Iowa Code

Iowa Code § 502.502 (2026)

Prohibited conduct in providing investment advice

✓ current as of July 2026

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1. Fraud in providing investment advice. It is unlawful for a person that advises others for compensation, either directly or indirectly or through publications or writings, as to the value of securities or the advisability of investing in, purchasing, or selling securities or that, for compensation and as part of a regular business, issues or promulgates analyses or reports relating to securities to do any of the following:

a. Employ a device, scheme, or artifice to defraud another person.

b. Engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.

2. Rules defining fraud. A rule adopted under this chapter may define an act, practice, or course of business of an investment adviser or an investment adviser representative, other than a supervised person of a federal covered investment adviser, as fraudulent, deceptive, or manipulative, and prescribe means reasonably designed to prevent investment advisers and investment adviser representatives, other than supervised persons of a federal covered investment adviser, from engaging in acts, practices, and courses of business defined as fraudulent, deceptive, or manipulative.

3. Rules specifying contents of advisory contract. A rule adopted under this chapter may specify the contents of an investment advisory contract entered into, extended, or renewed by an investment adviser. [C31, 35, §8581-c18; C39, §8581.23; C46, 50, 54, 58, 62, 66, 71, 73, 75, §502.23; C77, 79, 81, §502.502] 96 Acts, ch 1025, §13; 2004 Acts, ch 1161, §40, 68 Referred to in §502.508, 502.610\n\n 502.502A Advisory misconduct. Repealed by 2004 Acts, ch 1161, §63, 68. See §502.509. \n

Notes of Decisions

Cited in 4 cases, 1988–1999 · leading case: State Ex Rel. Goettsch v. Diacide Distributors, Inc., 561 N.W.2d 369 (Iowa 1997).

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State Ex Rel. Goettsch v. Diacide Distributors, Inc., 561 N.W.2d 369 (Iowa 1997). · cites it 16× “See Iowa Code § 502.502 (2) (any person who offers or sells a security in violation of section 502.”

Whalen v. Connelly, 545 N.W.2d 284 (Iowa 1996). · cites it 4× “See also Iowa Code § 502.502 (granting a private cause of action to enforce this section).”

State Ex Rel. Goettsch v. Diacide Distributors, Inc., 596 N.W.2d 532 (Iowa 1999). · cites it 4× “501 and section 502.502, subsections 1 and 5, any person liable hereunder proves that the person 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; and b.”

Blinder, Robinson & Co. v. Goettsch, 431 N.W.2d 336 (Iowa 1988). · cites it 4× “No action shall be maintained to enforce any liability created under either section 502.502 [fraudulent practices] or section 502.”

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