Washington University Law Review Volume 1974 Issue 3 January 1974 Interstate Scope of the Uniform Securities Act—A Case Analysis Follow this and additional works at: https://openscholarship.wustl.edu/law_lawreview Part of the Securities Law Commons Recommended Citation Interstate Scope of the Uniform Securities Act—A Case Analysis, 1974 WASH. U. L. Q. 421 (1974). Available at: https://openscholarship.wustl.edu/law_lawreview/vol1974/iss3/2 This Note is brought to you for free and open access by the Law School at Washington University Open Scholarship. It has been accepted for inclusion in Washington University Law Review by an authorized administrator of Washington University Open Scholarship. For more information, please contact [email protected]. NOTE INTERSTATE SCOPE OF THE UNIFORM SECURITIES ACT-A CASE ANALYSIS State securities laws, now in force in every state,1 generally impose 1. ALA. CODE tit. 53, §§ 28-65 (Cum. Supp. 1973); ALASKA STAT. §§ 45.55.010- .270 (1962, Supp. 1973); Auitz. REv. STAT. ANN. §§ 44-1801 to -2066.10 (1967, Supp. 1974); ARK. STAT. ANN. §§ 67-1235 to -1263 (1966, Supp. 1973); CAL. CORP. CODE 1 25000-804, 27000-203 (Deering 1962, Supp. 1974); COLO. REv. STAT. ANN. §§ 125- 1-1 to -1-29 (1963, Supps. 1965, 1969); CONN. GEN. STAT. REV. §§ 36-320 to -347 (1973); DEL. CODE ANN. tit. 6, §§ 7301-29 (1 BLUE SKY L. REP. 1 11,101-29 (July 23, 1973)); D.C. CODE ANN. §§ 2-2401 to -2418 (1973); FLA. STAT. ANN. §§ 517.01- .33 (1972, Supp. 1974); GA. CODE ANN. §§ 97-101 to -122, 97-9901 (Supp. 1973); HAWAII REV. STAT. §§ 485-1 to -25 (1968, Supp. 1973); IDAHO CODE §§ 30-1401 to -1462 (1967, Supp. 1973); ILL. ANN. STAT. ch. 121A, §§ 137.1-.19 (Smith-Hurd 1960, Supp. 1974); IND. CODE §§ 23-2-1-1 to -2-3 (1971); IOWA CODE ANN. §§ 502.1-.31 (1949, Supp. 1974); KAN. STAT. ANN. §§ 17-1252 to -1275 (1964, Supp. 1972); Ky. REV. STAT. §§ 292.310-.991 (1971, Supp. 1973); LA. REv. STAT. ANN. §§ 51:701-:720 (1965, Supp. 1974); ME. REv. STAT. ANN. tit. 32, §§ 751-881 (1964, Supp. 1973); MD. ANN. CODE art. 32A, §§ 13-44 (1971); MASS. ANN. LAWS ch. 110A, §§ 101-417 (Supp. 1974); MicH. STAT. ANN. §§ 19.776(101)-(418), 19.781-.784 (1964, Supp. 1974); MINN. STAT. ANN. §§ 80A.01-.31 (Supp. 1974); Miss. CODE ANN. §§ 75-71-1 to -57 (1972, Supp. 1973); Mo. REV. STAT. § 409.101-.418 (1969, Supp. 1973); MONT. REV. CODES ANN. §§ 15-2001 to -2025 (1967, Supp. 1973); NEB. REV. STAT. §§ 8-1101 to -1124 (1970); NEV. REV. STAT. §§ 90.010-.210 (1973); N.H. REV. STAT. ANN. §§ 421:1- :41 (1968, Supp. 1973); N.J. STAT. ANN. §§ 49:3-47 to -76 (1970, Supp. 1974); N.M. STAT. ANN. If 48-16-1 to -21, 48-18-16 to -35 (1966, Supp. 1973); N.Y. GEN. Bus. LAw 15 339 to 339-f, 352 to 359-h (McKinney 1968, Supp. 1973); N.C. GEN. STAT. §§ 78- 1 to -24 (1965, Supp. 1973); N.D. CENT. CODE §§ 10-04-01 to -20 (1960, Supp. 1973); OHIO REv. CODE ANN. §§ 1707.01-.99, 1708.01-.99 (Page 1964, Supp. 1973); OKLA. STAT. ANN. tit. 71, §§ 1-504 (1965, Supp. 1973); ORE. REv. STAT. §§ 59.005-.995 (1973); PA. STAT. ANN. tit. 70, §§ 1-101 to -704 (Supp. 1974); P.R. LAWS ANN. tit. 10, if 851-95 (Supp. 1973); R.I. GEN. LAws ANN. §§ 7-11-1 to -30 (1969); S.C. CODE ANN. H§ 62-1 to -319 (1962, Supp. 1973); S.D. CoMPILED LAws ANN. §§ 47-31-1 to -146 (1967, Supp. 1974); TENN. CODE ANN. §§ 48-1601 to -1651 (1964, Supp. 1973); TEx. REv. Cirv. STAT. ANN. arts. 581-1 to -39 (1964, Supp. 1974); UTAH CODE ANN. If 61-1-1 to -30 (1968, Supp. 1973); VT. STAT. ANN. tit. 9, §§ 4201-41 (1970, Supp. 1974); VA. CODE ANN. §§ 13.1-501 to -527.3 (1973, Supp. 1974); WAH. REV. CODE ANN. 51 21.20.005-.940 (1961, Supp. 1973); W. VA. CODE ANN. §§ 32-1-101 to 4-418 (Supp. 1974); Wis. STAT. ANN. §§ 551.01-.69 (Spec. Pamphlet 1974); Wyo. STAT. ANN. If 17-117.1 to -117.29 (1965, Supp. 1973). For an analysis of the blue sky laws in force before the drafting of the Uniform Securities Act in 1956, see L. Loss & E. COWEI-rr, BLUE SKY LAw (1958) [hereinafter cited as Loss & CowETT]. A revised abridgment of the material in Loss & CowETrr 3-42, 180-244 may be found in I L. Loss, SEcuRmTEs REGULATION 23-107 (2d ed. 1961, Supp. 1969) [hereinafter cited as Loss]. The Uniform Securities Act has been adopted in whole or in major part in thirty- three jurisdictions: Alabama, Alaska, Arkansas, Colorado, Delaware, the District of 421 Washington University Open Scholarship 422 WASHINGTON UNIVERSITY LAW QUARTERLY [Vol. 1974:421 criminal penalties2 and civil liabilities upon anyone who offers4 or sells5 a security in the state in violation of the securities registration Columbia, Hawaii, Idaho, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michi- gan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, Puerto Rico, South Carolina, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. 1 BLuE SKY L. REP. %4901 (July 22, 1974). Hereinafter, citations will be made to the Uniform Securities Act rather than to the corresponding sections of the blue sky laws of these states. The entire text of the Uniform Act, along with the Official Comments of the National Con- ference of Commissioners on Uniform State Laws, may be found in the following sources: Loss & Cowrr 245-420 (draftsmen's commentary also included); 7 UNIFORM LAws ANNOTATED 691-795 (master ed. 1970, Supp. 1974); 1 BLUE S&Y L. REP. 4901-53 (1971). 2. E.g., UNIFoRM Sacumims Aar § 409; CAL. CORP. CODE § 25540 (Deering Supp. 1974); FiA. STAT. ANN. § 517.302 (1972); ILL. ANN. STAT. ch, 121%, § 137.14 (Smith-Hurd Supp. 1974); Onio REV. CODE ANN. §§ 1707.44(C), .99 (Page 1964); Tpx. REv. CMv STAT. ANN. art. 581-29.B (Supp. 1974). See generally 1 Loss 38-42; Loss & Cow=sr 21-26, 3 87-89. 3. E.g., UNIFoRM SncnRimns Acr §§ 410(a)(1), (b), modeled in part on Securi- ties Act of 1933 §§ 12(1), 15, 15 U.S.C. §§ 771(1), 77o (1970), and Securities Exchange Act of 1934 § 20(a), 15 U.S.C. § 78t(a) (1970); CAL. CORP. CODE §§ 25503-04 (Deer- ing Supp. 1974); FLA. STAT. ANN. § 517.21 (1972); ILL. ANN. STAT. ch. 1213a, § 137.13.A (Smith-Hurd Supp. 1974); Omo REV. CODE ANN. § 1707.43 (Page 1964); Tux. REV. Civ. STAT. ANN. art. 581-33.A(l) (1964). The blue sky laws of New Hamp- shire and Rhode Island do not expressly impose civil liability upon one who offers or sells a security in violation of the securities registration requirements of the laws. New York's Martin Act, which does not require the registration of securities, does not ex- pressly impose civil liability for offers or sales made in violation of the antifraud pro- visions or broker-dealer licensing requirements of the Act. For a discussion of implied liability under the laws of these states, and of other states before they adopted express liability provisions, see 3 Loss 1661-69; Loss & CowEIr 155-62; Toll, Civil Remedies of Purchasersof Securities Under New Hampshire Law, 15 N.H.BJ. 123 (1974). See generally 3 Loss 1631-82; Loss & CowErr 129-79, 389-95. 4. Mo. REv. STAT. § 409.401 (1969), following verbatim UNIFORM SECUTrrIS Acr § 401(j) (2), defines "offer" in broad terms, characteristic of most securities laws: When used in this act, unless the context otherwise requires: 0) (2) "Offer"-or "offer to sell" includes every attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security for value. This definition was modeled on Securities Act of 1933 § 2(3), 15 U.S.C. § 77b(3) (1970), formerly ch. 38, tit. I, § 2(3), 48 Stat. 74 (1933). Accord, CAL. CoRP. CODE 25017(b) (Deering Supp. 1974). See generally 1 Loss 181, 223-24, 512-46; Loss & Cownr= 343-48. 5. Mo. REv. STAT.. § 409.401(j) (1) (1969), following verbatim UNIFoRM SEtni- rrms Acr § 401(j) (1), provides that when used in the Act, unless otherwise required by context, "'[s]ale' or 'sell' includes every contract of sale of, contract to sell, or dispo- sition of, a security or interest in a security for value." This definition was modeled on Securities Act of 1933 § 2(3), 15 U.S.C. § 77b(3) (1970), formerly ch. 38, tit. I, § 2(3), 48 Stat. 74 (1933). Accord, CAL. CORP. CODE § 25017(a) (Deering Supp. 1974). Nine states define "sale" https://openscholarship.wustl.edu/law_lawreview/vol1974/iss3/2or "sell"-so as to encompass not only the above defini- Vol. 1974:421] INTERSTATE SCOPE requirements6 of the law. Most blue sky laws, however, contain no provision explicitly defining when an offer or sale is made "in the state."7 In the absence of such provisions, courts have resorted to a traditional choice-of-law sort of analysis to determine whether a given transaction having contacts with more than one state falls within the scope of a particular state's law.8 The constitutional power of the states tion of "sale" or "sell," but also the definition of "offer" or "offer to sell," note 4 supra, and do not define "offer" separately. E.g., FLA. STAT. ANN.§ 517.02(3) (1972); ILL.