Honolulu star-bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1912-2010, 1913-01-17
EDITOR
REGULATING STOCK SALES

Advocates OF Il "hlur sky law to pre- trtl I'll
sophisticated investors against the wiIcs an
milc Of promoters of fake oil. mining or utht
tockS, will shortly have their innings before II
legislature.
California, which has suffered more tina
nc It states from the activities of the j. Ruff
NalljngfOrls of stock promotion, has now
blue sky measure before the state legislator
the California Association of Il
cstment Corporations is pushing bill design,
o protect the investing public and yet not kee
apit;l out of the state.
Some If the bills provisions are admirab
nd could very we'll be incorporated in a reg
ating ~, assure for stock sales in Hawaii
rain provisions are:
Every corporation, co-partnership, syndicate,
scciaion, firm person, now organized doing
business in this state which shall hereafter be
organized or do business in this state, whether in
corporated unincorporated, which shall sell or
negotiate for the sale of stocks bonds notes
other securities investments of any stocks bonds,
notes other securities investments of any kind
hereinafter stated. included provisions thereof,
other than bonds of the United States, the state of
California, of some municipality of the state of
California, shall be known investment COM
pany If such stocks, notes. bonds, securities in
vestm nts be of its own creation; otherwise it shall
be known for the purpose of this act as invest
ment vender.
A public offering shall be deemed to be any offer
t. sell negotiate for sale any stocks other
curities by any printed or written notice or adver-
tisement Of such sale.
Every investment in personal or corporate secur
itI real estate offered for sale by public offering
shall be included in it's provisions, if the same be
other than single security property offered as
whole II the be offered for sale in parts
subdivisions.
Before offering or attempting to sell any stock,
bonds notes other securities of any kind char
acer, every investment company vender shall file
in the office of the registrar of investment compa-
MES vendors of this state together with filing
fee of So. document in addition to those now
qured BY law to be filed by corporations joint stock
companies, in the office of the secretary of state
It shall contain:
Ffrst-A statement showing in full detail the plan
upon which it proposes to transact business
Second-From time to time a copy of all contracts,
bonds other Investments and statement of all
other investments securities which it may propose
to execute with sell to its contributors custom
ers. s@@ a. z
Third-A statement which shall show the name
and location Of the investment company vender.
Fourth-An itemized statement of the actual finan-
cial condition of the investment company including
the amount of its assets and liabilities.
Fifth-A specific and itemized statement of the
cost to itself of the bonds, notes. securities or invest
ments which it proposes to execute SELL and prof.
its commissions accruing or to accrue therefrom
and of the intended and disposition of all funds
derived from the sale thereof and the to
ceve the and have charge of disposition thereof
SiXth-Such other matters and things touching its
affairs as the said registrar may require.
The general accounts of every investment COM
pany doing business in this state shall be kept by
double entry and such investment company shall at
least once in each quarter make to be made
trial balance of such accounts and balance-sheet
thereof which shall be recorded in book for that
purpose.
At least year the books of the investment
company must be audited, and a report of the audit
must be published in newspaper of general circu-
lGtion published in the county in which is situated
the general offices of the company.
Any company failing to file its report, failing
to publish its balance-shee at the close of business
December 31st of each year. shall forfeit its right
to do business in this state
A copy of the annual report shall be given to all
investors.
The registrar may on the application of one-tenth
of the stockholders or members of the investment
company, appoint accountant to inspect the books
of the investment company and report to him.
Any false statements of the securities or the re-
port of the auditors shall be felony punishable by
Imprisonment for not less than year nor more
than three
The BILL which, it is estimated, will affect 100000
persons and corporations in California, defines in
vestment companies and vendors, and provides for
their registration and publicity and for full dtsclos
concerning investments offered to the public for
sale 1t prevents fraud in the offering of such in
vestments for sale, creates registrar of investment
companies and vendors to administer this and other
laws and provides penalties. 1t is to be known as
the investment, publicity and full disclosure act