Shepherdstown register. [volume] (Shepherdstown, Va. [W. Va.]) 1849-1955, 1920-01-22
A Statement From Auditor Darst.

State Auditor ]. S. Darst, who ad-
ministers West Virginia's Blue Sky
Law, has received information OF con-
siderable activity in the State by I'M
authorized stock salesman. and makes
the following suggestions to those
who are requested to buy stocks or
other securities in this State:
When approached by stock sales
man, require him to produce a letter
of authority signed by the State Audi
tor to sell the stock he offers, and if he
had no such authority, wire the Audi
tor Immediately, giving the name OF
the agent and company whose stock
he is attempting to sell. II he has a
letter OF authority. remember that
such is not even a recommendation
that the company will be successful,
but only statement that the technical
J requirements of the law have been
J satisfied.
The law aims to compel every pro-
moter to lay all his cards on the table.
, If the stock has been issued for in
tangible assets, or for property the
value OF which is not readily as
certainable, that fact must be clearly
set forth in the subscription blank, in
order that every signer may have no.
tlce Of the true condition Of the COM
, pany Certain statements are re-
CURED, and in general all papers hav-
70 10
ton, standing or purpose Of the COM
, pany must be presented before the
, stock can be sold.
Another important feature is that
the Auditor may require all stock is.
, sued for property or intangible assets
to be placed in escrow and there held
under such terms as he may prescribe.
This prevents the promoter from plac
; ing stock on sale that has been given
: Tor certain supposed valuable con-
slderation, and makes the value of his
, stock depend on the success of the
; concern.
Our law specifically limits the
, amount any stock salesman shall re-
, celve for selling stock to 10 per cent
: par value, which is big protection.
before we had this law it was a com,
, mon thing for the stock salesman to
; receive from Is to so per cent for the
sale of stock.
! The law makes it conspiracy to
defraud in connection with the sale
OF stocks, or other securities, a pen
,, ltentiary offense. 1t also provides
any person making a false statement,
, either oral or written, or conceals any
hgures concerning securities, which
; ne is Offering for sale, shall be guilty
of felony
1t is our custom to place in the sub
Scrlption blanks as many of these
facts as possible in order that the
prospective buyer may know the true
situation. Then it is up to each in
dlvldua to judge for himself, whether
or not he wants to invest. Neither
the Auditor nor any other living man
; can tell what the outcome will be. Of
course, if it appears on the face of the
papers that the promotion is insolvent
or fraudulent, permission to sell stock
is absolutely refused, as happens in
many cases.
If you desire further knowledge
than the subscription blank shows.
write the Auditor, and he will gladly
give you such information as he has.
This is about all any law can dot
is then up to you. If it is an oil COM
pany, only the drill can determine
whether oil will be found If it is a
: manufacturing company, the person.
mel OF the management, everything
else being equal, will determine the
success or failure of it,
For these and many other reasons
! you should proceed with great eau
s ton before purchasing any stocks. If
3 YOU are an employee, consult YOUR en-
= pioyer, or a business friend in whom
Z YOU have confidence. Take your time
+ legitimate business will wait, invcsti-
3 gate to your full satisfaction, and re.
y member man of means can afford r.
Is take chance that man of small
+ means should not think Of, because If
= one case the man may only lose 9
q small portion Of what he has. and the
= other can lose all.
IS Finally, use this Office in ever,
q way possible. Each company author
iZed to sell stock in this State has GER
tain statements under oath on fl,