The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1915-02-10
BLUE SKY" LAW
SOON In EFFECT
HAS NOW PASSED soTH HOUSES
AND WILL SOON Be
a LAW.
Is Big Improvement Over Old Law
anc VIII Clear Up Many Points
That Have Been Doubtful
(By W. r. kEYScR)
lStaff CorreaponaenN


Revising the blue Sky" law which
was passed at the last session OF the
legislature and which recently was
held unconstitutional By the United
States Circuit Court. q bill has pass
ed both branches Of the legislature.
which. II IL believed. cures all the
objections found by the court. and al
the same time Is substantial inn
prOvemcnt in many respects over the
former law
IRE Senate yesterday concurred in
the action OF the House In passing the
bill several days ago. Those voting
IN favor OF the measure were: Bless
ing. Carter. Coalter. Fox. GOdbey.
GOody koOntz. Gray. Gregory. Hawley.
keim. Lowe. Marshall. Miller. Ne
Alloy. McCrum. Parrish. Rosenbloom.
Strother. Talbot. White and England
Opposing were the following:
Beckwith. Hatfield. Kump. McCuskey.
and Hogg
The new bill exempts entirely from
It's operations. state and national
banks. Building and Loan associations
and corporations not organized for
profit. as well as all stocks and secur-
tiles under the following conditions.
uD When sold pursuant to the or
der of a court.
90 When sales are confined to old
stockholders OF the issuing company.
CD When the issue is taken Dy
the incorporators only. as bona fide
holders.
CD When the issue taken by the
stockholders. bOndholders or incorpo--
ators in connection with a merger.
90 When bona fide private hold
ings are offered for sale
IL also exempts bona fide offers of
sale 10 banks. bankers. brokers sr
trust companies, who deal in the Sc
curities offered.
The law almost entirely eNempts
what may be termed the conservative
business promotion. in that IL not
more than eight per centum return on
the investment Is promised and the
proposition is not fraudulent, nothing
is required OF the promoter except
That II bonus stock has been issued
and the company Is not on a dividend
paying basis. a subscription blank
showing this fact must be used SO
that each purchaser will have propar
notice Of this feature instead of its
being hidden from him az might 9th
erwise be the case. ana the Auditor
may require such bonus stock to be
placed in escrow.
Speculative Securities
Stocks and securities for which a
return In excess of eight per cent Is
promised, are termed speculative" Sc
curites. and are subject to practically
the same supervision as is provided
by the present act: that Is, full in
formation in regard to such securities
must be filed with the auditor. Only
Z ffgf
may be used in solicitation. II. how
ever. gives the Auditor authority TO
waive certain requirements should the
circumstances so justify Misrepre-
sentation, fraud or reckless conceal
ment In connection with the promotion
or sale OF stocks and securities are
made felonies.
n compliance with the new law ipso
tacto creates the Auditor attorney-in-
fact for service of process for viola
Z lions thereof. so that II is made easier
Tor the victim to reach the violator.
promotion expenses are limited TO
10 per cent of par value in the case
OF stocks and five per cent in the case
OF bonds OF other securities. This pro-
vision will eliminate all schemes de-
Vised for the making Of profits for
promoters at the expense Of the inves-
tors. but will not interfere with legiti-
mate promotions
The Auditor can refuse authority TO
all only upon the ground OF fraud. in
case the provisions Of the Act have
been complied with. and the applicant
Is provided with appropriate means
Tor an appeal from the Auditors de-
cislon
Must Keep Records.
me law provides that proper
records and books OF accounts shall
be kept and open TO the inspection OF
investors. but does not require double
entry. as did the old Act. II does not
discriminate against foreign promo
ters
todes away with the certificate
OF authority which the Auditor issues
under the present law: thus making
the promotion stand on its own merits
rather than on the strength Of a state
mont bearing the seal OF the State.
II provides 10 rannual instead Of semi
annual statements. but the Auditor
may AZ any time require information.
II makes a felony Of fraud or mis-
representation in connection with the
sale Of real esate located outside Of
West Virginia. which Is not covered
In the present law
u viii be observed that this new
law o. q much less burdensome form
OF supervision than the old law. and
yet o. gives the investor substantial