2015 ORS § 59.135¹

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]

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 (Liability in connection with sale or successful solicitation of sale of securities) 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 (Liability in connection with sale or successful solicitation of sale of securities), 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)

Law Review Cita­tions

56 OLR 473 (1977); 68 OLR 228 (1989)

Chapter 59

Notes of Decisions

Public policy does not prohibit nonculpable corporate directors held liable under this chapter from seeking indemnifica­tion from per­sons actually responsible for the wrongful issuance of unregistered securities. Collins v. Fitzwa­ter, 277 Or 401, 560 P2d 1074 (1977)

Atty. Gen. Opinions

Addi­tional real estate license not re­quired where security sold is interest in limited partnership to invest in real estate, (1978) Vol 38, p 1971


1 Legislative Counsel Committee, CHAPTER 59—Securities Regulation, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors059.­html (2015) (last ac­cessed Jul. 16, 2016).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2015, Chapter 59, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano059.­html (2015) (last ac­cessed Jul. 16, 2016).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.