Agent: means an individual other than a broker-dealer who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities. See Utah Code 61-1-13
Broker-dealer: means a person engaged in the business of effecting transactions in securities for the account of others or for the person's own account. See Utah Code 61-1-13
Contract: A legal written agreement that becomes binding when signed.
Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
Director: means the director of the division appointed in accordance with Section 61-1-18. See Utah Code 61-1-13
Discovery: Lawyers' examination, before trial, of facts and documents in possession of the opponents to help the lawyers prepare for trial.
Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
Person: means :
(i)
an individual;
(ii)
a corporation;
(iii)
a partnership;
(iv)
a limited liability company;
(v)
an association;
(vi)
a joint-stock company;
(vii)
a joint venture;
(viii)
a trust where the interests of the beneficiaries are evidenced by a security;
Plaintiff: The person who files the complaint in a civil lawsuit.
purchase: means a contract for purchase of, contract to buy, or acquisition of a security or interest in a security for value. See Utah Code 61-1-13
Security: means a:
(A)
note;
(B)
stock;
(C)
treasury stock;
(D)
bond;
(E)
debenture;
(F)
evidence of indebtedness;
(G)
certificate of interest or participation in a profit-sharing agreement;
(H)
collateral-trust certificate;
(I)
preorganization certificate or subscription;
(J)
transferable share;
(K)
investment contract;
(L)
burial certificate or burial contract;
(M)
voting-trust certificate;
(N)
certificate of deposit for a security;
(O)
certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease;
(P)
commodity contract or commodity option;
(Q)
interest in a limited liability company;
(R)
life settlement interest; or
(S)
in general, an interest or instrument commonly known as a "security" or a certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase an item listed in Subsections (1)(ee)(i)(A) through (R). See Utah Code 61-1-13
Undue influence: means that a person uses a relationship or position of authority, trust, or confidence:
(i)
that is unrelated to a relationship created:
(A)
in the ordinary course of making investments regulated under this chapter; or
(B)
by a licensee providing services under this chapter;
(ii)
that results in:
(A)
an investor perceiving the person as having heightened credibility, personal trustworthiness, or dependability; or
(B)
the person having special access to or control of an investor's financial resources, information, or circumstances; and
(iii)
to:
(A)
exploit the trust, dependence, or fear of the investor;
(B)
knowingly assist or cause another to exploit the trust, dependence, or fear of the investor; or
(C)
gain control deceptively over the decision making of the investor. See Utah Code 61-1-13
offers, sells, or purchases a security in violation of Subsection 61-1-1(2).
(b)
A person described in Subsection (1)(a) is liable to a person selling the security to or buying the security from the person described in Subsection (1)(a). The person to whom the person described in Subsection (1)(a) is liable may sue either at law or in equity to recover the consideration paid for the security, together with interest at 12% per year from the date of payment, costs, and reasonable attorney fees, less the amount of income received on the security, upon the tender of the security or for damages if the person no longer owns the security.
(c)
Damages are an amount calculated as follows:
(i)
subtract from the amount that would be recoverable upon a tender under Subsection (1)(b), excluding interest, the value of the security when the buyer disposed of the security; and
(ii)
add to the amount calculated under Subsection (1)(c)(i) interest at:
(A)
12% per year:
(I)
beginning the day on which the security is purchased by the buyer; and
(II)
ending on the date of disposition; and
(B)
after the period described in Subsection (1)(c)(ii)(A), 12% per year on the amount lost at disposition.
(2)
The court in a suit brought under Subsection (1) may award an amount equal to three times the consideration paid for the security, together with interest, costs, and attorney fees, less any amounts, all as specified in Subsection (1) upon a showing that:
(a)
the violation was reckless or intentional; or
(b)
the violation was of Subsection 61-1-1(2), was negligent, and it is demonstrated by clear and convincing evidence that the violation involved an investment by a person over whom the violator exercised undue influence.
(3)
A person who offers or sells a security in violation of Subsection 61-1-1(2) is not liable under Subsection (1)(a) if the purchaser knew of the untruth or omission, or the seller did not know and in the exercise of reasonable care could not have known of the untrue statement or misleading omission.
(4)
(a)
Every person who directly or indirectly controls a seller or buyer liable under Subsection (1), every partner, officer, or director of such a seller or buyer, every person occupying a similar status or performing similar functions, every employee of such a seller or buyer who materially aids in the sale or purchase, and every broker-dealer or agent who materially aids in the sale or purchase are also liable jointly and severally with and to the same extent as the seller or purchaser, unless the nonseller or nonpurchaser who is so liable sustains the burden of proof that the nonseller or nonpurchaser 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.
(b)
There is contribution as in cases of contract among the several persons so liable.
(5)
A tender specified in this section may be made at any time before entry of judgment.
(6)
A cause of action under this section survives the death of a person who might have been a plaintiff or defendant.
(7)
(a)
An action may not be maintained to enforce liability under this section unless brought before the earlier of:
(i)
the expiration of five years after the act or transaction constituting the violation; or
(ii)
the expiration of two years after the discovery by the plaintiff of the facts constituting the violation.
(b)
A person may not sue under this section if:
(i)
the buyer or seller received a written offer, before suit and at a time when the buyer or seller owned the security, to refund the consideration paid together with interest at 12% per year from the date of payment, less the amount of any income received on the security, and the buyer or seller failed to accept the offer within 30 days of its receipt; or
(ii)
the buyer or seller received such an offer before suit and at a time when the buyer or seller did not own the security, unless the buyer or seller rejected the offer in writing within 30 days of its receipt.
(8)
A person who has made or engaged in the performance of any contract in violation of this chapter or any rule or order issued under this chapter, or who has acquired a purported right under any such contract with knowledge of the facts by reason of which its making or performance was in violation, may not base a suit on the contract.
(9)
A condition, stipulation, or provision binding a person acquiring a security to waive compliance with this chapter or a rule or order issued under this chapter is void.
(10)
(a)
The rights and remedies provided by this chapter are in addition to any other rights or remedies that may exist at law or in equity.
(b)
This chapter does not create a cause of action not specified in this section or Subsection 61-1-4(6).
