Fraudulent Acts or Devices

  1. Law
  2. Tennessee Code
  3. Securities, Corporations and Associations
  4. Securities
  5. Tennessee Securities Act of 1980
  6. Fraudulent Acts or Devices

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  1. It is unlawful for any person, in connection with the offer, sale or purchase of any security in this state, directly or indirectly, to:
    1. Employ any device, scheme, or artifice to defraud;
    2. Make any untrue statement of a material fact or 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.
  2. It is unlawful for any person who receives any consideration from another person primarily for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise, in this state, to:
    1. Employ any device, scheme, or artifice to defraud the other person;
    2. Engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the other person; or
    3. Take or have custody of any securities or funds of any client except as the commissioner may by rule permit or unless the person is licensed as a broker-dealer under this part.
  3. It is unlawful for any person to make or cause to be made, in any document filed with the commissioner or in any proceeding under this part, 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.
  4. The commissioner may, after notice and opportunity for a hearing under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, impose a civil penalty against any person found to be in violation of this section, or any rule or order adopted or issued under this section, in an amount not to exceed ten thousand dollars ($10,000) per violation, or in an amount not to exceed twenty thousand dollars ($20,000) per violation if an individual who is a designated adult is a victim.


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