Court Opinion

ID: 9764234
Source: CourtListenerOpinion
Date Created: 2023-08-29 03:16:27.95668+00
Date Added: 2024-06-11T07:29:55.162864
License: Public Domain

Weintraub, C. J.
(concurring). I concur in the result but not without difficulty.
The Securities Act of 1933; 15 U. S. C. A. § 77a et seq., deals with interstate offerings and seeks to assure full “disclosure” with respect to them. The federal statute does not deal with the “merits” or substance of the proposed sale. The stock offered may be worthless, or the promoters may seek an inordinate gain at the expense of purchasers, but if the disclosure is full, the federal act is satisfied. This is so notwithstanding that the average purchaser is hardly able to comprehend the terms and to make a judgment upon them. It remains for the several States to deal with the problem of overreaching or defrauding of the purchasers.
The Uniform Securities Act, 7 Uniform Laws Ann. p. 691, provides for “substantive” review of the merits of stock offerings, both interstate and intrastate. As the opinion of the Court indicates, the Uniform Act was seriously amended in our Legislature, before it was enacted. The question is whether the amendments eliminated “substantive” review as to an interstate offering which passed muster as to “disclosure” under the federal statute. The amendments, which did not make that purpose plainly visible, *169could nonetheless be found to lead to that result as the opinion' of the Court concludes.
In reaching its conclusion, the opinion of the Court relies in part upon material submitted by the amicus curiae revealing conversations within the interested association and converations by its representatives with the Attorney General. The opinion of the Court notes that it was asserted in that material that substantive review at the State level would in part be duplicative of the federal process. But that proposition was inaccurate. State action would thus be “duplicative” as to interstate offerings only if the State dealt with “disclosure,” for, as noted above, the federal statute deals with that facet. But “substantive” review of interstate offerings would not “duplicate” the action of the federal agency, for, as we have said, the federal agency is not concerned with that subject. However, it is true that the material submitted by the amicus curiae reveals that thereafter the Attorney General said he was concerned only with intrastate offerings, and representatives of the industry, upon being so advised, sought to fashion amendments to that end. Some remaining language in the statute refers to interstate offerings, thus suggesting such offerings would be subject to substantive review by the State agency. Other explanations are advanced to us to account for that residual language, but none is unequivocal.
One can understand a purpose to deal only with “dis-cloure” with respect to intrastate offerings, thus paralleling the limited federal action as to interstate offerings. But if “substantive” review as to intrastate offerings is worthwhile, it is not clear why the State should decline thus to protect its residents with respect to interstate offerings. Indeed we are told that intrastate offerings are but a handful.1
*170Although I cannot say with conviction that the opinion of the Court incorrectly reads the legislative record and its end-product, I think it should be made clear that in this important area of consumer protection, the contribution made by the statute, as interpreted by us today, is quite puny.
Mr. Justice Jacobs joins in this concurring opinion.
For reversal — Chief Justice Weintraub, Justices Jacobs, Hale and Mountain, and Judges Coneorb and Lewis — 6.
For affirmance — None.

When he signed the bill into law, the Governor seemed to speak more expansively:
“Finally, Senate Bill No. 327 revises the State Uniform Securities Daw and for the first time requires the filing of registration state*170ments prior to the sale of securities to the public. This measure, I am certain, will be of great assistance in protecting the public, particularly the unsophisticated buyer of securities, so that he may be fully alerted to any risks involved in such purchases.”