O.C.G.A. § 10-5-26 (2019)

Annotations

Law reviews. For article, “The Georgia Uniform Securities Act of 2008: An Analysis of

Significant Changes to Georgia’s Blue Sky Law,” see 14 (No. 6) Ga. St. B. J. 18 (2009).

JUDICIAL DECISIONS Editor’s notes. - In light of the similarity of the statutory provisions, decisions under former Code 1933, § 97-103 and former O.C.G.A. § 10-5-3, which were subsequently repealed but were succeeded by provisions in this

article, are included in the annotations for this article. Sale of shares of stock. - Shares of stock were “securities” which it was unlawful to sell in violation of former Code 1933, § 97-103 and subsection (a) of

former Code 1933, § 97-112. DeBoard v. Schulhofer, 156 Ga. App. 158, 273 S.E.2d 907, 1980 Ga. App. LEXIS 2923 (1980) (decided under former Code 1933, § 97-103). Demand promissory note and option to purchase shares of corporation given in exchange for checks for $12,500.00 was a transaction to which requirements of former Code 1933, §§ 97-103 and 97-112 applied. DeBoard v. Schulhofer, 156 Ga. App. 158, 273 S.E.2d 907, 1980 Ga. App. LEXIS 2923 (1980) (decided under former Code 1933, § 97-103). Subsection (a) only violated by listed persons. - Since the defendants did not come within any of the categories of persons, as defined in former Code 1933, § 97-102, which were required by subsection (a) of former Code 1933, § 97-103 to be registered, it follows that the sale of limited partnership interests by the defendants was not violative of subsection (a) of § 97-103. Hirsch v. Equilateral Assocs., 245 Ga. 373, 264 S.E.2d 885, 1980 Ga. LEXIS 803 (1980) (decided under former Code 1933, § 97-103). Owner of stock included in security provisions. - See Jorges v. Griffin, 161 Ga. App. 439, 288 S.E.2d 356, 1982 Ga.

App. LEXIS 1908 (1982) (decided under former O.C.G.A. § 10-5-3). Burden on controlling officer seeking to avoid liability. - Former Code 1933, § 97-114 imposed liability upon the controlling officer of a corporation for a transaction executed by corporate treasurer administering affairs in the officer’s absence, which transaction violated former Code 1933, §§ 97-103 and 97-112, if the officer directly or indirectly controlled the treasurer, unless the officer sustained burden of proof that the officer did not know, and in exercise of reasonable care could not have known, existence of facts by reason of which liability was alleged to exist. DeBoard v. Schulhofer, 156 Ga. App. 158, 273 S.E.2d 907, 1980 Ga. App. LEXIS 2923 (1980) (decided under former O.C.G.A. § 10-5-3). Dealers. - Whether defendant was a “dealer” was immaterial since the evidence at trial was sufficient for a jury to find that the defendant was a “salesman” pursuant to former O.C.G.A. § 10-5-2(a)(25). Greenhill v. State, 199 Ga. App. 218, 404 S.E.2d 577, 1991 Ga. App. LEXIS 469 (1991), cert. denied, No. S91C0894, 1991 Ga. LEXIS 706 (Ga. May 15, 1991) (decided under former O.C.G.A. § 10-5-3).

OPINIONS OF THE ATTORNEY GENERAL Editor’s notes. - In light of the similarity of the statutory provisions, opinions under former Ga. L. 1957, p. 134, former Code 1933, § 97-103, and former O.C.G.A. § 10-5-3, as amended, which were subsequently repealed but were succeeded by provisions in this article, are included in the annotations for this article. New York license to sell securities was not valid in Georgia. 1969 Op. Att’y Gen. No. 69-102 (decided under former Ga. L. 1957, p. 134, as amended). Citizenship is not prerequisite to registration as a dealer, limited dealer, salesperson, or limited salesperson. 1970 Op. Att’y Gen. No. 70-113 (decided under former Ga. L. 1957, p. 134, as amended). Foreign corporation also needs certificate of authority. - Registration as a dealer does not exempt a foreign

corporation from needing a certificate of authority. 1975 Op. Att’y Gen. No. 75-38 (decided under former Code 1933, § 97-103). Partner or officer in real estate syndicate may be “dealer” or “salesperson”. - A general partner or executive officer of a real estate syndication should not be excluded from the definition of “salesperson” or “dealer” merely because the person receives compensation or profit in the form of a profit on sales to the syndication, a real estate brokerage commission, a management fee, or some other form which is not an explicit commission for the sale of securities. 1974 Op. Att’y Gen. No. 74-75 (decided under former Code 1933, § 97-103). Sellers of mortgage securities. - Person who engages in the business of

selling mortgage securities to the public is required to register as a dealer, and the individuals who work for such a dealer are required to register as salesperson unless the individuals qualify for one of the exemptions enumerated in this section. 1974 Op. Att’y Gen. No. 74-153 (decided under former Code 1933, § 97-103). Sellers of time-sharing units in condominiums with profit-sharing arrangements. - Sale of time-sharing units in a condominium when coupled with a rental pool or other profit-sharing arrangement constitutes a “security” within the definition of former Code 1933, § 97-103, and any person offering for sale or selling such securities must register as a dealer, limited dealer, salesperson, or limited salesperson unless such a person was a real estate broker or salesperson licensed to sell real estate in Georgia. 1976 Op. Att’y Gen. No. 76-75 (decided under former Code 1933, § 97-103). Activities described in section bring transaction under chapter. - Georgia courts would probably hold that the securities registration provisions did not apply to transactions involving a

Georgia issuer if no sale or offer to sell occurred within Georgia; but if activities described in Ga. L. 1957, p. 134 are carried on in Georgia, this could bring the transactions under the law of this state. 1970 Op. Att’y Gen. No. U70-88 (decided under former Ga. L. 1957, p. 134, as amended). Fees part of application. - General Assembly intended registration fees to be part of the application process without which the application for registration could not be considered complete and hence could not be acted upon. 1975 Op. Att’y Gen. No. 75-79 (decided under former Code 1933, § 97-103). Refund of fees if application withdrawn not authorized. - Statutory security provisions did not vest the commissioner of securities with authority to refund the registration fees required as part of the application for registration as a dealer, limited dealer, salesperson, or limited salesperson should an applicant withdraw an application. 1975 Op. Att’y Gen. No. 75-79 (decided under former Code 1933, § 97-103).

RESEARCH REFERENCES Am. Jur. 2d. 69A Am. Jur. 2d, Securities Regulation - State, § 15 et seq. C.J.S. 79A C.J.S., Securities Regulation and Commodity Futures Trading Regulation, § 493 et seq. ALR. Liability of seller to purchaser of invalid nonnegotiable public warrants, bonds,

certificates, or other documents, 139 A.L.R. 1426. Applicability of Blue Sky Laws to preincorporation subscriptions, 50 A.L.R.2d 1103. Who is “dealer” under state securities Acts exempting sales by owners other than issuers not made in course of successive transactions, and the like, 6 A.L.R.3d 1425.