First Regular Session
Sixty-second General Assembly
LLS NO. 99-0908.01 Bart Miller HOUSE BILL 99-1365
STATE OF COLORADO
BY REPRESENTATIVE Kaufman
BUSINESS AFFAIRS & LABOR
A BILL FOR AN ACT
101 CONCERNING A REQUIREMENT OF PRIVITY OF CONTRACT IN ORDER FOR A
102 PERSON TO BE SUBJECT TO CIVIL PENALTIES FOR SECURITIES FRAUD
103 UNDER THE "COLORADO SECURITIES ACT".
Bill Summary
(Note: This summary applies to this bill as introduced and does
not necessarily reflect any amendments that may be subsequently
adopted.)
Specifies that any person who recklessly, knowingly, or with intent
to defraud sells or buys a security in violation of the securities laws or
provides investment advisory services in violation of the securities laws
is liable to the person from whom the security is bought or to whom the
security is sold, as the case may be. Provides that it is the intent of the
general assembly that any person alleging liability under this law must
prove that privity of contract existed in connection with the sale or
purchase of a security or the providing of investment advisory services.
1 Be it enacted by the General Assembly of the State of Colorado:
2 SECTION 1. 11-51-604 (3), Colorado Revised Statutes, is
3 amended to read:
4 11-51-604. Civil liabilities. (3) Any person who recklessly,
5 knowingly, or with an intent to defraud sells or buys a security in
6 violation of section 11-51-501 (1) or provides investment advisory
7 services to another person in violation of section 11-51-501 (5) or (6) is
[ ] denotes HOUSE amendment. { } denotes SENATE amendment.
Capital letters indicate new material to be added to existing statute.
Dashes through the words indicate material to be deleted from existing statute.
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1 liable to the person buying or selling such security or receiving such
2 services in connection with the violation FROM WHOM THE PERSON
3 BOUGHT OR TO WHOM THE PERSON SOLD SUCH SECURITY, OR TO WHOM
4 THE PERSON PROVIDED SUCH SERVICES, AS THE CASE MAY BE, for such
5 legal or equitable relief that the court deems appropriate, including
6 rescission, actual damages, interest at the statutory rate, costs, and
7 reasonable attorney fees. IT IS THE INTENT OF THE GENERAL ASSEMBLY
8 THAT ANY PERSON ALLEGING LIABILITY UNDER THIS SUBSECTION (3) MUST
9 PROVE THAT PRIVITY OF CONTRACT EXISTED IN CONNECTION WITH THE
10 SALE OR PURCHASE OF A SECURITY OR THE PROVIDING OF INVESTMENT
11 ADVISORY SERVICES BETWEEN SUCH PERSON AND ANY PERSON ALLEGED
12 TO HAVE VIOLATED SECTION 11-51-501 (1), (5), OR (6).
13 SECTION 2. Effective date - applicability. This act shall take
14 effect upon passage and shall apply to actions filed on or after said date
15 and to actions currently pending on such date, but with respect to which
16 no final appealable judgment has been entered by the trial court.
17 SECTION 3. Safety clause. The general assembly hereby finds,
18 determines, and declares that this act is necessary for the immediate
19 preservation of the public peace, health, and safety.