The Lynden tribune. [volume] (Lynden, Wash.) 1908-current, 1920-12-23
B-UE SKY LAW TO GO
BEFORE LEGISLATURE
Measure Would Prevent Peddling OF
Fake Stock Issues; Lynden Would
Save Money

To protect the investing public
from exploitation by agents. brokers
or concerns attempting to sell seeuri-
ties that are not safe or legitimate in
vestments, "blue-sky" law has been
drafted by representative commit,
tee for presentation to the legisla-
ture in January.
Had such law been passed by the
1919 Legislature. the Lynden district
would be thousands of dollars richer,
as doubtful stocks have been sold
here by the armful.
This measure has been evolved af-
ter weeks of careful work by lawyers,
bankers, accountants, business men
and others familiar with investment
matters. At present, the committee
points out, there is no protective law
on the statute books of this state. AS
a result it is possible for any sort of
stock, bonds or other securities to be
placed on the market, advertised and
sold to an uniformed and unsuspect-
ing public.
1t is to provide a law that will
eliminate this condition and assure
those who have funds to invest that
they will be fully informed of all
phases of any security offered and
that each security will be scrutinized
by a competent authority. that the
committee undertook this work.
1t is asserted by the committee that
if this law is passed by the legisla-
ture. no agent broker or company
handling legitimate securities will
have anything to fear and that only
such restrictions are planned as will
bar illegitimate business.
Copies of the proposed law have
been placed in the hands of each
member of the legislature. so that
careful study can be made of the
measure before the session is called
to order.
One of the features of the law is
the creation of state securities de-
partment, the chief officer of which
would be a commissioner of securi-
ties to be appointed by the governor
and to hold Office at the pleasure of
the governor. The commissioner
would have his head Office in Olym-
pia, with possible branch offices in
Seattle or Spokane. He would be
empowered TO hire deputies and
clerks as may be needed for the dis
charge of duties imposed by the law.
Under the proposed law it would
be necessary for any securities bro
ker or agent to obtain certificate
from the commissioner before doing
business in this state. A company
that proposed to sell its own stock or
bonds would have to submit to the
commissioner detailed statement
of its financial affairs and copies of
any securities it planned to sell. to-
gether with any prospectus, adver-
tisement or other description of the
securities to be used in the sales.
Securities could not be sold lawfully
until the commissioner had passed
on them and issued permit for their
disposition.
Under this law, the committee de-
clares the public would be protected
and assured of having an opportun-
ity to purchase the choicest securi-
tier offered anywhere in the country.
Investment authorities show how by
this means there would be no re-
strictions on buyers in the state OBJ
tanning the choicest offerings, be-
cause agents or brokers holding GER
tificates from the securities commits
sioner would be empowered to buy
and offer for sale paper issued In
eastern centers, without submitting
each issue to the commissioner for
his approval.