Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1921-01-19
PURPOSE is TO
MAKE'BLUESKY
LAW EFFECTIVE
Director of Securities Commits
sion Prepares Amend
ments to Act.
REMEDIES FOR DEFECTS

Indiana will have the best securities
law in the United States, II the amend
ments as drafted and presented to the
Senate Tuesday afternoon are accepted
and passed without change" Maurice
MendenhaH, director Of the Indiana
securities commission, declared following
the Introduction of the amendments by
Senator Oscar Rats Of Paoh. The
amendments were drafted by Mr.. Men
denhan, with the assistance Of Senator
Rats, who was one OF the chief sup
porters of the bill passed in the special
session of 1920.
The amendments to the blue sky law
will remedy the defects Of the present
law, which, according to Mr.. Menden-
hall provides no penal provisions for
violators, and which was ineffective in
many other ways. Mr.. Mendenhan stated
that two or three more persons will be
required to carry out the provisions of
the amended law, but added that the de
partment will be absolutely self-sus-
tanning.
One provision Of the amendment, a.
drafted, is the raising OF fees and plac-
ing them on a line similar to fees of
other States having blue sky laws. The
increase in the fees, according to Mr..
MendenhaT, will make the department
more than sustaining
WOULD Put TEETH
IN PENALTY.
The law as amended would carry penal
provisions. adequate 10 prosecute viola
tors of tho law. According to the mem
bers of the blue sky commission, the
present penal provisions are wholly in
adequate and fell to meet violations that
have already taken place.
10
injunction proceedings, which are de-
clared to be slow, expensive and incffec-
tive, and would give the commission the
right to revoke the license of a dealer.
issuer or salesman. for such causes as are
set out in the act, and provide that any
applicant whose Incense has been can
celed may appeal to the Circuit or Su
periOr Courts OF the State.
Power TO examine into the physical
assets, effects and holdings of any appli-
cant, the right to employ accountants
TO examine the books of any applicant
and provision that all costs Of such ex-
aminations shall be paid by applicants,
are included in the amendments.
Stocks listed on the New York Stock
Exchange and securities Of corporations
organized exclusively for charitable. fra
ternal or benevolent purposes would be
made exempt from the rulings Of the
measure
Extension Of the statute Of limitations
for violations Of the criminal provisions
OF the act from one year to two years
also are included,
DIVIDEND RAISED Zee. 1865
TO PER CENT.
The amendments also provide that
security which has been placed in es
crow because Of the fact that the secur-
ity was issued in payment Of 4 patent
right, copyright. trademark or good
win or for promotion fees or expenses.
shall remain in escrow until the stock
holders who have paid for their stock
have received a dividend Of not less than
q per cent instead Of per cent, as pro-
vided in the present law.
The amendments will also provide that
in case of dissolution OF iusslveney of
an Incorporation during such time az the
securities are held In escrow. that the
owners thereof shall not share In the
distribution Of the assets.
Several exemptions, which under the
present law are practically fndennabIe.
are eliminated entirely by the amend
ments.
The commission. under the amend
ments, would be given the right to en-
ploy all help necessary TO carry out the
provisions of the act, provided, how
ever, that all expenses OF the depart
ment must be paid out Of the depart
ment's receipts.
Mr.. Mendenhan stated that biologists
or accountants viii not be retained by
the department, but that they would be
hired as they are needed.