Court Opinion

ID: 9715512
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:07:19.431204+00
Date Added: 2024-06-11T18:23:35.409157
License: Public Domain

Williams, C.J.
I concur generally in the result and rationale of the majority opinion and specifically in the decision reached in section II, but write separately to lend further support to the conclusion that the administrator cannot impose conditions on impoundments which become operative after the issuer receives the "specified amount” of proceeds.
As noted by the majority, the purpose of the particular provision at issue here, MCL 451.705(f)(2); MSA 19.776(305X0(2), is to ensure that the issuer has raised sufficient funds for a viable venture before the project is commenced and investors’ monies are expended. In addition, the general purpose of the act is to protect investors from fraudulent practices in the security "issuance, offer, sale or purchase” phase. Preamble to 1964 PA 265, MCL 451.501 et seq.; MSA 19.776(101) et seq. The act protects an investor who unknowingly relies on inaccurate information in choosing an investment, but does not protect an investor from an unwise or unfortunate management choice. To allow the administrator to impose conditions on impounded proceeds received from the sale of securities beyond the time at which the "specified amount” is accumulated would extend the administrator’s authority beyond the regulation of the issuance, offer, sale, and purchase of securities into the regulation of post-sale management choices. This would undermine the ability of *86investors such as the intervening defendants here to make private decisions regarding the terms of their investments in the wake of unforeseen investment risks. For these reasons, the conditions imposed on the escrow account here cannot be enforced by the administrator.