The Alabama Uniform Securities Act, and specifically, Ala. Code 8-6-17, relating to “Prohibited acts regarding offer, sale, or purchase of securities,” provides that:
(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.
(b) It is unlawful for any person who receives, directly or indirectly, any consideration from another person 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,
(1) to employ any device, scheme, or artifice to defraud the other person,
(2) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the other person,
(3) acting as principal for his own account, knowingly to sell any security to or purchase any security from a client, or acting as broker for a person other than such client, knowingly to effect any sale or purchase of any security for the account of such client, without disclosing to such client in writing before the completion of such transaction the capacity in which he is acting and obtaining the consent of the client to such transaction. The prohibitions of this subdivision shall not apply to any transaction with a customer of a dealer if such dealer is not acting as an investment adviser in relation to such transaction; or
(4) to engage in dishonest or unethical practices as the commission may define by rule.
(c) In the solicitation of advisory clients, it is unlawful for any person to make any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading.
(d) Except as may be permitted by rule or order of the commission, it is unlawful for any investment adviser to enter into, extend, or renew any investment advisory contract unless it provides in writing,
(1) that the investment adviser shall not be compensated on the basis of a share of capital gains upon or capital appreciation of the funds or any portion of the funds of the client;
(2) that no assignment of the contract may be made by adviser without the consent of the other party to the contract; and
(3) that the investment adviser, if a partnership, shall notify the other party to the contract of any change in the membership of the partnership within a reasonable time after the change.
(e) Subdivision (d)(1) does not prohibit an investment advisory contract which provides for compensation based upon the total value of a fund averaged over a definite period, or as of definite dates or taken as of a definite date. “Assignment,” as used in subdivision (d)(2), includes any direct or indirect transfer or hypothecation of an investment advisory contract by the assignor or of a controlling block of the assignor’s outstanding voting securities by a security holder of the assignor; but, if the investment adviser is a partnership, no assignment of an investment advisory contract is considered to result from the death or withdrawal of a minority of the members of the investment adviser having only a minority interest in the business of the investment adviser, or from the admission to the investment adviser of one or more members who, after admission, will be only a minority of the members and will have only a minority interest in the business.
(f) It is unlawful for any investment adviser to take or have custody of any securities or funds of any client if,
(1) the commission by rule prohibits custody; or
(2) in the absence of rule, the investment adviser fails to notify the commission that he has or may have custody.
The Alabama Uniform Securities Act, Ala. Code 8-6-17.
The Alabama Uniform Securities Act, Ala. Code 8-6-19, with respect to the “Civil liabilities of sellers, agents, etc.; and remedies of purchasers, provides that:
(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.
Ala. Code 8-6-19 Civil liabilities of sellers, agents, etc.; remedies of purchasers. (Code Of Alabama (2016 Edition)).
While there is no assurance that any client in an FINRA Securities Arbitration will obtain a recovery, or obtain a favorable award at the time of hearing for stock fraud or investment fraud, or other stockbroker misconduct, The Guiliano Law firm has represented hundreds of clients, and has recovered tens of millions of dollars for defrauded investors in securities disputes in FINRA Securities Arbitrations.
In Alabama, FINRA Arbitration hearings are held in Birmingham
Under the FINRA Code of Arbitration Procedure, the FINRA Securities Arbitration hearing locations will selected based upon the hearing location closest to your residence at the time of the events giving rise to the dispute.
Other Alabama Resources
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AboutNicholas Guiliano, Esq.
Nicholas J. Guiliano has more than 25 years of securities related experience, and has represented more than 1,000 public customers in claims against brokerage firms for fraud in connection with the sale of securities principally in arbitration before the Financial Industry Regulatory Authority (“FINRA”) Dispute Resolution, Inc. (formerly known as The National Association of Securities Dealers (“NASD”) Dispute Resolution, and the New York Stock Exchange (“NYSE”) Department of Arbitration.LEARN MORE