ORS 59.135
Fraud and deceit with respect to securities or securities business


It is unlawful for any person, directly or indirectly, in connection with the purchase or sale of any security or the conduct of a securities business or for any person who receives any consideration from another person primarily for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise:

(1)

To employ any device, scheme or artifice to defraud;

(2)

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 under which they are made, not misleading;

(3)

To engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person; or

(4)

To make or file, or cause to be made or filed, to or with the Director of the Department of Consumer and Business Services any statement, report or document which is known to be false in any material respect or matter. [1967 c.537 §14]

Source: Section 59.135 — Fraud and deceit with respect to securities or securities business, https://www.­oregonlegislature.­gov/bills_laws/ors/ors059.­html.

Notes of Decisions

The fraud provisions of this section apply to all sales of securities, not merely those subject to the registration requirements. Chester v. McDaniel, 264 Or 303, 504 P2d 726 (1972)

This section does not provide for a private right of action. Financial Programs, Inc. v. Falcon Financial Serv., Inc., 371 F Supp 770 (1974)

There was no evidence from which the jury could find that the defendants violated this section. Berki v. Reynolds Securities, Inc., 277 Or 335, 560 P2d 282 (1977)

Evidence was sufficient to show that brokerage firm did not engage in business so as to operate a fraud or deceit on investor, his guardian, or his spouse. Ryan v. Foster & Marshall, Inc., 556 F2d 460 (1977)

Even though this section makes it illegal for any person to defraud another in connection with purchase or sale of any security, ORS 59.115 provides a civil remedy only to purchasers of securities. Held v. Product Manufacturing Co., 286 Or 67, 592 P2d 1005 (1979)

For misrepresentation or nondisclosure of facts in proxy statement to be actionable, the misrepresentation or nondisclosure must be material under standard specified by Supreme Court in TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976). Beebe v. Pacific Realty Trust, 578 F Supp 1128 (1984)

Where Oregon Supreme Court has refused to imply remedy for sellers under ORS 59.115, federal circuit court referred to imply remedy against brokers for violation of this section. Nesbit v. McNeil, 896 F2d 380 (9th Cir. 1990)

Violations of subsections (1), (2) or (3) under this section refer to acts that are committed with “scienter,” that is, that defendants acted with guilty state of mind when defendants made misrepresentations on which plaintiff relied. State v. Marsh & McLennan Companies, Inc., 353 Or 1, 292 P3d 525 (2012)

Law Review Citations

68 OLR 895 (1989); 37 WLR 335 (2001)

59.005
Short title
59.015
Definitions for Oregon Securities Law
59.025
Securities exempt from registration
59.035
Transactions exempt from registration
59.045
Authority of director to deny, withdraw or condition exemptions
59.049
Federal covered securities exempt from registration
59.051
Statutory references to federal law
59.055
Conditions of offer and sale of securities
59.065
Registration procedures
59.070
Amended registration application
59.075
Registration by director
59.085
Conditions imposed on registration
59.095
Approval of plan to issue securities in exchange for other securities, claims or property
59.105
Denial, suspension or revocation of registration
59.115
Liability in connection with sale or successful solicitation of sale of securities
59.125
Effect of notice of offer to repay purchaser
59.127
Liability in connection with purchase or successful solicitation of purchase of securities
59.131
Effect of notice of intent to return unlawfully purchased security
59.135
Fraud and deceit with respect to securities or securities business
59.137
Liability in connection with violation of ORS 59.135
59.145
Effect of notice filing, registration or license
59.155
Director is agent for service of process
59.165
Licensing of broker-dealers, investment advisers and salespersons required
59.175
Procedures for notice filing and licensing
59.185
Expiration of license
59.195
Licensees to keep records
59.205
Grounds for denying, suspending, revoking or imposing condition or restriction on license
59.215
Action against applicant or licensee for act or omission of associate
59.225
Cancellation of license or application
59.235
General supervision over persons dealing in securities
59.245
Investigations
59.255
Enjoining violations
59.265
Procedure when assets or capital of broker-dealer or investment adviser found impaired
59.275
Burden of proof
59.285
Rules
59.295
Notice of orders
59.305
Judicial review of orders
59.315
Oaths and subpoenas in proceedings before director
59.325
Certified copies of documents
59.331
Scope of Attorney General powers
59.335
Application of certain sections
59.345
When offer to sell or buy is made in this state
59.350
Treatment of certain transactions
59.355
Corporations subject to other laws
59.365
Common-law and statutory rights not limited
59.370
Limitation on liability for good faith act or omission
59.451
Prohibition against filing false statement by person under investigation or examination
59.480
Definitions for ORS 59.480 to 59.505
59.485
Required reporting by certain securities professionals of suspected financial exploitation
59.490
Notifications to third parties
59.495
Delay of disbursements
59.500
Limitation on liability
59.505
Provision of records to law enforcement and certain state agencies
59.535
Definitions for ORS 59.535 to 59.585
59.540
Registration in beneficiary form
59.545
Registration in beneficiary form
59.550
Origination of registration in beneficiary form
59.555
Form of registration in beneficiary form
59.560
Effect of registration in beneficiary form
59.565
Ownership on death of owner
59.570
Protection of registering entity
59.575
Nontestamentary transfer on death
59.580
Terms, conditions and forms for registration
59.585
Short title
59.710
Definitions for ORS 59.710 to 59.830
59.720
Application of ORS 59.710 to 59.830 to real estate contracts and brokers
59.730
Making contract involving securities without intending a bona fide sale or purchase
59.740
Conducting bucket shop or repeatedly making forbidden contracts
59.750
Receipt or communication of prices for purpose of forbidden contract
59.760
Reporting false sale of securities with intent to deceive
59.770
Manipulating market by pretended sales
59.780
Broker’s trading against customer’s order
59.790
Insolvent broker-dealer receiving securities from customer
59.800
Pledge or sale by broker-dealer of customer’s securities
59.810
Delivery to customer of true statement of purchase or sale made by broker
59.820
Actions against corporation for second violation
59.830
Self-incrimination by witness
59.991
Criminal penalties for ORS 59.005 to 59.505 and 59.710 to 59.830
59.995
Civil penalties for ORS 59.005 to 59.505 and 59.710 to 59.830
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