h Examination. accounts, correspondence, memoranda, papers, books, and other rec- ords shall be subject at any time or fro m time to time to such reaso nable peri odic, spe cial, or other exam inati ons by ex amine rs or other representatives of the Commission as the Commission may deem ne cessar y or a ppropr iate i n the public intere st or for th e pro- tection o f investo rs. (b) Any broker, dealer, or other person extending credit who Reports to Federal is subject to the rules and regulations prescribed by the Federal Reserve Board. Reserve Board pursuant to this title shall make such reports to the Board as it may require as necessary or appropriate to enable it to perform the functions conferred upon it by this title. If any such broker, dealer, or other person shall fail to make any such report or fail to furnish full information therein, or, if in the judgment of the Board it is otherwise necessary, such broker, dealer, or other person shall permit such inspections to be made by the Board with respect to the business operations of such broker, dealer, or other person as the Board may deem necessary to enable it to obtain the required information. LI ABIL ITY FOR MISL EADI NG S TATE MENT S SEC. 18 . (a) Any person who shall make or cause to be made any statement in any application, report, or document filed pursuant to this title or any rule or regulation thereunder, which statement was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, shall be liable to any person (not knowing that such statement was false or misleading) who, in reliance upon such statement, shall have purchased or sold a security at a price which was affected by such statement, for damages caused by such reliance, unless the person 86837 ° -34	57 Misleading state. ments. Liability for.