Evening star., 1933-03-30
Securities Act Analyzed
Former Commissioner Huston Thompson, Who
Helped Frame Proposed Federal Lesiglation,
Presents Explanation of Its Terms.

per cent Of the value Of the securities
will be charged for registration with
the commission.
Terms Of Section 6.
"Section empowers the commission
to revoke the registration of domestic
securities. Some of the grounds stated
are insolvency Of the issuer, violation
of the act, previous or present engage
ments in fraudulent transactions,
fraudulent representations in advertis-
ing the security.
Section 7 provides for judicial re-
view, In the event of an order Of rev.
,ocation by the commission by the
Court of Appeals of the District Of
Columbia.
Section prohibits the interstate
advertisement either written or spoken
of domestic and foreign securities sub
ject to this act unless the communica-
ton contains certain information con-
cerning the securities offered as re-
quired by the commission and the act.
Copies of all such advertising material
must be filed with the commission and
the statement SO filed shall be available
for public inspection.
Section 8 assumes that all purchasers
rely upon the representations contained
in the statement and makes all the
signers Of such statement Jointly and
Severally liable to the purchasers for
damages In the event Of any material
Misrepresentation contained therein.
Misrepresentation in the statement or
advertising when made with the knowl-
edge of their falsity will subject the
signers to the Federal fraud and per-
jury laws.
Section 10 makes it unlawful to
represent that registration with the
commission constitutes the commission S
approval.
Section II exempts certain securi-
ties from the terms of the act such as
those issuing under the Federal Govern
ment and our States, or the sub
divisions Of the Federal or State GoV-
ernments.
Certain Exemptions.
Section u exempts certain trans
actions such as judicial sales and
isolated transactions by individuals.
Section l3 empowers the Attorney
General at the request Of the commits
sion to prosecute for fraud in the inter-
state offer or sale of securities. The
exemptions of Sections IL and IL are
not applicable to this provision. -
oeCtlOIl IA declares lIlaC II Snail De
a Federal offense to transmit or offer
in Interstate commerce securities that
do not meet the requirements of the
State in which they are to be sold.
This is an application to the sale of
securities similar to that applied under
the Webb-Kenyon law to the prohibi-
ton against the sale and transporta-
ton of liquor into dry States. In this
section also it is specifically provided
that the exemptions Of sections IL and
II do not apply.
Section Is empowers the commits
sion to make necessary rules and reg
UlationS.
Section 16 gives jurisdiction to the
Federal district courts to inforce the
criminal provisions of the act and the
various orders of the commission.
Section II provides the penalty of
not more than $4,000 or five years in
Jail, or both, for any officers, director,
or agent of any corporation knowingly
participating in the violation and con-
viction under this act.
An appropriation clause follows"
The last sentence above referred to
appropriations for administering the
act, but no sum was mentioned in the
analysis. The summary given was made
available in the Senate by Robinson of
Arkansas, the Democratic leader.