Evening star., 1921-04-03
LAW TO
GUARD INVESTORS

OOVntO HvvlOlOVW
Commissioners Sponsor
Measure to Prevent the
Sale of Fake Securities.
Every Indication points to u speedy
enactment OF a much h-needed blue
sky law" In the District Of Columbia
for the protection of the people from
fake brokers" and advertising and
selling questionable securities.
w. r. Galliher. II. II. Mckee. Eu-
robert A. Cissei. representing the
District Bankers Association, and
John L. Edwards. William Il. Hibbs
and Eugene r.. Thompson of the
Washington Stock Exchange. after q
number of conferences. have made
sufficient suggestions, patterned after
the Maryland law on the subject. to
win the approval of the Dist rict
Commissioners
lhe latter have adopted d measure.
drawn by the District attorney. and
VIII sponsor 1t before Congress
1t Is proposed in tho measure to
register persons selling securities in
the District.
The definition of the terms used
are :.res given explicitly, the term
oToker meaning every person,
other than a salesman. who in the
District OF Columbia engages wholly
or in part in the business Of selling
or otherwise dealing in any security
issued by another person, or of un-
derwr!ting any issue of securities, or
n nfh
such securities for another or with
me purpose of reselling them, or of
onerinS them for sale to the public
on commission or at a profit"
salesman" is the employe of
proker or ANY one who shall at
pectation OF compensation. to sell
any security to any person."
Statements Under Oath.
The proposed bill provides:
Inat 1t shall appear to the Commits.
sioners that In the selling OF any securi.
.ies within the District Of Columbia any
pnv pe,soh da,.;, II employing or about to employ
fraud; or for obtaining money or prop
elty by means of any false or fsaudu-
rent pretense, representation or promise.
ana tney believe it to be in the interest
VI me pubic that an investiea ton be
made with view to the issuance of an
oroer such as herein provided, they
may require such person to file with
tnem a statement in writing, under
oath, as to all facts and circumstances
concerning ep the subject matter which
TO investigate, and for that purpose may
prescribe forms upon which such sfate
ment shall be made.
Ine Commissioners may require, in
addition thereto, such further data and
information as they may deem relevant.
and make such special Investigation "a
tney may deem necessary IN Connection
with such matter; and for the PURPOSES
OF this act the Commissioners or their
aeputy. duiy authorized in writing by
tnem. shaii have power to require by
subpoena the attendance and Testimony
OF witnesses and the production Of any
DOCKS. accounts. records and correspond
ence relating to any matter which the
Sommlssioners are authorized by this
act to consider or investigate
The Commissioners or their duty au-
thorized deputy may sign subpoenas.
administer oaths and ahirmations, ex-
anime witnesses and receive evidence.
May Force Obedience.
In case OF disobedience to a SUBJ.
poena or Of the contumacy of any
witness appearing before the Com
missioners or their duly authorized
woke the aid of the Supreme Court
of the District Of Columbia, and such
court may thereupon issue an order
recurring the persons subpoenaed to
ooey the subpoena. or to give. evil
aence touching the matter in ques-
OF the court may be punished by.
such court as q contempt thereof
Ihat the Commissioners, upon evil
aence satisfactory to them that in
the sale Of any securities within the
District Of Columbia any person in
employing or is about to employ any
device. scheme or artifice to defraud,
or for obtaining money or property by
means of any false or fraudulent nre-
tense, representation or promise, NAV
issue and cause to be served upon
such person an order requiring the
party guilty thereof to cease and de-
sist therefrom.
II 1t shall appear to. the Com
missioners that an irrepa rable public
injury ts imminent unless such order
is issued before q full Investigation
e. can 0e MADE. they may. pending such
investigation, issue such order, but
the same shall be accompanied with
a request for information as to facts
and the order be effective until such
Information is furnished and two DAYS
thereafter exclusive Of Sundays and
legal holidays.
Serving Notices.
Serving Of notices is provided for
In section 3, service being made to
the person to be served, member of
partnership. president. secretary or
executive officer. as desired, by leay-
ing q copy OF the document at the
principal Office or place of business
or by registering or mailing a CODY.
A verified return Of the person 10
serving said order is sufficient EVIL
dencs.
Must Give Security.
Orders of the Commissioners are
renewable by the Supreme Court Of
the District. but unless petition for
said review Is filed within twenty
days. exclusive of legal holidays and
Sundays. after the service of the or
der. nor unless the petitioner, with
sumcient security approved by a Jus.
ttce OF said court. shall enter into
an agreement to satisfy and pay the
actual costs OF such proceeding.
and any evidence Of fraud may bring
cancellation of registration.
ReEistration Fees.
Registration fees Of $50 per annum
are provided for broker and 81 for
salesman, and fees are payable on or
before the first Wednesday Of Janu-
ary in each year.
A fne Of $1,000 IS provided for any
attempt to sell securities without
registration. and $500 to $1,000 or i'm
prisonment for ten years, or both, for
attempting to sell securities after an
order to refrain has been issued.
Perjury is liable to be charged in
the event Of MISREPRESENTATION.
Since the adoption Of the blue sky
law in Maryland many sellers Of
fake" securities have been working
in the District. and the proposed law
fa Al