Opinion ID: 1805283
Heading Depth: 2
Heading Rank: 2

Heading: The Estate's Securities-Act Claims (Counts 11 and 12)

Text: In her complaint, Gaynell also asserted that the Cadaret defendants violated § 8-6-17(a), Ala.Code 1975, a part of the Alabama Securities Act, Ala.Code 1975, § 8-6-1 et seq. (the Securities Act); § 8-6-17(a) provides: (a) It is unlawful for any person, in connection with the offer, sale, or purchase of any security, directly or indirectly, to: (1) Employ any device, scheme, or artifice to defraud; (2) Make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading; or (3) Engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person. (Emphasis added.) The civil remedy provided by the Securities Act is found at § 8-6-19, which provides, in pertinent part: (a) Any person who: (1) Sells or offers to sell a security in violation of any provision of this article or of any rule or order imposed under this article or of any condition imposed under this article, or (2) Sells or offers to sell a security by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, the buyer not knowing of the untruth or omission, and who does not sustain the burden of proof that he did not know and in the exercise of reasonable care could not have known of the untruth or omission,  is liable to the person buying the security from him who may bring an action to recover the consideration paid for the security, together with interest at six percent per year from the date of payment, court costs and reasonable attorneys' fees, less the amount of any income received on the security, upon the tender of the security, or for damages if he no longer owns the security. Damages are the amount that would be recoverable upon a tender less the value of the security when the buyer disposed of it and interest at six percent per year from the date of disposition. (b)(1) Any person who engages in the business of advising others, for compensation, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities in violation of subsection (b), (c), (d), (e), or (f) of Section 8-6-17, subsection (b) or (c) of Section 8-6-3, Section 8-6-14, is liable to that person, who may bring an action to recover the consideration paid for such advice and any loss due to such advice, together with interest at six percent per year from the date of payment of the consideration plus costs and reasonable attorney's fees, less the amount of any income received from such advice. . . . . (2) Any person who receives ... any consideration from another person for advice as to the value of securities or their purchase or sale ... and employs any device, scheme, or artifice to defraud such other person or engages in any act, practice, or course of business which operates or would operate as a fraud or deceit on such other person, is liable to that person, who may bring an action to recover the consideration paid for such advice and any loss due to such advice, together with interest at six percent per year from the date of payment of the consideration plus costs and reasonable attorney's fees, less the amount of any income received from such advice. (Emphasis added.) The theory of Gaynell's cause of action is that the defendants wrongfully took and withheld from Rowena or her estate the assets of the Lord Abbett IRA and of the Scudder account. Gaynell did not assert any claims by which she sought to recover consideration that Rowena paid for a security that was offered or sold to Rowena in violation of the Securities Act. Furthermore, Gaynell did not assert claims by which she sought to recover consideration that Rowena paid for advice that violated the Securities Act, or any loss Rowena or the estate suffered due to any such advice. Gaynell's claims do not arise under the Securities Act. As a result, the trial court did not err when it entered a summary judgment on those claims.