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

Advocates of a 'blur sky law to protect II
sophisticated investors against the wiIcS Ill
guile Of promoters of fake oil, mining or 9th
stocks, will shortly have their innings before t
territorial legislature.
California, which has suffered more TIN
Nc st states from the activities of the j. Ruff
WallingfOrls of stock promotion, has now
blue sky" measure before the state legislator
the California Association of !
tcstment Corporations is pushing bill design
to protect the investing public and yet not Ike
apital out of the state.
Some of the bills provisions are admiral
and could very well be incorporated in reg
latins measure for stock sales in Hawaii.
main provisions are
Every corporation co-partnership, syndicate, as
scciaon, firm person, organized doing
business in this state which shall hereafter be
organized do business in this state, whether in
corporated unincoEporated, which shall sell or
negotiate for the sale of any 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 municipality of the state Of
California shall be known as an investment COM
pany If such stocks, notes. bonds, securities in
vestm nts be of its creation otherwise it shall
be known for the purpose of this act an invest
ment vender.
A public offering shall be deemed to be any offer
t. cell negotiate for sale any stocks other Sc
curities by any printed written notice adver-
tisement of such sale.
Every investment in personal corporate secur-
itA or real estate offered for sale by public offering
shall be included in its provisions, if the same be
9TH tbana nplo ifv as a
whole If the same be offered for sale in parts
subdivisions.
Before offering or attempting to sell any stock,
bonds notes other securities of any kind char
aeter every investment company vender shall file
in the office of the registrar of investment compa-
MES TENDERS of this state together with filing
fee of So, document In addition to those
qired fy law to be filed by corporations Joint stock
companies, In the office Of the secretary of state
Il Il IT shall contain:
s First-A statement showing in full detail the plan
upon which it proposes to transact business.
Seeond-From time to time copy of all contracts,
bonds other investments and a statement of all
other investments securities which it may propose
execute with sell to its contributors custom
ers
sThird-A statement which shall show the name
and location of the investment company or 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 invest
ments which it proposes to execute sell, and prof
its or commissions accruing to accrue therefrom
and of the intended and disposition of all funds
derived from the sale thereof and the persons to
ceiye the same and have charge of disposition thereof
Sixth-Such other matters and things touching it's
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
lep OF in oh 10 to he do
trial balance of such accounts and balancesheet
thereof, which shall be recorded in book for that
purpose.
At least once year the books of the investment
company must be audited, and a report of the audit
must be published in a newspaper of general circu-
lGtion published in the county in which is situated
the general offices of the company.
Any company failing to file it's report, failing
to publish it's baance-sheet at the close of business
December 3st of each year. shall forfeit its right
to do business in this state.
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 an accountant to inspect the books
of the investment company and report to him.
Any false statements of the securities 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 10000
persons and corporations in California, defines in
vestment companies and vendors, and provides for
their registration and publicity and for full disclos
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"
The Greater Honolulu Chamber of COmmrr