2023 Louisiana Laws › Revised Statutes › Title 22 - Insurance › §22:88. Sales of stock

RS 22:88 - Sales of stock
A.(1) All sales of stock as defined in this Section shall be made in accordance with the regulations contained in this Section.
(2) When used in this Section, the following terms shall have the following respective meanings:
(a)(i) "Security" as used in this Section shall include any insurance stock, note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest, or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate, or certificate of deposit for security, any certificate of deposit, or group or index of securities, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing issued by an insurance company, an investment, or holding company with a stated purpose, either by charter or prospectus, of forming an insurance company.
(ii) For the purposes of this Section, security shall not mean any insurance or endowment policy or annuity contract under which any insurance company promises to pay a fixed number of dollars either in a lump sum or periodically for life or some other specified period nor any variable life or annuity contract as provided for in and regulated by this Title and issued by a life insurance company licensed to do business in the state of Louisiana.
(b) "Person" shall include a natural person, a corporation created under the laws of this state, or of any other state, country, sovereignty, or political subdivision thereof, a partnership, an association, a joint stock company, and any unincorporated association or organization.
(c) "Sale" or "sell" shall include every disposition, or attempt to dispose of a security as defined in this Section or interest in such a security for value. Any security as defined in this Section given or delivered with, or as a bonus on account of, any purchase of such securities or any other thing, shall be conclusively presumed to constitute a part of the subject of such purchase and to have been sold for value. "Sale" or "sell" shall also include an exchange, an attempt to sell, an option of sale, a solicitation of a sale, a subscription of an offer to sell, directly or by an agent, or a circular, letter, advertisement, or otherwise, except an isolated transaction in which any security as defined in this Section is sold, offered for sale or delivery by the owner not being made in the course of repeated and successive transactions of a like character by such owner, provided the owner is not the underwriter of such security.
(d) "Dealer" shall include every person, or investment counsel or investment counselor, as those terms are generally used, other than a salesman, as hereinafter defined, who in this state engages either for all or part of his time, directly or through an agent in the business of selling any securities as defined in this Section issued by another person or purchasing or otherwise acquiring such securities from another for the purpose of re-selling them or of offering them for sale to the public, or offering, buying, selling, or otherwise dealing or trading in such securities as principal or agent for a commodity or commission or at a profit, or who deals in futures or differences in market quotations of prices or values of any such securities; however, the word "dealer" shall not include a person having no place of business in this state who sells or offers to sell securities exclusively to brokers or dealers actually engaged in buying and selling such securities as a business.
(e) "Issuer" shall mean and include every person who proposes to issue, has issued or who shall hereafter issue any security as defined in this Section. Any person who acts as a promoter for and on behalf of a corporation, unincorporated association, or partnership of any kind, formed or to be formed, shall be deemed to be an issuer.
(f) "Salesman" shall include every natural person, including producers, other than a dealer, employed or appointed or authorized by a dealer or issuer to sell securities as defined in this section in any manner in this state. The partners of a partnership and the executive officers of a corporation or other corporate entity or association registered as a dealer shall not be salesmen within the meaning of this definition.
(g) "Broker" shall mean dealer as defined in this Subsection.
(h) "Agent" shall mean salesman as defined in this Subsection.
(i) "Commissioner" shall mean the commissioner of insurance of the state of Louisiana.
B. Exempt securities. Except as hereinafter otherwise expressly provided, the provisions of this Section shall not apply to any of the following classes of securities:
(1) Securities appearing in any list of securities dealt in on the New York or American Stock Exchange, and which securities have been so listed pursuant to official authorization by such exchange, and also all securities senior to any securities so listed, or represented by subscription rights which have been so listed or evidences of indebtedness guaranteed by companies, any stock of which is so listed, such securities to be exempt only so long as such listing shall remain in effect. The commissioner shall have the power to deny this exemption with reference to any particular security listed on any such exchanges, by order published in such manner as the commissioner shall find proper.
(2) Securities appearing in any list of securities dealt in on any other recognized and responsible stock exchange which has been previously approved by the commissioner, and which securities have been so listed pursuant to official authorization by such exchange, and also all securities senior to any securities so listed, or represented by subscription rights which have been so listed, or evidences of indebtedness guaranteed by companies any stock of which is so listed, such securities to be exempt only so long as such listing shall remain in effect. The commissioner shall have power at any time to withdraw approval theretofore granted by him to any exchange, and upon such withdrawal no security listed on such exchange shall be entitled to the benefit of such exemption, unless such security is also listed upon an exchange mentioned in Paragraph (1) of this Subsection, and has not been denied this exemption by the commissioner as provided in Paragraph (1).
(3) Any security, other than common stock, providing for a fixed return which has been outstanding and in the hands of the public for a period of not less than five years, upon which no default in payment of principal or failure to pay the return fixed, has occurred for a continuous immediately preceding period of five years.
C.(1) Except as hereinafter expressly provided, the provisions of this Section shall not apply to the sale of any security in any of the following transactions:
(a) At any judicial, executor's, administrator's, tutor's, curator's, or liquidator's sale, or at any sale by a receiver, syndic, or trustee in insolvency or bankruptcy.
(b) By or for the account of a pledge holder or mortgagee selling or offering for sale or delivery in the ordinary course of business, and not for the purpose of avoiding the provisions of this Section, to liquidate a bona fide debt, a security pledged in good faith as security for such debt.
(c) An isolated transaction in which any security is sold, offered for sale, subscription, or delivery by the owner thereof, or by his representative for the owner's account, such sale or offer for sale, subscription, or delivery not being made in the course of repeated and successive transactions of a like character by such owner, or on his account by such representative, and such owner or representative not being the underwriter of such security.
(d) The distribution by a corporation, actively engaged in the business authorized by its charter, of securities to its stockholders or other security holders as a stock dividend or other distribution out of earnings or surplus; or the issuance of securities to the security holders or other creditors of a corporation in the process of a bona fide reorganization or liquidation of such corporation made in good faith and not for the purpose of avoiding the provisions of this Section, either in exchange for the securities of such security holders or claims of such creditors or partly for cash and partly in exchange for the securities or claims of such security holders or creditors; or the issuance of additional capital stock of a corporation sold or distributed by it among its own stockholders exclusively, where no commission or other remuneration is paid or given directly or indirectly in connection with the sale or distribution of such increased capital stock.
(e) The transfer or exchange by one corporation to another corporation of their own securities in connection with a consolidation or merger of such corporations, or in the exchange of outstanding shares for a greater or smaller number of shares of the same corporation.
(f) The sale, transfer, or delivery of any securities to any bank, savings institution, trust company, insurance company, or to any corporation or to any broker or dealer; provided, that such broker or dealer is actually engaged in buying and selling securities as a business.
(g) The sale by a registered dealer, acting either as principal or agent, of securities theretofore sold and distributed to the public, provided that:
(i) Such securities are sold at prices reasonably related to the current market price thereof at the time of sale, and if such registered dealer is acting as agent, the commission collected by such registered dealer on account of the sale thereof is not in excess of usual and customary commissions collected with respect to securities and transactions having comparable characteristics; and
(ii) Such securities do not constitute an unsold allotment to or subscription by such dealer as a participant in the distribution of such securities by the issuer or by or through an underwriter; and
(iii) Either Moody's, Standard and Poor's, or Fetch securities manuals, or any other recognized securities manuals approved by the commissioner of insurance, contain the names of the issuer's officers and directors, a balance sheet of the issuer as of a date not more than eighteen months prior to the date of such sale, and a profit and loss statement for either the fiscal year preceding that date or the most recent year of operations.
(2) The commissioner may revoke the exemption afforded by this Subsection with respect to any securities by issuing an order to that effect if he finds that the further sale of such securities in this state would work or tend to work a fraud on purchasers thereof.
D.(1) No insurance securities or securities in an investment or holding company with a stated purpose, either by charter or prospectus, of forming an insurance company shall be sold within this state unless such securities have been registered as hereinafter defined. Registration of stocks as defined in this Section, shall be deemed to include the registration of rights to subscribe to such stock if the statement under Subsection E of this Section required for registration of such stock includes any provision that such rights are to be issued. A record of the registration of insurance securities or securities in an investment or holding company as defined in Subsection A of this Section shall be kept in a register of securities to be kept in the office of the commissioner, in which register shall also be recorded any orders entered by the commissioner with respect to such securities. Such registration, and all information with respect to the securities registered in accordance with this Section, shall be open to public inspection.
(2) The commissioner of insurance shall have the right to adopt such rules and regulations as he may deem necessary to carry out the purposes of this Section.
(3) The commissioner of insurance may take depositions, compel production of books and records, subpoena witnesses or documentary evidence, administer oaths, and examine under oath any individual relative to the sale of securities as defined in this Section. Any person who testifies falsely or makes any false affidavit during the course of such an examination under this Section shall be guilty of perjury.
E.(1) Securities as defined in this Section shall be registered by the filing of the issuer, or of any dealer registered with the office of the commissioner of insurance, in the office of the commissioner with respect to such securities of the following:
(a) Name of issuer, location, and, if incorporated, place of incorporation.
(b) A brief description of the security, including amount of the issue.
(c) Amount of securities to be offered in the state.
(d) The par value, the price at which the securities are to be offered for sale to the public, and a statement as to how the proceeds are to be used, including commissions to be paid, which commissions, however, shall in no event exceed fifteen percent.
(e) A copy of the circular or prospectus to be used by the issuer or dealer for the public offering.
(f) Any other information or documents required by the commissioner of insurance.
(2) Every statement required to be filed with the commissioner under any of the provisions of this Section shall be transmitted by United States mail, and the commissioner shall never receive nor shall he be authorized to receive or accept for filing any statement or documents transmitted to him by any mode other than by United States mail.
(3) The filing of such statement and documents in the office of the commissioner, and the payment of the fee provided for in this Subsection shall, after being authorized by the commissioner, constitute the registration of such securities. Upon such registration, such securities may be sold in this state by any registered dealer, subject, however, to the further order of the commissioner as provided in this Subsection. Every registration under this Section for an insurance company on primary issues of stock shall expire in accordance with the statutory provisions of R.S. 22:85. Every registration under this Section for an investment or holding company, or on issued and outstanding shares of stock of an insurance company, shall expire on December thirty-first of each year, but new registrations for the succeeding period or succeeding year, as the case may be, shall be issued upon written application and upon payment of the fee as provided in this Subsection.
(4) If, at any time in the opinion of the commissioner, the information contained in the statement, circular, or prospectus filed is, or has become, misleading, incorrect, inadequate, or incomplete, or the sale or offering for sale of the security as defined in this Section may work or tend to work a fraud, the commissioner may require from the person filing such statement such further information as may in his judgment be necessary to establish the classification of such security as claimed in said statement, or to enable the commissioner to ascertain whether other steps should be taken and the registration rejected or revoked on any ground specified in Subsection F of this Section and the commissioner may refuse to register or suspend the right to sell such security pending further investigation by entering an order specifying the grounds for such action, and by notifying by mail, or personally, or by telephone confirmed in writing, or by telegraph, the person filing such a statement and documents, and every registered dealer who shall have notified the commissioner of an intention to sell such security. The refusal to furnish information required by the commissioner within a reasonable time to be fixed by the commissioner may be a proper ground for the entry of such order of suspension. The commissioner shall notify every registered dealer of such order and upon the entry of any such order of suspension, no further sales of such security shall be made until the further order of the commissioner.
(5) In the event of the entry of such order of rejection or suspension, the aggrieved party may demand a prompt hearing in accordance with Chapter 12 of this Title, R.S. 22:2191 et seq. If no hearing is timely requested the commissioner shall enter a final order prohibiting sales of such security, with his findings with respect thereto. Until the entry of such final order, the rejection or suspension of the right to sell, though binding upon the persons notified thereof, shall be deemed confidential, and shall not be published, unless it shall appear that the order of suspension has been violated after notice. If, however, upon a hearing the division of administrative law shall find that the security being offered for sale will neither be fraudulent nor result in fraud, the commissioner shall forthwith enter an order revoking such order of suspension and such security shall be restored to its status as a security registered under this Section as of the date of such order of suspension.
(6) At the time of filing the statement and documents enumerated in this Subsection and upon re-registration, the applicant shall pay to the commissioner a fee of one-twentieth of one percent of the aggregate price of such securities to be sold in this state, for which the applicant is seeking registration, but in no case shall such fee be less than twenty-five dollars or more than two hundred dollars. The commissioner of insurance is authorized to withhold the funds collected under this Section to defray the expenses actually and necessarily incurred by him for salaries and expenses in carrying out the purposes of this Section.
F. Revocation of registration of securities as defined in this Section.
(1) The commissioner may revoke the registration of any security as defined in this Section by entering an order to that effect, with his findings in respect thereto, if upon the examination into the affairs of the issuer, it shall appear that the company:
(a) Is insolvent.
(b) Has violated any of the provisions of this Section, or any order of the commissioner of which such issuer has notice, or any of the rules and regulations adopted by the commissioner of insurance under this Section.
(c) Has been or is engaged or is about to engage in a fraudulent transaction.
(d) Is in any other way dishonest or has made any fraudulent representations in any prospectus or in any circular or other literature that has been distributed concerning the issuer or its securities.
(e) Is of bad business repute.
(f) Does not conduct its business in accordance with law.
(g) That the affairs of the insurance company or other company issuing such securities are in an unsound condition.
(h) That the enterprise or business or the security offered is not based upon sound business principles.
(2) In making such examination, the commissioner shall have access to and may compel the production of all the books and papers of such insurance company or other company issuing such securities, subpoena witnesses, and administer oaths to and examine the officers of such issuer, or any expert, whose statement was filed by any issuer in connection with an application, or any other person connected therewith as to its business and affairs, and may also require a balance sheet exhibiting the assets and liabilities of any such issuer or its income statement, or both, to be certified to by a public accountant either of this state, or of any other state approved by the commissioner. The commissioner may also require that any statement made on the authority of any expert be verified by another expert to be selected by the commissioner.
(3) Whenever the commissioner may deem it necessary, he may also require such balance sheets or income statements or statements of experts to be made more specific in such particulars as the commissioner of insurance shall point out, or to be brought down to the latest practicable date.
(4) If any issuer of securities as defined in this Section shall refuse to permit an examination to be made by the commissioner, or if it should refuse or fail to cause, at its own expense, any statement or valuation required to be made by an expert to be verified by another expert selected by the commissioner, it shall be proper ground for revocation of registration.
(5) If the commissioner shall deem it necessary, he may enter an order suspending the right to sell such securities pending any investigation provided that the order shall state the grounds for taking such action.
(6) Notice of the entry of such order shall be given by mail, or personally, or by telephone confirmed in writing, or by telegraph, to the issuer of such securities, which company shall in turn notify every registered dealer.
(7) If an order of revocation is entered, the aggrieved party may demand a prompt hearing in accordance with Chapter 12 of this Title, R.S. 22:2191 et seq. If a hearing is not timely requested, the commissioner shall enter a final order revoking the registration of the security, with his findings with respect thereto. However, if upon a hearing, the division of administrative law finds that the revocation of the security was not according to law, the commissioner shall enter an order revoking the order of revocation and such security shall be restored to its status as a security registered pursuant to this Section as of the date of the order of suspension.
G. Consent to service. Upon any application for registration where the issuer is not domiciled in this state, there shall be filed with such application the irrevocable written consent of the issuer that in suits, proceedings, and actions growing out of the violation of any provision of this Section, the service on the commissioner of any notice, process, or pleadings therein, authorized by law, shall be as valid and binding as if due service had been made on the issuer. Any such action shall be brought either in the parish of the plaintiff's domicile or in the parish of East Baton Rouge. Said written consent shall be authenticated by the seal of said issuer, if it has a seal, and by the acknowledged signature of a member of the co-partnership or company, or by the acknowledged signature of any officer of the incorporated or unincorporated association, if it be an incorporated or unincorporated association, duly authorized by resolution of the board of directors, trustees, or managers of the corporation or association, and shall in such case be accompanied by a duly certified copy of the resolution of the board of directors, trustees, or managers of the corporation or association authorizing the officers to execute same. In case any process or pleadings mentioned in this Section are served upon the commissioner, it shall be by duplicate copies, one of which shall be filed in the office of the commissioner and another immediately forwarded by the commissioner by registered mail to the principal office of the issuer against which said process or pleadings are directed.
H. Registration of dealers and salesmen.
(1) No dealer or salesman shall engage in business in this state as such dealer or salesman or sell any securities as defined in this Section unless he has been registered as a dealer or salesman in the office of the commissioner pursuant to the provisions of this Section.
(2) An application for registration, in writing, shall be sent by United States mail to the commissioner to be filed in the office of the commissioner in such form as the commissioner may prescribe, duly verified by oath, which shall state the principal place of business or office of the applicant, wherever situated, and the location of the principal office and all branch offices in this state, if any, the name or style of doing business, the names, residence, and business addresses of all persons interested in the business as principals, co-partners, officers, and directors, specifying as to each his capacity and title, the general plan and character of business, and the length of time the dealer has been engaged in business. The commissioner may also require such additional information as to the applicant's previous history, record, and association as he may deem necessary to establish the good repute in business of the applicant.
(3) There shall be filed by each dealer with such application for registration, where such dealer is not domiciled in this state, an irrevocable written consent of the dealer that in all suits, proceedings, or actions growing out of the violation of any provision of this Section, the service on the commissioner of any notice, process, or pleading therein authorized by the laws of this state, shall be as valid and binding as if due service had been made on the dealer. The place for bringing any such action and the manner in which the written consent shall be authenticated are the same as outlined in Subsection G of this Section.
(4) If the commissioner shall find that the applicant is of good repute and has complied with the provisions of this Section, including the payment of the fee provided for in this Subsection, he shall register such applicant as a dealer.
(5) Upon the written application of a registered dealer and general satisfactory showing as to good character and the payment of the proper fee, the commissioner shall register as a salesman of such dealer such natural person as the dealer may request. Such registration shall cease upon the termination of the employment of such salesman by such dealer.
(6) The names and addresses of all persons approved for registration as dealers or salesmen and all order with respect thereto shall be recorded in a register of dealers and salesmen kept in the office of the commissioner, which shall be open to public inspection. Every registration under this Section shall expire on December thirty-first of each year, but new registrations for the succeeding year shall be issued upon written application and upon payment of the fee as provided for in this Subsection without filing of further statements or furnishing any further information, unless specifically required by the commissioner. Applications for renewals must be made not less than thirty days nor more than sixty days before the first day of the ensuing year, otherwise they shall be treated as original applications.
(7) The fee for such registration and for each annual renewal shall be fifty dollars in the case of dealers and ten dollars in the case of salesmen. The commissioner of insurance is authorized to withhold the funds collected under this Section to defray the expenses actually and necessarily incurred by him for salaries and expenses in carrying out the purposes of this Section.
(8) Changes in registration occasioned by changes in the personnel of a partnership or in the principals, co-partners, officers, or directors of any dealer may be made from time to time by written application setting forth the facts with respect to such change.
(9) Any issuer of a security as defined in this Section required to be registered under the provisions of this Section, selling such securities except in exempt transactions as herein defined shall be deemed a dealer within the meaning of this Section and required to comply with all the provisions hereof.
I. Revocation of dealers' and salesmen's registration.
(1) Registration pursuant to Subsection H of this Section may be refused or any registration granted may be revoked by the commissioner if the commissioner determines that such applicant or registrant so registered has committed any of the following acts:
(a) Has violated any provision of this Section or any regulation made hereunder pursuant to this Section.
(b) Has made a material false statement in the application for registration.
(c) Has been guilty of a fraudulent act in connection with any sale of securities as defined in this Section, or has been or is engaged or is about to engage in making fictitious or pretended sales or purchases of any such securities or has been or is engaged or is about to engage in any practice or sale of such securities which is fraudulent or in violation of the law.
(d) Has demonstrated his unworthiness to transact the business of dealer or salesman.
(2) In cases of charges against a salesman, notice thereof shall also be given the dealer employing such salesman.
(3) The aggrieved party whose registration is refused or revoked may demand a hearing in accordance with Chapter 12 of this Title, R.S. 22:2191 et seq. Notwithstanding any law to the contrary, if a hearing is timely requested by the aggrieved party, the commissioner's order or act shall be stayed until the decision of the division of administrative law is issued. The commissioner may seek an expedited hearing before the division of administrative law to suspend the registration, pending the outcome of the main hearing.
(4) Until the entry of a final order by the division of administrative law, any suspension of such dealer's registration, though binding upon the persons notified thereof, shall be deemed confidential, and shall not be published unless it shall appear that the order of suspension has been violated after notice.
(5) In the event the commissioner determines to refuse or to revoke a registration as provided in this Subsection, he shall enter a final order herein with his findings on the register of dealers and salesmen; and suspension or revocation of the registration of a dealer shall also suspend or revoke the registration of all his salesmen.
(6) It shall be sufficient cause for refusal or cancellation of registration in case of a partnership or corporation or any unincorporated association, if any member of a partnership or any officer or director of the corporation or association has been guilty of any act or omission which would be cause for refusing or revoking the registration of an individual dealer or salesman.
J. Escrow agreement. If the statement containing information as to insurance securities which are required to be registered shall disclose that any such insurance securities shall have been or shall be intended to be issued for any organization or promotion fees or expenses, the amount and nature thereof shall be fully set forth and the commissioner may require that such insurance securities so issued in payment for organization or promotion fees or expenses shall be delivered in escrow to the commissioner or other depository satisfactory to the commissioner under an escrow agreement that the owners of such insurance securities shall not be entitled to withdraw such insurance securities from escrow until all other stockholders who have paid for their stock in cash shall have been paid a dividend or dividends aggregating not less than six percent, shown to the satisfaction of said commissioner to have actually been earned on the investment in any stock so held, and in case of dissolution or insolvency during the time such insurance securities are held in escrow, the owners of such insurance securities shall not participate in the assets until after the owners of all other securities shall have been paid in full.
K. Injunctions.
(1) Whenever it shall appear to the commissioner, either upon complaint or otherwise, that in the issuance, sale, promotion, negotiation, advertisement, or distribution of any securities as defined in this Section within this state, any person has committed any of the following acts, the commissioner may investigate and, upon evidence satisfactory to him, may, in addition to any other remedies, bring action in the name and on behalf of the state of Louisiana against such person and any other person or persons concerned in or in any way participating in or about to participate in such fraudulent practices or acting in violation of this Section, to enjoin such person and such other person or persons from continuing such fraudulent practices or engaging therein or doing any act or acts in furtherance thereof, or in violation of this Section:
(a) Has employed or employs, or is about to employ any device, scheme, or artifice to defraud or for obtaining money or property by means of any false pretense, representation, or promise.
(b) Has made, makes, or attempts to make in this state fictitious or pretended purchases or sales of securities as defined in this Section.
(c) Has engaged in or engages in or is about to engage in any practice or transaction or course of business relating to the purchase or sale of securities as defined in this Section:
(i) Which is in violation of law, or in violation of any of the rules and regulations adopted by the commissioner of insurance under this Section.
(ii) Which is fraudulent.
(iii) Which is operated, or which would operate, as a fraud upon the purchaser, any one or all of which devices, schemes, artifices, fictitious or pretended purchases or sales of securities as defined in this Section, practices, transactions, and courses of business are hereby declared to be and are referred to in this Section as fraudulent practices.
(d) Is acting as a dealer or salesman within this state without being duly registered as such dealer or salesman as provided in this Section.
(2) In any such court proceedings, the commissioner may apply for and on due showing be entitled to have issued the court's subpoena requiring forthwith: the appearance of any defendant and its employees, salesmen, or agents; the production of documents, books, and records as may appear necessary for the hearing of such petition; and testimony and evidence concerning the acts or conduct or things complained of in such application for injunction. In such action, the district court of the domicile of any of the persons, firms, or corporations involved, or the district court of the parish of East Baton Rouge shall have jurisdiction of the parties and the subject matter, and a judgment may be entered awarding such injunctive relief as may be proper.
L. Remedies. Every sale of securities as defined in this Section, the registration of which has been revoked or suspended by the commissioner, or made by any unregistered dealer or salesman, or by any dealer or salesman whose license has been suspended or revoked, shall be voidable at the election of the purchaser, and the person making such sale, and every director, officer, or agent of or for such seller who shall have personally participated or aided in any way in the making of such sales, shall be liable in solid to such purchaser upon tender of such securities sold, or of the contract made, for the full amount paid by such purchaser with interest, all taxable court costs and a reasonable attorney's fee to be fixed by the court; provided that no such action shall be brought for the recovery of the purchase price after thirteen months from the date of such sale, or the delivery of such security to the purchaser, whichever date is latest; and provided, further, that the aforesaid interest shall be computed at the rate of six percent per annum, less, in any case, the amount of any income from said insurance securities that may have been received by such purchaser.
M. Violations; penalties.
(1)(a) No issuer of securities as defined in this Section, or any officer, director, trustee, or agent thereof, or any dealer shall sell or offer to sell any such securities without full compliance with the provisions of this Section.
(b) Whoever violates this Paragraph shall be fined not more than five thousand dollars for the first offense and not more than twenty-five thousand dollars for each subsequent offense, and the officer, director, trustee or agent thereof, or the issuer, if a natural person, may be imprisoned for not more than one year, or both.
(2)(a) No person or corporation, whether acting on his or its own behalf, or on behalf of another, shall violate any of the provisions of this Section.
(b) Whoever violates this Paragraph shall be fined not less than one hundred dollars nor more than five hundred dollars for the first offense, and not less than five hundred dollars nor more than one thousand dollars for each subsequent offense, or imprisoned for not more than six months for the first offense, nor more than one year for each subsequent offense, or both.
(3)(a) No dealer or salesman shall make any statement or representation not authorized by the issuer, or by a dealer registering securities under the provisions of Subsection E of this Section, or any statement or representation at variance with, or not reasonably predicated upon, statements and documents filed by the issuer or dealer in the office of the commissioner.
(b) Whoever violates this Paragraph shall be fined not more than one thousand dollars for the first offense, and not more than five thousand dollars for each subsequent offense, or imprisoned for not more than six months for the first offense and for not more than one year for each subsequent offense, or both.
(4)(a) No person shall sign any statement, list, inventory, balance sheet, or other paper or document required by any provision of this Section to be verified or sworn to, knowing any representation therein contained to be false, misleading, or untrue, and the depositing of any such statement or document in the office of the commissioner shall be deemed prima facie evidence of knowledge of the falsity thereof or of any representation therein contained, and of the wilful signing of such statement or document.
(b) Whoever violates this Paragraph shall be guilty of perjury.
N. Statutory and civil remedies. Nothing in this Section shall limit any statutory or civil right of any person to bring action in any court for any act involved in the sale of securities as defined in this Section, or the right of this state to punish any person for any violation of any law. The attorney general and each of the district attorneys throughout this state, with regard to violations of this Section in their respective districts, shall lend full assistance to the commissioner in any investigations or prosecutions that the commissioner may deem necessary under the provisions of this Section.
O. Appeals. An appeal from the division of administrative law may be taken by the aggrieved person in accordance with Chapter 12 of this Title, R.S. 22:2191 et seq.
P. Fees.
(1) In the event that any issue of securities as defined in this Section is not registered for any cause by the commissioner, the commissioner is hereby authorized to withhold from the application fee the sum of twenty-five dollars to defray the expense actually and necessarily incurred by him for salaries and expenses in carrying out the purposes of this Section.
(2) In the event that the application of any dealer or salesman is for any cause not approved by the commissioner, the commissioner is hereby authorized to withhold from the application fee the sum of ten dollars in the case of a dealer and the sum of two and one-half dollars in the case of a salesman to defray the expenses actually necessarily incurred by him for salaries and expenses in carrying out the purposes of this Section.
Q. Construction. Nothing in this Section shall be construed to relieve insurance companies from making reports now or hereafter required by law to be made to the commissioner, or to any other state department or agency, or from paying the fees, taxes, and charges now or hereafter to be paid by insurance companies. This Section shall never be construed to repeal any law now in force regulating the organization of insurance companies in this state or the admission of any foreign insurance company, but the provisions of this Section shall be additional to any provisions otherwise regulating the business of insurance.
Acts 1958, No. 125. Amended by Acts 1958, No. 83, §§1, 3; Acts 1960, No. 164, §§1 to 3; Acts 1996, 1st Ex. Sess., No. 71, §1, eff. May 10, 1996; Redesignated from R.S. 22:76 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 317, §1; Acts 2009, No. 503, §1; Acts 2022, No. 185, §1.