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2018 Georgia Code 10-5-50 | Car Wreck Lawyer

Link to State of Georgia Official Statute 2018 Georgia Code Annotated (sourced from legal.resource.org)
O.C.G.A. 10-5-50 Case Law from Google Scholar Amendments to OCGA 10-5-50

TITLE 10 COMMERCE AND TRADE

Section 5. Georgia Uniform Securities, 10-5-1 through 10-5-90.

ARTICLE 5 VIOLATIONS, PENALTIES, AND CIVIL LIABILITY

10-5-50. Unlawful practices with offer, sale, or purchase of security.

It is unlawful for a person, in connection with the offer, sale, or purchase of a security, directly or indirectly:

  1. To employ a device, scheme, or artifice to defraud;
  2. To make an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statement made, in the light of the circumstances under which it is made, not misleading; or
  3. To engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.

(Code 1981, §10-5-50, enacted by Ga. L. 2008, p. 381, § 1/SB 358.)

JUDICIAL DECISIONS

Standing on manipulative or deceptive device claims.

- Because only plaintiff corporation sold the plaintiff's interest in a company to the company's managing partners, the co-plaintiffs, the corporations' principals, lacked standing on claims of securities fraud under former O.C.G.A. § 10-5-12(a)(2), against the defendant managing partners' financier. Ledford v. Peeples, 605 F.3d 871 (11th Cir. 2010)(decided under former O.C.G.A. § 10-5-12).

Scienter not sufficiently pled.

- Investors' reliance on the defendants' positions as directors and officers, their attendance at meetings, and access to internal documents and reports was insufficient to allege a strong inference of scienter to support their securities fraud claims under O.C.G.A. § 10-5-12(a)(2), 15 U.S.C. § 78j(b), and 15 U.S.C. § 78u-4. Patel v. Patel, 761 F. Supp. 2d 1375 (N.D. Ga. Jan. 14, 2011).

No intent to defraud found.

- Borrowers did not commit fraud upon a lender; the borrowers advised the lender that the $150,000 the borrowers sought would fund the corporation for a few months until the borrowers secured a total of $1.5 million to build the necessary greenhouses, and the payment of salaries to themselves of $600 per week each was not inconsistent with the borrowers stated purpose. Because there was no intent to defraud, the borrowers were not liable for securities fraud under O.C.G.A. § 10-5-50. Sims v. Natural Prods. of Ga., LLC, 337 Ga. App. 20, 785 S.E.2d 659 (2016).

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