Section 45.55.028. Practices of broker-dealers and agents considered fraudulent or deceitful.

Acts and practices of broker-dealers or agents that are considered fraudulent or deceitful acts, practices, or courses of business under AS 45.55.010(a) include
        (1) entering into a transaction with a customer with regard to a security at an unreasonable price or at a price not reasonably related to the current market price of the security, or receiving an unreasonable commission, markup, or profit;
        (2) contradicting or negating the importance of information contained in a prospectus or other offering material with the intent to deceive or mislead, or using an advertising or sales presentation in a deceptive or misleading manner, including using supplementary material that does not consistently reflect or is not supported by information presented in prospectus or offering material required to be delivered in connection with the offer;
        (3) in connection with the offer, sale, or purchase of a security, falsely misleading a customer to believe that the broker-dealer or agent possesses material, nonpublic information that would affect the value of the security;
        (4) in connection with the solicitation of a sale or purchase of a security, engaging in a pattern or practice of making contradictory recommendations to different investors with similar investment objectives for some to sell and others to purchase the same security, at or about the same time, when not justified by the particular circumstances of each investor;
        (5) failing to make a bona fide public offering in accordance with an underwriting agreement of all the securities allotted to a broker-dealer for distribution by using methods such as
             (A) transferring securities to a customer, another broker-dealer, or a fictitious account with the understanding that the securities will be returned to the broker-dealer or its nominees; or
             (B) parking or withholding securities;
        (6) with respect to transactions in securities sold in the over-the-counter market other than those securities listed in the NASDAQ National Market System,
             (A) conducting sales contests in a particular security;
             (B) failing or refusing to promptly execute sell orders after a solicited purchase by a customer;
             (C) soliciting a secondary market transaction when there has not been a bona fide distribution in the primary issuer market;
             (D) engaging in a pattern of compensating an agent in different amounts for effecting sales and purchases in the same security;
        (7) effecting a transaction in or inducing the purchase or sale of a security by means of any manipulative, deceptive, or other fraudulent device or contrivance, including the use of boiler room tactics or the use of fictitious accounts; in this paragraph, "boiler room tactics" includes high-pressure sales tactics that have the effect of creating an artificially short period in which the investor must make a decision or that are designed to overcome a customer's reluctance to make an investment, including
             (A) the use of intensive telephone campaigns or unsolicited calls to persons who are not known by or who do not have an account with the agent or broker-dealer and in which the person is encouraged to make a hasty decision to buy without regard to the person's investment needs and objectives;
             (B) the use of scripts designed to meet the customer's objections;
             (C) repeated phone calls;
             (D) phone calls designed to entrap the customer;
             (E) threatening tones on the telephone informing the customer that there is little time within which to make a decision;
        (8) failing to comply with a prospectus delivery requirement adopted under federal law;
        (9) making a false, misleading, deceptive, or exaggerated representation or prediction in the solicitation or sale of a security, including a statement that
             (A) the security will be resold or repurchased;
             (B) the security will be listed or traded on an exchange or established market;
             (C) purchasing the security will result in an assured, immediate, or extensive increase in value, future market price, or return on investment; or
             (D) refers to the issuer's financial condition, anticipated earnings, potential growth, or success;
        (10) failing to disclose to a customer that the broker-dealer or agent is acting as an agent for both the customer and another person; or
        (11) effecting a transaction on terms and conditions other than those stated by the confirmation.

Notes

Recent Bills that will modify this

HB 194 AK SECURITIES ACT; PENALTIES; CRT. RULES
SB 108 AK SECURITIES ACT; PENALTIES; CRT. RULES

Implemented As

3 AAC 08.705

History

(Sec. 9 ch 76 SLA 1999)