Page:United States Statutes at Large Volume 78.djvu/665

 78 STAT. ]

PUBLIC LAW 88-503-AUG. 30, 1964

tion in any profit-sharing agreement; collateral-trust certificate; preorganization certificate or subscription; transferable share; investment contract; voting-trust certificate; certificate of deposit for a security; certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease; or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. "Security" does not include any insurance or endowment policy or annuity contract under which an insurance company promises to pay a fixed sum of money either in a lump sum or periodically for life or some other specified period or any contract issued by an insurance company pursuant to section 41 of chapter III of the Life Insurance Act, as added by Public Law 86-520 (D.C. Code, sec. 35-541). (m) "State" means any State, territory, or possession of the United States, and the Commonwealth of Puerto Rico, but not the District of Columbia. FRAUD

SEC. 3. I t shall be unlawful for any person, in connection with the offer, sale, or purchase of any security, directly or indirectly— (a) to employ any device, scheme, or artifice to defraud; (b) to make any untrue statement of a material fact, or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances in which they are made, not misleading; or (c) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. LICENSE

REQUIREMENT

SEC. 4. (a) I t shall be unlawful for any person to transact business in the District as a broker-dealer or agent unless he is effectively licensed under this Act. (b) I t shall be unlawful for any broker-dealer or issuer to employ an agent unless the agent is effectively licensed under this Act. The license of an agent shall not be effective during any period when he is not associated with a particular broker-dealer or a particular issuer. When an agent begins or terminates a connection with a broker-dealer or issuer, or begins or terminates those activities which make him an agent, the agent as well as the broker-dealer or issuer shall promptly notify the Commission. (c) Every license and renewal license shall expire one year from its effective date, but in any case in which timely and sufficient application for a renewal license has been made in accordance with section 5(a) no license shall expire until final action of the Commission upon such pending application. The Commission may by rule or order fix a schedule for the first renewal of licenses so that subsequent renewals ma}^ be staggered over the one-year period. For this purpose the Commission shall reduce the license fee proportionately for any initial license which may expire before one year from its effective date. LICENSE PROCEDURE

SEC. 5. (a) A broker-dealer or agent may obtain an initial license by filing with the Commission an application executed by all partners, directors, and officers of the applicant personally engaged in the securities business in the District, together with a consent to service of process pursuant to section 15(f) of this Act. The application for

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