Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1920-12-27
ORIGINAL BILL
WAS GOOD ONE.

The Dill as II passed the lyl9 Legs
lature and nrst passed the House at this
special session by a vote Of 81 TO was
very good one and designed TO pro-
tect the public. However. the amend
ments made IN the Senate and accepted
by the House transforms X into a mon
strosity 40 far as a really. effective law
is concerned.
The first amendment struck out the
words principal or agent in section l
and Inserted the word 1ssuer making
this and succeeding sections apply only
the Issuer who may undertake by nd
vertisement circular. prospectus. through
agents or other public or general Offering
attempt to dispose Of securities amenda-
BILE 10 this law.
Here Is how this may work: let US
call tie 'issuer' the Come On Motor Cor
poration with home Offices In Illinois.
II they for themselves or through agents
attempt to sell stock in this State they
may come under the jurisdiction OF the
Blue Sky Commission. However. TO get
around the law they have a secret CON
tract with Jones & Co, Indianapolis
stock statesmen, TO underwrlte their en-
tire issue Of 81 OOO 900 at $623 per share
Of SO par value Jones & Co. thus pur-
chase this stock for their own account
and proceed 10 sell IL IN this State for
$3.50 a share. II is their stock and
hey have "A right to dispose OF IL ana
advertise II for sale under their own
name. The issuer does not enter the
State at all and therefore does not come
under the jurisdiction Of the commission
Jones d Co dispose Of the stock 10 the
citizens at 100 per cent gross profit and
there is no Information filed with the See
Rotary of State in regard TO the Come-Op
Motor Corporation.
The next amendment which worked
havoc with the bill was that which
struck out all Of paragraph g In section
and other parts OF the bill requiring
filing Of copies of all contracts or agree
writer's OF such securities, etc, and all
contracts relative 10 the sale or dis
position OF stock. together with copies
OF the minutes Of directors and stock
holders relating to or affecting the is
sues Of such securities.
PROVISION WAS
MEAT OF BILL.
This provision was the very meat of
the bill as II passed the House and would
have done more than all the rest OF the
bills put together to protect the public
from the sale of questionable securities.
But the stock salesman does not wish
publicity In such matters. and this part
was stricken from the bill.
Without the provision requiring the
filing OF copies of all contracts and min
utes relative to the disposition OF stock,
most any sort of a deal may be put over
without the knowledge Of the investing
public.
Another amendment struck out all of
section 20, which made sales consum-
mated I'm viOlaffOu Of the provisions of
the act voidable, providing that request
for the return Of the money was made
In writing within one year. Is there any
good reason why a sale made in viola
ton Of the law should not be voidable ?
But those opposed to a real Blue Sky
law didn't wish such contracts to be
even voidable, and this section went
out
THE salesman of questionable securi-
ties prefers to work under blue sky
law II such n law Is to his liking, as he
uses the fact that the State has a blue
sky law to boost his sales. We believe
that the Indiana law will suit him. He
will In effect, say, 'Yo know Indiana has
one of the most stringent blue sky
laws Of any State in the Union. The
commission even passes on the moral
and business qualifications of applicants
If this stock were not all right, maybe
we wouldn't be allowed to sell the
stock
The revision OF the law is expected to
bring about a fight in the Assembly.
Any attempt to pass a really effective
blue sky" law has always brought op-
position from a certain part of the AS
sembly influenced by promoters Of get
rick-quick schemes.