Code of Alabama

Ala. Code § 8-6-19 (2026)

Civil Liabilities of Sellers, Agents, Etc.; Remedies of Purchasers.

✓ official Alabama Legislature (ALISON) text, current July 2026

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(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.

(b)(1) Any person who engages in the business of advising others, for compensation, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities in violation of subsection (b), (c), (d), (e), or (f) of Section 8-6-17, subsection (b) or (c) of Section 8-6-3, Section 8-6-14, is liable to that person, who may bring an action to recover the consideration paid for such advice and any loss due to such advice, together with interest at six percent per year from the date of payment of the consideration plus costs and reasonable attorney’s fees, less the amount of any income received from such advice.

No person may maintain an action hereunder pursuant to a violation of subsection (c) of Section 8-6-3 based solely on the fact that an investment adviser representative other than the one from whom the person received advice is unregistered.

(2) Any person who receives, directly or indirectly, any consideration from another person for advice as to the value of securities or their purchase or sale, whether through the issuance of analyses, reports, or otherwise and employs any device, scheme, or artifice to defraud such other person or engages in any act, practice, or course of business which operates or would operate as a fraud or deceit on such other person, is liable to that person, who may bring an action to recover the consideration paid for such advice and any loss due to such advice, together with interest at six percent per year from the date of payment of the consideration plus costs and reasonable attorney’s fees, less the amount of any income received from such advice.

An action based on a violation of subsection (c) of Section 8-6-17 and this section may not prevail where the person accused of the violation sustains the burden of proof that he did not know, and in the exercise of reasonable care, could not have known of the existence of the facts by reason of which the liability is alleged to exist.

(c) Every person who directly or indirectly controls a person liable under subsections (a) or (b) of this section, including every partner, officer, or director of such a person, every person occupying a similar status or performing similar functions, every employee of such a person who materially aids in the conduct giving rise to the liability, and every dealer or agent who materially aids in such conduct is also liable jointly and severally with and to the same extent as the person liable under subsection (a) or (b), unless he is able to sustain the burden of proof that he did not know, and in exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist.

(d) Any tender specified in this section may be made at any time before entry of judgment.

(e) Every cause of action under this section survives the death of any person who might have been a plaintiff or defendant.

(f) No person may obtain relief under this section in an action involving the failure to register unless suit is brought within two years from the date of sale. All other actions for relief under this section must be brought within the earlier of two years after discovery of the violation or two years after discovery should have been made by the exercise of reasonable care. No person may bring an action under subsection (a) of this section:

(1) If the buyer received a written offer, before the action and at a time when he owned the security, to refund the consideration paid together with interest at six percent per year from the date of payment, less the amount of any income received on the security, and he failed to accept the offer within 30 days of its receipt, or

(2) If the buyer received such an offer before the action and at a time when he did not own the security, unless he rejected the offer in writing within 30 days of its receipt.

(g) No person who has made or engaged in the performance of any contract in violation of any provision of this article or any rule or order hereunder or who has acquired any purported right under any such contract with knowledge of the facts by reason of which its making or performance was in violation, may base any action on the contract.

(h) Any condition, stipulation, or provision binding any person acquiring any security or receiving any investment advice to waive compliance with any provision of this article or any rule or order hereunder is void.

(i) The rights and remedies provided by this article are in addition to any other rights or remedies that may exist.

(j)(1) The commission may by order, if it finds such order to be in the public interest, impose an administrative assessment upon any person who violates any provision of this article or any rule or order issued under this article.

(2) Any administrative assessment imposed under this section shall not exceed $5,000 for each act or omission that constitutes the basis for an order issued under this section, except that the amount of the administrative assessment may not exceed $50,000 for any person subject to the order.

(3) For the purposes of determining the amount or extent of an administrative assessment, if any, to be imposed under this section, the commission shall consider among other factors, the frequency, persistence, and willfulness of the conduct constituting a violation of any provision of this article or any rule or order issued under this article, and the number of persons adversely affected by the conduct.

(4) The administrative assessment under this section is in addition to any other penalty, remedy, or sanction that may be imposed under this article.

(5) All assessments collected under this subsection (j) of Section 8-6-19 shall be deposited in the general fund of the state.

(k)(1) The commission may charge, in addition to any administrative assessment, fine, penalty, remedy, or sanction imposed under this article, the actual cost of any investigation resulting from any violation of any provision of this article or any violation of any rule or order issued under this article or the actual cost of any examination made by the commission pursuant to this article, to the party or parties subject to such investigation or examination. Such charge may include, but is not limited to, a per diem prorated upon the salary cost of any employee of the commission together with actual travel, housing and any and all other reasonable expenses incurred as a result of such investigation or examination.

(2) All charges assessed for costs involved pursuant to subdivision (1) of subsection (k) of Section 8-6-19 shall be deposited in the Alabama Securities Commission Fund in the State Treasury to be drawn upon by the commission for its use in the administration of this article.

(Acts 1959, No. 542, p. 1318, §18; Acts 1990, No. 90-527, p. 772, §1.)

Notes of Decisions

Cited in 44 cases (1 in the last 5 years), 1979–2022 · leading case: Banton v. Hackney, 557 So. 2d 807 (Ala. 1989).

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Banton v. Hackney, 557 So. 2d 807 (Ala. 1989). · cites it 18× “1986), § 8-6-19 is almost identical to § 410(b) of the Uniform Securities Act adopted in Alabama *816 in 1959.”

San Francisco Residence Club, Inc. v. Baswell-Guthrie, 897 F. Supp. 2d 1122 (N.D. Ala. 2012). · cites it 9× “Even so, Judge Kallon held that there was “no persuasive reason to extend secondary liability for securities violations, under Ala.Code § 8-6-19, to attorneys exercising their ‘traditional advisory role.”

Dgb, LLC v. Michael Hinds, 55 So. 3d 218 (Ala. 2010). · cites it 2× “” This Court has stated: “[A] claim of a violation of § 8-6-19(a)(2), Ala.Code 1975, requires (1) a sale or an offer to sell a security (2) by means of a false statement or omission (3) of material fact and (4) the ignorance of the buyer as to the untruth or omission.”

The Robert N. Clemens Trust v. Morgan Stanley Dw, Inc., 485 F.3d 840 (6th Cir. 2007). · cites it 2× “§ 48-2-121(a), which parallels the language in Rule 10b-5, and Ala.Code § 8-6-19. The district court granted Morgan Stanley’s motion, under Rule 12(b)(6), to dismiss Plaintiffs’ complaint.”

27001 P'ship v. Kohlberg Kravis Roberts & Co., 78 So. 3d 959 (Ala. 2011). · cites it 2× “First, citing § 8-6-19, Ala. Code 1975, 10 he contends that the ASA covers only initial public sales of securities by the owner or issuer of such securities.”

Vera Smith, as of the Est. of Robert J. Smith, Deceased v. Duff & Phelps, Inc., a Corp., & Claire v. Hansen, 891 F.2d 1567 (11th Cir. 1990). · cites it 3× “8 The limitations period *1571 for Ala.Code § 8-6-19(a)(l)-(2) is also two years.”

Ritch v. Robinson-Humphrey Co., 748 So. 2d 861 (Ala. 1999). · cites it 13× “Code 1975, § 8-6-19(a)(1), a portion of the Alabama Securities Act, for a violation of Rule 830-X-3-.”

First Fed. Sav. & Loan Ass'n v. Mortg. Corp., 467 F. Supp. 943 (N.D. Ala. 1979). · cites it 3× “Defendant contends that the bar of the Securities Law Claim is established whether the applicable limitations period is that of two years under the Alabama Blue Sky Law (Section 8-6-19, Code of Alabama 1975) or that of one year under Section 6-2-39, Code of Alabama 1975.”

Fed. Deposit Ins. Corp. v. First Horizon Asset Sec. Inc., 291 F. Supp. 3d 364 (S.D. Ill. 2018). · cites it 3× “Ala. Code § 8-6-19 (f). The FDIC extender statute extends FDIC's time to sue by three years from when it is appointed receiver, if that period is longer than the otherwise applicable period.”

Morgan Keegan Co., Inc. v. Cunningham, 918 So. 2d 897 (Ala. 2005). · cites it 4× “Section 8-6-19(a) provides, in pertinent part: “(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…”

Isenhower v. Morgan Keegan & Co., Inc., 311 F. Supp. 2d 1319 (M.D. Ala. 2004). · cites it 8× “Most of these cases were offered in support of Plaintiffs’ contention that an award of the attorneys’ fees, costs, and interest they sought pursuant to Alabama Code Section 8-6-19 was mandatory because they had established a violation of the Alabama Securities Act or Plaintiffs’…”

Altrust Fin. Servs., Inc. v. Adams, 76 So. 3d 228 (Ala. 2011). · cites it 2× “” 4 The civil remedy provided by the Act is found at § 8-6-19, Ala.Code 1975, which provides, in part, as follows: “(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…”

Show all 44 citing cases →

— Ala. Code § 8-6-19(a) — 13 cases

Ex Parte Ebbers, 871 So. 2d 776 (Ala. 2003).

Isenhower v. Morgan Keegan & Co., Inc., 311 F. Supp. 2d 1319 (M.D. Ala. 2004). “Most of these cases were offered in support of Plaintiffs’ contention that an award of the attorneys’ fees, costs, and interest they sought pursuant to Alabama Code Section 8-6-19 was mandatory because they had established a violation of the Alabama Securities Act or Plaintiffs’…”

San Francisco Residence Club, Inc. v. Baswell-Guthrie, 897 F. Supp. 2d 1122 (N.D. Ala. 2012). “Even so, Judge Kallon held that there was “no persuasive reason to extend secondary liability for securities violations, under Ala.Code § 8-6-19, to attorneys exercising their ‘traditional advisory role.”

Morgan Keegan Co., Inc. v. Cunningham, 918 So. 2d 897 (Ala. 2005). “Section 8-6-19(a) provides, in pertinent part: “(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…”

Altrust Fin. Servs., Inc. v. Adams, 76 So. 3d 228 (Ala. 2011). “” 4 The civil remedy provided by the Act is found at § 8-6-19, Ala.Code 1975, which provides, in part, as follows: “(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…”

— Ala. Code § 8-6-19(a)(1) — 2 cases

Ritch v. Robinson-Humphrey Co., 748 So. 2d 861 (Ala. 1999). “Code 1975, § 8-6-19(a)(1), a portion of the Alabama Securities Act, for a violation of Rule 830-X-3-.”

Ryder v. Mabry, 68 So. 3d 169 (Ala. Civ. App. 2010).

— Ala. Code § 8-6-19(a)(2) — 5 cases

Dgb, LLC v. Michael Hinds, 55 So. 3d 218 (Ala. 2010). “” This Court has stated: “[A] claim of a violation of § 8-6-19(a)(2), Ala.Code 1975, requires (1) a sale or an offer to sell a security (2) by means of a false statement or omission (3) of material fact and (4) the ignorance of the buyer as to the untruth or omission.”

Banton v. Hackney, 557 So. 2d 807 (Ala. 1989). “1986), § 8-6-19 is almost identical to § 410(b) of the Uniform Securities Act adopted in Alabama *816 in 1959.”

Foster v. Jesup & Lamont Sec. Co., 759 F.2d 838 (11th Cir. 1985).

Ryder v. Mabry, 68 So. 3d 169 (Ala. Civ. App. 2010).

— Ala. Code § 8-6-19(a)(l) — 2 cases

Vera Smith, as of the Est. of Robert J. Smith, Deceased v. Duff & Phelps, Inc., a Corp., & Claire v. Hansen, 891 F.2d 1567 (11th Cir. 1990). “8 The limitations period *1571 for Ala.Code § 8-6-19(a)(l)-(2) is also two years.”

Ryder v. Mabry, 68 So. 3d 169 (Ala. Civ. App. 2010).

— Ala. Code § 8-6-19(a)(l)(2) — 1 case

— Ala. Code § 8-6-19(b) — 4 cases

Hirata Corp. v. J.B. Oxford & Co., 193 F.R.D. 589 (S.D. Ind. 2000).

Arthur Young & Co. v. Reves, 937 F.2d 1310 (8th Cir. 1991).

Foster v. Jesup & Lamont Sec. Co., 759 F.2d 838 (11th Cir. 1985).

— Ala. Code § 8-6-19(c) — 3 cases

Nichols v. Citigroup Global Markets, Inc., 364 F. Supp. 2d 1330 (N.D. Ala. 2004).

SLF Holdings, LLC v. Uniti Fiber Holdings, Inc. (D. Del. 2020).

— Ala. Code § 8-6-19(e) — 7 cases

In Re Integrated Resources Real Est. Ltd. Partnerships Sec. Litig., 815 F. Supp. 620 (S.D.N.Y. 1993).

In Re Integrated Resources Real Est. Ltd. Partnerships Sec. Litig., 850 F. Supp. 1105 (S.D.N.Y. 1994).

McCullough v. Leede Oil & Gas, Inc., 617 F. Supp. 384 (W.D. Okla. 1985).

McInnis v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 706 F. Supp. 1355 (M.D. Tenn. 1989).

— Ala. Code § 8-6-19(f) — 3 cases

Jarvis M. Adams v. Stiles A. Kellett, Jr., 360 F. App'x 67 (11th Cir. 2010).

Fischler v. Amsouth Bancorporation, 971 F. Supp. 533 (M.D. Fla. 1997).

Ryder v. Mabry, 68 So. 3d 169 (Ala. Civ. App. 2010).

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