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59.005 Short title. ORS 59.005 to 59.451, 59.991 and 59.995 may be cited as the Oregon Securities Law. [1967 c.537 §2]

59.010 [Repealed by 1967 c.537 §36]

59.015 Definitions for Oregon Securities Law. As used in the Oregon Securities Law, unless the context otherwise requires:

(1) "Broker-dealer" means a person who engages, all or part of the time, in effecting transactions in securities for the account of others or for the person’s own account. "Broker-dealer" does not include:

(a) An issuer effecting sales in its own securities;

(b) The following institutions:

(A) A financial institution or trust company, as defined in ORS 706.008; or

(B) A financial holding company or a bank holding company, as defined in ORS 706.008, holding an institution described in subparagraph (A) of this paragraph; a savings and loan holding company as defined in section 408 of the National Housing Act, 12 U.S.C. section 1730a, holding an association described in subparagraph (A) of this paragraph; the subsidiaries and affiliates of the financial holding company, bank holding company or savings and loan holding company; or subsidiaries and affiliates of institutions described in subparagraph (A) of this paragraph, if the appropriate statutory regulatory authority is exercising control over, or is regulating or supervising the person in the sale of securities in accord with the purposes of the Oregon Securities Law;

(c) A person who has no place of business in this state effecting transactions in this state exclusively with broker-dealers;

(d) A person effecting sales exempted by ORS 59.035;

(e) A salesperson;

(f) A person effecting sales of securities owned by the person registered for sale pursuant to ORS 59.065;

(g) A person effecting sales of securities exempted by ORS 59.025 (7);

(h) A person licensed as a mortgage banker or a mortgage broker under ORS 59.840 to 59.980 when effecting sales of securities involving real estate paper registered for sale pursuant to ORS 59.065; or

(i) A person designated by rule or order by the director.

(2) "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

(3) "Director" means the Director of the Department of Consumer and Business Services.

(4) "Federal covered investment adviser" means a person who is registered as an investment adviser pursuant to section 203 of the Investment Advisers Act of 1940, as amended.

(5) "Federal covered security" means any security that is a covered security under section 18 of the Securities Act of 1933, as amended, and for which such Act provides that the director may require filing of a notice and payment of a fee.

(6) "Fraud," "deceit" and "defraud" are not limited to common-law deceit.

(7) "Guaranteed" means guaranteed as to payment of principal, interest or dividends.

(8)(a) "Investment adviser representative" means any partner, officer, director or person occupying a similar status or performing a similar function, or other individual, except clerical or ministerial personnel, who is employed by or associated with:

(A) A state investment adviser that is licensed or required to be licensed in this state and who does any of the following:

(i) Makes any recommendations or otherwise renders advice regarding securities;

(ii) Manages accounts or portfolios of clients;

(iii) Determines which recommendation or advice regarding securities should be given;

(iv) Solicits, offers or negotiates for the sale of or sells investment advisory services; or

(v) Supervises employees acting under this subparagraph; or

(B) A federal covered investment adviser, subject to the limitations of section 203A of the Investment Advisers Act of 1940, as amended, as the director may designate by rule or order.

(b) "Investment adviser representative" does not include a person designated by rule or order of the director.

(9) "Issuer" means a person who issues, proposes to issue or has issued a security and includes an issuer to be formed. With respect to certificates of deposit, voting-trust certificates or collateral-trust certificates, or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors or persons performing similar functions or of the fixed, restricted management or unit type, the "issuer" is the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other instrument or agreement under which the security is issued.

(10) "License" means a license as provided under the Oregon Securities Law.

(11) "Mortgage banker" means a mortgage banker as defined in ORS 59.840.

(12) "Mortgage broker" means a mortgage broker as defined in ORS 59.840.

(13) "Offer" or "offer to sell" includes every attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security for value. Every sale or offer of a warrant or right to purchase or subscribe to another security of the same or another issuer, as well as every sale or offer of a security which gives the holder a present or future right or privilege to convert into another security of the same or another issuer, is considered to include an offer of the other security.

(14) "Person" includes an individual, a joint venture, a partnership, a cooperative, a limited liability company, an association, a joint stock company, a corporation, a trust, an unincorporated organization or a government or political subdivision of a government.

(15) "Real estate paper" means any obligation secured or purportedly secured by an interest in real property. Real estate paper includes, but is not limited to, mortgage-backed securities, collateralized mortgage obligations, and real estate mortgage investment conduits.

(16) "Registered" means registered as provided in the Oregon Securities Law.

(17)(a) "Sale" or "sell" includes every contract of sale of, contract to sell, or disposition of, a security or interest in a security for value. Any security given or delivered with, or as a bonus on account of, a purchase of securities or any other thing shall constitute a part of the subject of the purchase and shall have been offered and sold for value. A gift of assessable stock by or for any issuer or promoter shall constitute a sale.

(b) For purposes of the authority of the director under ORS 59.245 and 59.255, the terms "sale" and "sell" include the terms "offer" and "offer to sell."

(c) "Sale" and "sell" do not include:

(A) A bona fide pledge or loan of securities;

(B) A bona fide security dividend, whether the corporation distributing the dividend is the issuer of the security or not, if nothing of value is given by the recipients for the dividend other than payments in connection with the elimination of fractional shares; or

(C) An act incident to a judicially approved reorganization in which a security is issued in exchange for one or more outstanding securities, claims or property interests, or partly in such exchange and partly for cash.

(18)(a) "Salesperson" means:

(A) A person, other than a broker-dealer, who represents or purports to represent a broker-dealer, issuer or owner of securities in effecting or attempting to effect in any manner transactions in securities.

(B) A person, other than a person licensed as a mortgage banker or mortgage broker under ORS 59.840 to 59.980, who represents or purports to represent the issuer, owner, or mortgage banker or mortgage broker licensed under ORS 59.840 to 59.980 in effecting sales of securities or involving real estate paper registered for sale pursuant to ORS 59.065.

(b) "Salesperson" does not include:

(A) A person who represents an issuer in effecting sales in a security exempted by ORS 59.025;

(B) A person who represents an issuer in effecting sales exempted by ORS 59.035;

(C) A person who represents an issuer in effecting sales with existing partners or directors of the issuer, if no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state;

(D) An employee of an institution or organization described in subsection (1)(b) of this section to the extent the employee is not a dual employee of the institution and a broker-dealer;

(E) A person effecting transactions in this state limited to those transactions described in section 15(h)(2) and (3) of the Securities Exchange Act of 1934, as amended; or

(F) A person designated by rule or order by the director.

(c) A person who is a partner, director or officer of a broker-dealer, issuer or owner of securities, or a person who occupies a similar status or performing similar functions, is a "salesperson" only if the person otherwise comes within this definition.

(19)(a) "Security" means a note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in a pension plan or profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under such title or lease, real estate paper sold by a broker-dealer, mortgage banker, mortgage broker or a person described in subsection (1)(b) of this section to persons other than persons enumerated in ORS 59.035 (4), or, in general, any interest or instrument commonly known as a "security," or any certificate of interest or participation in, temporary or interim certificates for, receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the foregoing.

(b) "Security" does not include:

(A) An insurance or endowment policy or annuity contract under which an insurance company promises to pay a fixed or variable sum of money either in a lump sum or periodically for life or some other specified period;

(B) A beneficial interest in a voluntary inter vivos trust unless the trust is created solely for the purpose of voting or is part of an attempt to evade the provisions of ORS 59.005 to 59.451; or

(C) A beneficial interest in a testamentary trust.

(20)(a) "State investment adviser" means a person who, for compensation:

(A) Engages all or part of the time of the person, in this state, in the business of advising others, either directly or by mail or through publication or writing, as to the value of securities or as to the advisability of investing in, purchasing or selling securities;

(B) Engages all or part of the time of the person, in this state, in the business of managing an investment or trading account in securities for other persons; or

(C) Issues or promulgates, as part of a regular business in this state, analyses or reports concerning securities.

(b) "State investment adviser" does not include:

(A) An investment adviser representative;

(B) An institution or organization described in subsection (1)(b) of this section;

(C) A licensed broker-dealer whose performance of investment advisory services is solely incidental to the conduct of business as a broker-dealer and who receives no special compensation for such services;

(D) A salesperson licensed to a broker-dealer whose performance of investment advisory services is solely incidental to that person’s activities as a salesperson and who receives no special compensation for such services;

(E) A publisher of or contributor to a bona fide newspaper, newsmagazine, investment manual or service, or business or financial publication of general, regular and paid circulation;

(F) A person whose only clients are federal covered investment advisers, state investment advisers, broker-dealers, mortgage bankers, mortgage brokers, banks, savings institutions or trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, as amended, pension or profit-sharing trusts, or other financial institutions or institutional buyers, whether acting for themselves or as trustees;

(G) A duly licensed lawyer, engineer or accountant whose performance of investment advisory services is solely incidental to the practice of the profession;

(H) A person whose advice, analyses or reports relate only to securities exempted by ORS 59.025 (1);

(I) A federal covered investment adviser in compliance with ORS 59.165 (7);

(J) A person, advising others, that has no place of business in this state and during the preceding 12-month period has had fewer than six clients, other than those persons included in subparagraph (F) of this paragraph, who are residents of this state; or

(K) Such other persons as the director may by rule or order designate. [1967 c.537 §3; 1971 c.624 §1; 1971 c.641 §1; 1973 c.366 §1; 1975 c.491 §1; 1985 c.349 §1; 1987 c.414 §§69, 69a; 1987 c.603 §1; 1989 c.197 §1; 1991 c.5 §18; 1993 c.158 §1; 1993 c.508 §27; 1993 c.744 §13; 1995 c.93 §26; 1995 c.622 §11; 1997 c.631 §375; 1997 c.772 §1; 1999 c.53 §1; 1999 c.315 §1; 2001 c.104 §14; 2001 c.377 §39a]

59.020 [Repealed by 1967 c.537 §36]

59.025 Securities exempt from registration. The following securities are exempt from ORS 59.049 and 59.055:

(1)(a) A security issued or guaranteed by the United States or by a state, a political subdivision of a state or an agency or other instrumentality of any of the foregoing.

(b) Any other security offered in connection with or as part of the security set forth in paragraph (a) of this subsection if the security cannot be severed and sold separately from the security in paragraph (a) of this subsection.

(2) A security issued or guaranteed by a foreign government with which the United States is at the time of the sale maintaining diplomatic relations, or by a state, province or political subdivision thereof having the power of taxation or assessment, if the security is recognized as a valid obligation by such foreign government or state, province or political subdivision thereof.

(3) A security that represents an interest in or a direct obligation of or is guaranteed by a national bank, federal savings and loan association, federal credit union or federal land bank or joint stock land bank or national farm loan association.

(4) Any of the following securities:

(a) A security listed or approved for listing upon notice of issuance on the New York Stock Exchange, the American Stock Exchange, the Midwest Stock Exchange, the Pacific Stock Exchange or any other exchange recognized by rule of the Director of the Department of Consumer and Business Services;

(b) A security designated or approved for designation upon notice of issuance under the National Association of Securities Dealers Automated Quotation System, Inc. National Market System;

(c) Any other security of the issuer of a security listed or designated under paragraph (a) or (b) of this subsection, that is of senior or substantially equal rank to the listed or designated security;

(d) A security issuable under rights or warrants listed or approved under paragraph (a), (b) or (c) of this subsection; or

(e) A warrant or right to purchase or subscribe to any security referred to in paragraph (a), (b), (c) or (d) of this subsection.

(5) A security maintaining a rating approved by the director in a recognized securities manual.

(6) A security that represents an interest in or a direct obligation of and that has been or is to be issued by a bank, trust company, savings and loan association, or credit union, that is subject to the examination, supervision and control of a regulatory agency of this state.

(7) Commercial paper issued, given or acquired in a bona fide way in the ordinary course of legitimate business, trade or commerce, when the commercial paper is not made the subject of a public offering.

(8) A security, the issuance of which is under supervision, regulation or control by the Public Utility Commission of this state, if the Public Utility Commission is exercising control over, or is regulating or supervising, the issuer thereof.

(9) Stock or membership certificates issued by an agricultural cooperative corporation or irrigation association when the stock is issued to evidence membership in the cooperative or association or as a patronage dividend and certificates issued to members or patrons by such a cooperative or association evidencing their respective interests in reserves or as patronage dividends. This exemption shall not apply to any cooperative or association that expects to engage in or is engaged in the production, processing or marketing of forest products.

(10) Stock or membership certificates issued by a fishing cooperative corporation, when the stock or certificates are issued to members of the cooperative corporation either for the purpose of showing membership in the cooperative corporation or for the purpose of showing their respective interests in reserves or patronage dividends. For purposes of this subsection, a fishing cooperative corporation is an association of persons engaged commercially in harvesting, marketing or processing products of aquatic life from fresh and salt water, that is formed or operated under ORS chapter 62 with the purpose of commercially harvesting, marketing or processing such products or engaging in group bargaining with respect to the sale of such products.

(11) Stock or membership certificates issued by an association of consumers formed or operated under ORS chapter 62 with the purpose of providing groceries to its consumer members, when the stock or certificates are issued to members either for the purpose of showing membership in the association or for the purpose of showing their respective interests in patronage dividends or reserves. For purposes of the exemption under this subsection:

(a) The price of stock or a membership certificate may not exceed $300.

(b) The benefits shall be limited to discounts on purchases or patronage dividends, or any combination of such discounts and dividends.

(c) The association may issue only one stock or membership certificate to an individual.

(12) Any security issued in connection with an employee’s stock purchase, savings, pension, profit sharing or similar employee’s benefit plan, provided:

(a) That the plan meets the requirements for qualification under section 401 of the Internal Revenue Code of 1986; and

(b) That the terms of the plan are fair, just and equitable to employees under rules of the director.

(13) Any security issued by a person:

(a) Organized and operated exclusively for religious, educational, benevolent, fraternal, charitable or reformatory purpose and not for pecuniary profit, and no part of the net earnings of which inures to the benefit of any person, private stockholder, or individual; and

(b) Designated by rule of the director.

(14) Any other security exempted by rule of the director. [1967 c.537 §4; 1969 c.688 §1; 1973 c.428 §9; 1975 c.491 §2; 1985 c.193 §1; 1985 c.349 §2a; 1987 c.603 §1a; 1987 c.677 §9; 1989 c.171 §6; 1989 c.197 §2; 1991 c.67 §10; 1993 c.18 §14; 1997 c.772 §2]

59.030 [Repealed by 1967 c.537 §36]

59.035 Transactions exempt from registration. The following transactions are exempt from ORS 59.049 and 59.055 if they are not part of an attempt to evade fraudulently any provision of the Oregon Securities Law:

(1) Any transaction by a sheriff, marshal or court appointed fiduciary.

(2) An isolated nonissuer transaction in this state, whether effected through a broker-dealer or not.

(3) Any transaction by an issuer in its securities pursuant to a pro rata offering to its existing security holders, if:

(a) No commission or remuneration, other than a standby fee, is paid or given directly or indirectly in connection with the transaction; and

(b) The issuer has not had an effective registration under the Oregon Securities Law nor has used this exemption within one year prior to the date of the offering or sale.

(4) Any offer, sale, transfer or delivery of securities to a bank, savings institution, trust company, insurance company, investment company, pension or profit-sharing trust, or other financial institution or institutional buyer (including but not limited to the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Housing Administration, the United States Department of Veterans Affairs and the Government National Mortgage Association), or to a broker-dealer, mortgage broker or mortgage banker, whether the purchaser is acting for itself or in a fiduciary capacity when the purchaser has discretionary authority to make investment decisions.

(5) Any transaction by an offeror with an accredited investor as defined in section 2 (15)(i) or (ii) of the Securities Act of 1933, as amended, or rules of the Director of the Department of Consumer and Business Services, but only if there is no public advertising or general solicitation in connection with the transaction.

(6) The issue and delivery of any security in exchange for any other security of the same issuer pursuant to a right of conversion entitling the holder of the security surrendered in exchange to make the conversion without the payment of additional consideration, if the security surrendered was, when issued, convertible and registered or exempt from registration.

(7) Any transaction in a vendor’s interest in a land sale contract, or a bond or note secured by a mortgage or trust deed upon real estate, so long as the entire vendor’s interest or mortgage or trust deed, with all the bonds or notes secured thereby, are sold to a single purchaser, in a single sale.

(8) Agency or principal sales by licensed broker-dealers, executed upon customers’ orders on any exchange or on the over-the-counter market, but not the solicitation of such orders, where there is no intent to avoid the provisions of the Oregon Securities Law and a public offering is not involved. Such broker-dealers shall keep and maintain, for two years from the date of the order, a record of all the sales executed upon customers’ orders, giving the name and address of each customer, the name and identity of the security involved, the dates of the sales, the price paid or received for the security, and the commission or other expenses charged to the customer.

(9) The offer or sale by a licensed broker-dealer of any security acquired in the ordinary and usual course of business, when such security is a part of an issue which has been registered in whole or in part, if the offer or sale is made in good faith and not directly or indirectly for the benefit of the issuer or for the promotion of any scheme or enterprise effecting a violation or an evasion of any provisions of the Oregon Securities Law, unless:

(a) The registration has been revoked or suspended; or

(b) The continued sale of the security has been enjoined.

(10) The offer or sale by licensed broker-dealer, acting either as principal or agent, of securities theretofore sold and distributed to the public, if the sale meets the requirements of paragraphs (a), (b) and (c) or (a), (b) and (d) of this subsection:

(a) Such securities are sold at prices reasonably related to the current market price thereof at the time of sale, and, if such licensed broker-dealer is acting as agent, the commission collected by such licensed broker-dealer on account of the sale thereof is not in excess of usual and customary commissions collected with respect to securities and transactions having comparable characteristics;

(b) Such securities do not constitute an unsold allotment to or subscription by such broker-dealer as a participant in the distribution of such securities by the issuer or by or through an underwriter;

(c) The issuer is listed in any recognized securities manual approved by rule by the director, and the listing contains the names of the issuer’s officers and directors, a balance sheet of the issuer as of a date not more than 18 months prior to the date of such sale, and a profit and loss statement for either the fiscal year preceding the date of the balance sheet or the most recent year of operations; and

(d) The securities are authorized for quotation on a nationwide automated quotations system approved by rule or order of the director.

(11) An offer, but not the sale, of a security meeting either of the following descriptions:

(a) A security for which registration statements have been filed under both the Oregon Securities Law and the Securities Act of 1933, as amended, if no stop or refusal order or order under ORS 59.105 is in effect and no public proceeding or examination looking toward such an order is pending. However, an offer for such a security may not be accepted until the securities have been registered as provided in the Oregon Securities Law.

(b) A security for which a registration statement has been filed under the Oregon Securities Law and the offer is allowed by the director. However, an offer for such a security may not be accepted until the securities have been registered as provided in the Oregon Securities Law.

(12)(a) Any transactions in securities by an offeror within or without this state that meet all of the requirements of subparagraph (A) or (B) of this paragraph and all of the requirements of subparagraphs (C), (D) and (E) of this paragraph:

(A) When the offeror is an issuer, the transactions result in not more than 10 purchasers within this state of securities of the issuer during any 12 consecutive months.

(B) When the offeror is a nonissuer the securities must have been bought and held for at least 12 consecutive months and the transactions result in not more than 10 purchasers within this state of securities from the nonissuer during any 12 consecutive months.

(C) No commission or other remuneration is paid or given directly or indirectly in connection with the offer or sale of the securities.

(D) No public advertising or general solicitation is used in connection with any transaction under this exemption.

(E) At the time of any transaction under this exemption the offeror does not have under the Oregon Securities Law an application for registration or an effective registration of securities which are part of the same offering.

(b) In connection with transactions under paragraph (a) of this subsection:

(A) Purchasers of securities of the offeror registered under ORS 59.065, exempt under ORS 59.025, exempt under any other subsection of this section, or for which a notice has been filed under ORS 59.049, are not counted as purchasers under this exemption.

(B) Repeat transactions with persons who are counted as purchasers within Oregon under paragraph (a) of this subsection do not increase the number of purchasers. However, a purchaser remains a purchaser for 12 months following the month of the last sale to that purchaser.

(C) No limitations are placed on the number of transactions or purchasers without this state. No limitations are placed on the number of offers under this exemption.

(13) A transaction with security holders, pursuant to a statutory vote by such security holders on a merger, consolidation, partial or complete liquidation, reclassification of securities, plan of exchange or sale of assets, in consideration of the issuance of securities of another issuer.

(14) Capital stock issued by a professional corporation organized under ORS chapter 58.

(15) Any other transaction exempted by rule of the director. [1967 c.537 §5; 1971 c.624 §2; 1973 c.823 §§91, 156; 1985 c.349 §3; 1987 c.603 §2; 1989 c.197 §3; 1991 c.67 §11; 1997 c.772 §3; 2001 c.32 §1]

59.045 Authority of director to deny, withdraw or condition exemptions. (1) The Director of the Department of Consumer and Business Services may by rule or order, as to any security or any type of security transaction:

(a) Deny, withdraw or condition the exemptions allowed by ORS 59.025 and 59.035 if, in the director’s opinion, the further sale of the security in this state would work a fraud or imposition upon the purchaser.

(b) Waive the conditions of ORS 59.035 (3)(b) and (12)(a)(B).

(c) Provide which exemptions may or may not be used in connection with other exemptions or provide procedures for determining which offerings are or are not integrated with other offerings within the same or other exemptions.

(2) The director may by order withdraw, condition or deny the use of any exemption by a person if the director has reason to believe that the person has engaged in or is about to engage in an act or practice constituting a violation of the Oregon Securities Law or that the use of any exemption by that person would work a fraud or imposition on purchasers.

(3) No person shall be liable under the Oregon Securities Law by reason of the withdrawal of an exemption under this section if that person sustains the burden of proof that that person did not know, and in the exercise of reasonable care could not have known of the withdrawal. [1967 c.537 §6; 1973 c.366 §3; 1985 c.349 §4]

59.047 [1981 c.292 §2; 1985 c.349 §5; repealed by 1987 c.603 §30]

59.049 Federal covered securities exempt from registration. Federal covered securities may be offered and sold in this state without registration, subject to the following:

(1) Unless otherwise exempt from registration under ORS 59.025 or 59.035, any federal covered security that is subject to section 18(b)(2) of the Securities Act of 1933, as amended, may be offered and sold only upon a filing of a notice with, and the payment of the required fee to, the Director of the Department of Consumer and Business Services. In lieu of the notice, an issuer may file a copy of its registration statement as filed with the Securities and Exchange Commission together with fees required under this subsection. The form of notice shall be prescribed by the director. The required fee shall be $350 for all investment companies other than unit investment trusts, or $150 for unit investment trusts. The fee shall not be refundable. The effective date of the notice shall be the later of the date the notice is received by the director or the date specified by the filer of the notice.

(2) Unless otherwise exempt from registration under ORS 59.025 or 59.035, any federal covered security that is subject to section 18(b)(3) or (4), other than section 18(b)(4)(D), of the Securities Act of 1933, as amended, may be offered and sold only upon a filing of a notice with, and the payment of the required fee to, the director. The form of notice shall be prescribed by the director. The required fee shall be equal to $1 per $1,000 of the aggregate price of the securities which are to be offered in this state on the first $100,000 or fraction thereof, 50 cents per $1,000 on the next $200,000 or fraction thereof and $25 per $100,000 for each additional $100,000 or fraction thereof, but in no case shall the fee be less than $25 or more than $500. The fee shall not be refundable. The effective date of the notice shall be the later of the date the notice is received by the director or the date specified by the filer of the notice.

(3) Unless otherwise exempt from registration under ORS 59.025 or 59.035, any federal covered security that is subject to section 18(b)(4)(D) of the Securities Act of 1933, as amended, may be offered and sold only upon a filing of a notice with, and the payment of the required fee to, the director, not later than 15 days after the first sale of such federal covered security in this state. The notice shall be filed on Securities and Exchange Commission Form D or on a form of notice prescribed by the director. The required fee shall be equal to $1 per $1,000 of the aggregate price of the securities which are to be offered in this state on the first $100,000 or fraction thereof, 50 cents per $1,000 on the next $200,000 or fraction thereof and $25 per $100,000 for each additional $100,000 or fraction thereof, but in no case shall the fee be less than $25 or more than $500. The fee shall not be refundable. The effective date of the notice shall be the later of the date the notice is received by the director or the date specified by the filer of the notice.

(4) The director may issue an order suspending the offer and sale of a federal covered security if the director finds that there is a failure to comply with any requirement under this section.

(5) Notwithstanding the provisions of this section, until October 10, 1999, the director may require the registration of any federal covered security for which the fees required by this section have not been promptly paid following written notification from the director to the issuer of the nonpayment or underpayment of such fees. An issuer shall be considered to have promptly paid the fees if they are remitted to the director within 15 days following the delivery of written notification by the director.

(6)(a) The filer of a notice under subsections (1) to (3) of this section shall amend the notice when there is a change in the name of the offering or, in the case of offerings for which notice is filed pursuant to subsection (2) or (3) of this section, when there is an increase in the aggregate price of the securities which are to be offered in this state. There is no fee required for an amendment that does not increase the aggregate offering amount. Notices amending the aggregate offering amount shall include fees calculated in accordance with subsection (2) or (3) of this section, less amounts previously paid under the prior notice filing but in no event shall the fee be less than $25. The fee shall not be refundable.

(b) If an issuer or person sells federal covered securities in this state for a price in excess of the aggregate price for which fees were initially paid under this section, the seller shall pay a fee of three times the difference between the initial fee paid and the fee required under this section for the federal covered securities sold in this state. However, the additional fee shall not be less than $25. The fee shall not be refundable.

(7) The director, by rule or otherwise, may waive any or all of the provisions of this section. [1997 c.772 §6; 2001 c.104 §15]

59.050 [1981 c.292 §3; 1985 c.349 §6; repealed by 1987 c.603 §30]

59.051 Statutory references to federal law. References in ORS 59.005 to 59.451, 59.991 and 59.995 to federal statutes or federal regulations shall be construed to refer to those statutes or regulations as they are in effect on April 19, 1999. [1999 c.53 §8]

59.052 [1981 c.292 §4; 1985 c.349 §7; repealed by 1987 c.603 §30]

(Registration of Securities)

59.055 Conditions of offer and sale of securities. It is unlawful for any person to offer or sell any security in this state, unless:

(1) The security is registered and the offer or sale is not in violation of any rule or order of the Director of the Department of Consumer and Business Services or any condition, limitation or restriction imposed by the director upon such registration;

(2) The security is exempt under ORS 59.025 or the sale is exempt under ORS 59.035; or

(3) The security is a federal covered security for which a notice has been filed and fees have been paid under ORS 59.049. [1967 c.537 §7; 1997 c.772 §4]

59.065 Registration procedures; application; fees. (1) The Director of the Department of Consumer and Business Services by rule shall establish procedures for registering securities. The director may coordinate registration in this state with any federal securities Act or national registration system.

(2)(a) Except as provided in paragraph (b) of this subsection, every registration application submitted shall be accompanied by a fee of $1 per $1,000 of the aggregate price of the securities which are to be offered in this state on the first $100,000 or fraction thereof, and 50 cents per $1,000 on the next $200,000 or fraction thereof and $25 per $100,000 for each additional $100,000 or fraction thereof, but in no case shall the fee be less than $25 nor more than $500. The fee is not refundable.

(b) Every registration application submitted pursuant to the provisions of ORS 59.049 (5) shall be accompanied by a fee equal to three times the amount of the fee otherwise required by ORS 59.049 (1), (2) or (3).

(3) If a registrant sells securities in Oregon in excess of the quantity registered or for a price in excess of the aggregate price for which fees were initially paid, the registrant may obtain registration of the excess securities by paying three times the difference between the initial fee paid and the fee required under subsection (2) of this section for the securities sold in Oregon. However, the additional fee shall not be less than $25. Registration of the excess securities shall be effective retroactively to the date of sale. [1967 c.537 §8; 1973 c.366 §4; 1985 c.349 §8; 1987 c.603 §3; 1997 c.772 §7]

59.070 Amended registration application; when required; fees. (1) A registrant under ORS 59.065 shall amend the registration application when there are material changes in the terms and conditions of the original registration. This shall include an increase in the aggregate amount of securities to be offered in Oregon, change in the type of securities or change in the identity of the issuer or owner.

(2) Applications for an amendment to increase the aggregate amount of securities to be offered in Oregon shall include fees calculated in accordance with ORS 59.065 (2), less amounts previously paid under the prior registration but in no event shall the fee be less than $25.

(3) Nothing in this section shall relieve a registrant from the obligation to notify the director concerning material changes in facts and circumstances concerning the offering. [1985 c.349 §10; 1987 c.603 §4]

59.075 Registration by director; expiration; renewal; fee; rules. (1) The Director of the Department of Consumer and Business Services shall register the securities unless the director finds that registration should be denied on one or more of the grounds specified in ORS 59.105. The securities may thereafter be sold in accordance with the registration and any conditions, limitations or restrictions imposed by the director.

(2) Every registration of securities and every notice filed under ORS 59.049 shall expire one year after the date of the registration or effective date of the notice. The director may establish a different expiration date for purposes of coordination with any national registration or notice filing system. When a registration or notice filing is amended, the registration or notice filing expires one year after the date of the initial registration or effective date of the notice filing unless the amended registration or notice filing provides otherwise.

(3) The director by rule shall establish procedures for renewing registrations of securities and notice filings.

(4) Every renewal application and every renewal of a notice filing shall be accompanied by a fee computed in accordance with ORS 59.049 or ORS 59.065 (2), as applicable. The fee is not refundable.

(5) If the director finds that no ground for suspension or revocation of the registration exists under ORS 59.105, the director shall renew the registration, subject to any conditions, limitations and restrictions imposed by the director. The renewed registration or notice filing shall expire one year after the date of expiration of the original registration, or effective date of the notice filing or last renewal thereof. The director may establish a different expiration date for purposes of coordination with any national registration or notice filing system. [1967 c.537 §9; 1985 c.349 §12; 1987 c.603 §5; 1997 c.772 §8]

59.078 [1973 c.366 §8; repealed by 1987 c.603 §30]

59.085 Conditions imposed on registration. The Director of the Department of Consumer and Business Services may, by rule or order, impose on a registration such conditions, limitations and restrictions as the director deems appropriate to make the issue fair, just and equitable, including the following:

(1) That a prospectus containing any designated part of the information submitted in connection with registration be sent or given to each person to whom a security is offered or sold.

(2) That the security be sold only on a specified form of subscription or sale contract and that a signed or conformed copy of each contract be filed with the director or preserved for a period up to three years specified in the rule or order.

(3) That any of the following be deposited in escrow on terms approved by the director:

(a) Any security issued or to be issued for a consideration substantially different from the public offering price or for a consideration other than cash.

(b) The proceeds from the sale of the security until the issuer receives an amount specified by the director. [1967 c.537 §10]

59.095 Approval of plan to issue securities in exchange for other securities, claims or property. (1) The proponents of a plan pursuant to which a security is to be issued in exchange for one or more bona fide outstanding securities, claims or property interests, or partly in such exchange and partly for cash, except a security the issuance of which is under supervision, regulation or control by the Public Utility Commission of this state, may request approval of such plan by the Director of the Department of Consumer and Business Services.

(2) The request for approval shall be made by filing a registration statement, as provided in ORS 59.065, with a detailed statement of the plan. The director shall set the plan down for hearing and require the proponents of the plan to give notice of the hearing to all persons to whom securities are to be issued in such exchange. All such persons shall have the right to appear at the hearing.

(3) The director shall, after the hearing, consider the fairness of the terms and conditions of the plan, and, if the director finds that the plan is fair, just and equitable and free from fraud, shall approve it, subject to such conditions, limitations and restrictions as the director may impose. If the director finds that the plan is unfair, unjust or inequitable or not free from fraud, the director shall deny the request, and give notice of the denial, at the expense of the proponents, to all persons who were entitled to receive or received notice of the hearing. [1967 c.537 §11]

59.105 Denial, suspension or revocation of registration. (1) Except as provided in subsection (2) of this section, the Director of the Department of Consumer and Business Services may by order deny, suspend or revoke any registration, if the director finds that:

(a) The proposed plan of business of the issuer, the characteristics and terms of sale of the securities to be sold, or the proposed methods of sale and distribution are unfair, unjust or inequitable;

(b) The issuer is insolvent or in unsound financial condition;

(c) The applicant, registrant or issuer has violated any of the provisions of the Oregon Securities Law, or any rule or order of the director of which the applicant, registrant or issuer had notice;

(d) The applicant, registrant or issuer has been or is engaged or is about to engage in dishonest or fraudulent conduct with regard to securities;

(e) The applicant, registrant, or issuer has been convicted of a misdemeanor, an essential element of which is fraud, or of a felony;

(f) The applicant, registrant or issuer has knowingly made or caused to be made to the director any false representation of a material fact, or has suppressed or withheld from the director any material information;

(g) The applicant, registrant or issuer has refused to permit an examination to be made by the director, or has failed to file any report, including any certified financial report, or furnish any information required by the director in connection with the Oregon Securities Law; or

(h) Unreasonable amounts or kinds of commissions or other remunerations, promoter’s profits or participation or unreasonable options have been or are to be given or allowed directly or indirectly in connection with the sale or distribution of the securities.

(2) The director may enter an order against the applicant, registrant or issuer under subsection (1) of this section if any partner, officer or director of an applicant, registrant or issuer, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the applicant, registrant or issuer has been guilty of any act or omission which would be cause for denying, suspending or revoking the registration of an individual applicant, registrant or issuer, except:

(a) This subsection shall not apply to subsection (1)(a) and (b) of this section.

(b) The director may not enter an order suspending or revoking a registration under this subsection, pursuant to subsection (1)(e) of this section, without 10 days’ prior written notice to the registrant. [1967 c.537 §12; 1989 c.197 §4]

59.110 [Amended by 1953 c.690 §3; 1955 c.201 §1; 1957 c.47 §1; 1963 c.244 §1; 1965 c.241 §2; repealed by 1967 c.537 §36]

59.115 Liability in connection with sale of securities; recovery by purchaser; limitations on proceeding; attorney fees. (1) A person who sells a security is liable as provided in subsection (2) of this section to a purchaser of the security if the person:

(a) Sells a security, other than a federal covered security, in violation of the Oregon Securities Law or of any condition, limitation or restriction imposed upon a registration or license under the Oregon Securities Law; or

(b) Sells a security by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading (the buyer not knowing of the untruth or omission), and who does not sustain the burden of proof that the person did not know, and in the exercise of reasonable care could not have known, of the untruth or omission.

(2) The purchaser may recover:

(a) Upon tender of the security, the consideration paid for the security, and interest from the date of payment equal to the greater of the rate of interest specified in ORS 82.010 for judgments and decrees for the payment of money or the rate provided in the security if the security is an interest-bearing obligation, less any amount received on the security; or

(b) If the purchaser no longer owns the security, damages in the amount that would be recoverable upon a tender, less the value of the security when the purchaser disposed of it and less interest on such value at the rate of interest specified in ORS 82.010 for judgments and decrees for the payment of money from the date of disposition.

(3) Every person who directly or indirectly controls a seller liable under subsection (1) of this section, every partner, limited liability company manager, including a member who is a manager, officer or director of such seller, every person occupying a similar status or performing similar functions, and every person who participates or materially aids in the sale is also liable jointly and severally with and to the same extent as the seller, unless the nonseller sustains the burden of proof that the nonseller did not know, and, in the exercise of reasonable care, could not have known, of the existence of facts on which the liability is based. Any person held liable under this section shall be entitled to contribution from those jointly and severally liable with that person.

(4) Notwithstanding the provisions of subsection (3) of this section, a person whose sole function in connection with the sale of a security is to provide ministerial functions of escrow, custody or deposit services in accordance with applicable law is liable only if the person participates or materially aids in the sale and the purchaser sustains the burden of proof that the person knew of the existence of facts on which liability is based or that the person’s failure to know of the existence of such facts was the result of the person’s recklessness or gross negligence.

(5) Any tender specified in this section may be made at any time before entry of judgment.

(6) Except as otherwise provided in this subsection, no action or suit may be commenced under this section more than three years after the sale. An action under this section for a violation of subsection (1)(b) of this section or ORS 59.135 may be commenced within three years after the sale or two years after the person bringing the action discovered or should have discovered the facts on which the action is based, whichever is later. Failure to commence an action on a timely basis is an affirmative defense.

(7) No action may be commenced under this section solely because an offer was made prior to registration of the securities.

(8) Any person having a right of action against a broker-dealer, state investment adviser or against a salesperson or investment adviser representative acting within the course and scope or apparent course and scope of authority of the salesperson or investment adviser representative, under this section shall have a right of action under the bond or irrevocable letter of credit provided in ORS 59.175.

(9) Subsection (4) of this section shall not limit the liability of any person:

(a) For conduct other than in the circumstances described in subsection (4) of this section; or

(b) Under any other law, including any other provisions of the Oregon Securities Law.

(10) Except as provided in subsection (11) of this section, the court may award reasonable attorney fees to the prevailing party in an action under this section.

(11) The court may not award attorney fees to a prevailing defendant under the provisions of subsection (10) of this section if the action under this section is maintained as a class action pursuant to ORCP 32. [1967 c.537 §13(1), (2), (3), (4), (5), (7); 1985 c.349 §13; 1987 c.158 §10; 1987 c.603 §6; 1989 c.197 §5; 1991 c.331 §15; 1991 c.762 §1; 1993 c.508 §28; 1995 c.93 §27; 1995 c.696 §9; 1997 c.772 §9]

59.120 [Amended by 1955 c.196 §1; 1957 c.116 §1; 1963 c.244 §2; repealed by 1967 c.537 §36]

59.125 Effect of notice of offer to repay purchaser; exceptions; registration of transaction. (1) Except as provided in subsection (3) of this section, no action or suit may be commenced under ORS 59.115 if the purchaser has received before suit a written notice as outlined in subsection (2) of this section.

(2) The notice shall contain:

(a) An offer to pay the amount specified in ORS 59.115 (2)(a) upon tender of the security; and

(b) A statement of the effect on the purchaser’s rights of failure to respond as required in subsection (3) of this section.

(3) An action or suit under this section may be commenced after receipt of a notice as outlined in subsection (2) of this section:

(a) If the purchaser owned the security when the notice was received, accepted the payment offer within 30 days after its receipt, and has not been paid the full amount offered; or

(b) If the purchaser did not own the security when the notice was received and, within 30 days after receipt, gave written notice of inability to tender back the security.

(4) An offer to repay the purchaser pursuant to this section involves the offer or sale of a security. The transaction must be registered under ORS 59.055 unless there is an exemption from the registration requirement or a notice is filed under ORS 59.049. [1967 c.537 §13(6); 1985 c.349 §14; 1997 c.772 §10]

59.127 Liability in connection with purchase of securities; recovery by seller; limitations on proceeding; attorney fees. (1) A person who purchases a security is liable as provided in subsection (2) of this section to the person selling the security, if the person:

(a) Purchases a security, other than a federal covered security, in violation of any condition, limitation or restriction imposed upon a registration under the Oregon Securities Law; or

(b) Purchases a security by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading (the seller not knowing of the untruth or omission), and if the person does not sustain the burden of proof that the person did not know, and in the exercise of reasonable care could not have known, of the untruth or omission.

(2) The seller may recover:

(a) Upon a tender of the consideration paid for the security, the security plus interest from the date of purchase equal to the greater of the rate of interest specified in ORS 82.010 for judgments and decrees for the payment of money, or the rate provided in the security if the security is an interest-bearing obligation;

(b) Damages in the amount that would be recoverable upon a tender, plus any amount received on the security, less the consideration paid for the security; or

(c) If the purchaser no longer owns the security, damages equal to the value of the security when the purchaser disposed of it plus interest on such value at the rate of interest specified in ORS 82.010 for judgments and decrees for the payment of money from the date of disposition, less the consideration paid for the security.

(3) Every person who directly or indirectly controls a purchaser liable under subsection (1) of this section, every partner, limited liability company manager, including a member who is a manager, officer or director of such purchaser, every person occupying a similar status or performing similar functions, and every person who participates or materially aids in the purchase is also liable jointly and severally with and to the same extent as the purchaser, unless the nonpurchaser sustains the burden of proof that the nonpurchaser did not know, and, in the exercise of reasonable care, could not have known, of the existence of facts on which the liability is based. Any person held liable under this section shall be entitled to contribution from those jointly and severally liable with the person.

(4) Notwithstanding the provisions of subsection (3) of this section, a person whose sole function in connection with the purchase of a security is to provide ministerial functions of escrow, custody or deposit services in accordance with applicable law is liable only if the person participates or materially aids in the purchase and the seller sustains the burden of proof that the person knew of the existence of facts on which liability is based or that the person’s failure to know of the existence of such facts was the result of the person’s recklessness or gross negligence.

(5) Any tender specified in this section may be made at any time before entry of judgment.

(6) Except as otherwise provided in this subsection, no action or suit may be commenced under this section more than three years after the purchase. An action under this section for a violation of subsection (1)(b) of this section or ORS 59.135 may be commenced within three years after the purchase or two years after the person bringing the action discovered or should have discovered the facts on which the action is based, whichever is later. Failure to commence an action on a timely basis is an affirmative defense.

(7) Any person having a right of action against a broker-dealer, state investment adviser or against a salesperson or investment adviser representative acting within the course and scope or apparent course and scope of the authority of the salesperson or investment adviser representative, under this section shall have a right of action under the bond or irrevocable letter of credit provided in ORS 59.175.

(8) Subsection (4) of this section shall not limit the liability of any persons:

(a) For conduct other than in the circumstances described in subsection (4) of this section; or

(b) Under any other law, including any other provisions of the Oregon Securities Law.

(9) Except as provided in subsection (10) of this section, the court may award reasonable attorney fees to the prevailing party in an action under this section.

(10) The court may not award attorney fees to a prevailing defendant under the provisions of subsection (9) of this section if the action under this section is maintained as a class action pursuant to ORCP 32. [1975 c.300 §2; 1985 c.349 §14a; 1987 c.158 §11; 1987 c.603 §7; 1991 c.762 §2; 1993 c.508 §29; 1995 c.93 §28; 1995 c.696 §10; 1997 c.772 §11]

59.130 [Amended by 1953 c.549 §138; repealed by 1967 c.537 §36]

59.131 Effect of notice of intent to return unlawfully purchased security; contents of notice; registration of transaction. (1) Except as provided in subsection (3) of this section, no action or suit may be commenced under ORS 59.127 if the seller has received before suit a written notice of intent to return the security as outlined in subsection (2) of this section.

(2) The notice shall contain:

(a) An offer to tender the security and interest from the date of purchase, at a rate equal to the greater of the rate of interest specified in ORS 82.010 for judgments and decrees for the payment of money or the rate provided in the security if the security is an interest-bearing obligation, less the consideration paid for the security; and

(b) A statement of the effect on the seller’s rights of failure to respond as required in subsection (3) of this section.

(3) An action or suit under this section may be commenced after receipt of a notice as outlined in subsection (2) of this section:

(a) If the seller accepts the offer and gives notice of acceptance within three days after receipt of the offer and fails to receive the contents of such offer as specified in subsection (2)(a) of this section within one day from the date the notice of acceptance was sent; or

(b) If the seller elects to recover damages as specified in subsection (2)(b) of this section and gives notice of the election within 30 days after receipt of the offer.

(4) An offer to tender the security pursuant to this section involves the offer for sale of a security. The transaction must be registered under ORS 59.055 unless there is an exemption from the registration requirement or a notice is filed under ORS 59.049. [1975 c.300 §3; 1985 c.349 §15; 1987 c.603 §8; 1997 c.772 §12]

59.135 Fraud and deceit with respect to securities or securities business. It is unlawful for any person, directly or indirectly, in connection with the purchase or sale of any security or the conduct of a securities business or for any person who receives any consideration from another person primarily for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise:

(1) To employ any device, scheme or artifice to defraud;

(2) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading;

(3) To engage in any act, practice or course of business which operates or would operate as a fraud or deceit upon any person; or

(4) To make or file, or cause to be made or filed, to or with the Director of the Department of Consumer and Business Services any statement, report or document which is known to be false in any material respect or matter. [1967 c.537 §14]

59.140 [Repealed by 1967 c.537 §36]

59.145 Effect of notice filing, registration or license. (1) Neither the fact that a notice filing or an application for registration or a license under the Oregon Securities Law has been filed nor the fact that a person is effectively licensed or a security is effectively registered constitutes a finding by the Director of the Department of Consumer and Business Services that any document filed under the Oregon Securities Law is true, complete and not misleading. Neither such fact nor the fact that an exemption or exception is available for a security or a transaction means that the director has passed in any way upon the merits or qualifications of, or recommended or given approval to, any person, security or transaction.

(2) It is unlawful to make, or cause to be made, to a prospective purchaser, customer or client a representation inconsistent with subsection (1) of this section. [1967 c.537 §15; 1989 c.197 §6; 1997 c.772 §13]

59.150 [Amended by 1957 c.45 §1; repealed by 1967 c.537 §36]

59.155 Director is agent for service of process; manner of service; exceptions. (1) The Director of the Department of Consumer and Business Services shall be an agent for the following persons upon whom may be served at any time any process, notice or demand in a civil proceeding under the Oregon Securities Law, including a proceeding brought by the director:

(a) Every licensee or registrant or applicant for a license or registration of a security, every person who files a notice under ORS 59.049 or 59.175, and every person who offers or sells a security in this state, directly or indirectly, unless the security or the sale is exempt from ORS 59.055; and

(b) Every person, a resident or nonresident of this state, who has engaged in conduct prohibited or made actionable under the Oregon Securities Law.

(2) Service shall be made by:

(a) Serving the director or a clerk on duty at the Department of Consumer and Business Services a copy of the process, notice or demand, with any papers required by law to be delivered in connection with the service, or by mailing to the department a copy of the process, notice or demand by certified or registered mail, and a $2 fee for each party being served;

(b) Transmittal by the person instituting the proceeding of notice of the service on the director and one copy of the process, notice or demand and accompanying papers to the person being served by certified mail:

(A) At such person’s address, if any, as shown by the records of the director; and

(B) At such address the use of which the person initiating the proceedings knows or on the basis of reasonable inquiry has reason to believe is most likely to result in actual notice; and

(c) Filing with the appropriate court or other body, as part of the return of service, of the return receipt of mailing and an affidavit of the person initiating the proceedings that this section has been complied with.

(3) The procedure permitted by this section shall not be available when personal jurisdiction can otherwise be obtained in this state.

(4) After completion of initial service upon the director, no additional documents need be served upon the director to maintain jurisdiction in the same proceeding or to give notice of any motion or provisional process. [1967 c.537 §16; 1987 c.603 §9; 1989 c.197 §7; 1997 c.772 §14]

59.160 [Repealed by 1967 c.537 §36]

(Licensing of Broker-Dealers, Investment Advisers and Salespersons)

59.165 Licensing of broker-dealers, investment advisers and salespersons required. (1) It is unlawful for any person to transact business in this state as a broker-dealer or salesperson unless the person is licensed under the Oregon Securities Law.

(2) No broker-dealer or state investment adviser shall be licensed in this state unless the broker-dealer or state investment adviser has at least one salesperson licensed in this state.

(3) It is unlawful for a broker-dealer, state investment adviser, mortgage banker, mortgage broker or issuer or owner of securities to employ a salesperson or investment adviser representative to act in this state unless the salesperson or investment adviser representative is licensed under the Oregon Securities Law to the broker-dealer, state investment adviser, mortgage banker, mortgage broker or issuer or owner of securities. Only a natural person may be licensed as a salesperson or investment adviser representative.

(4) It is unlawful for a federal covered investment adviser to employ an investment adviser representative who has a place of business in this state to act in this state unless the investment adviser representative is licensed under the Oregon Securities Law to the federal covered investment adviser. Only a natural person may be licensed as an investment adviser representative.

(5) No person:

(a) May be licensed as a salesperson or investment adviser representative for more than one broker-dealer, federal covered investment adviser, state investment adviser, mortgage banker, mortgage broker, issuer or owner of securities at the same time, except as may be allowed by rule or order of the Director of the Department of Consumer and Business Services.

(b) May be licensed as a salesperson or investment adviser representative unless the person is employed by a broker-dealer, federal covered investment adviser, state investment adviser, mortgage banker, mortgage broker, or issuer or owner of securities.

(6) It is unlawful for any person to transact business in this state as a state investment adviser unless the person:

(a) Is licensed as such under the Oregon Securities Law; or

(b) Is licensed as a broker-dealer without the imposition of a condition under ORS 59.215 (4).

(7) Except for federal covered investment advisers whose activities are described by ORS 59.015 (20)(b) and licensed broker-dealers transacting business as federal covered investment advisers in this state, it is unlawful for any federal covered investment adviser to conduct an advisory business in this state unless such person makes notice filings with the director of such documents filed with the Securities and Exchange Commission as the director may by rule or otherwise require and pays the fee, including the notice filing fee, specified in ORS 59.175. The director may issue an order suspending the conduct of an investment advisory business in this state if the director finds that there is a failure to comply with any requirement under this section.

(8)(a) Notwithstanding any other provision of this section, until October 10, 1999, the director may require the licensing as a state investment adviser of any person, otherwise meeting the definition of federal covered investment adviser, who has failed to promptly pay the fees required by ORS 59.175 (8)(g) and (h) after being notified in writing by the director of the nonpayment or underpayment of such fees. A person shall be considered to have promptly paid such fees if the fees are remitted to the director within 15 days following the delivery of written notification by the director.

(b) It is unlawful for any federal covered investment adviser to conduct an investment advisory business in this state if such person fails to obtain the license required by the director under paragraph (a) of this subsection.

(9) Notwithstanding any other provision of this section, an individual performing the activities of an investment adviser representative and who would otherwise be required to be licensed as an investment adviser representative shall not be required to be separately licensed as an investment adviser representative if:

(a) The individual is licensed to a licensed broker-dealer, the broker-dealer is transacting business as a federal covered investment adviser or a state investment adviser under the provisions of subsection (6)(b) of this section and the person is performing investment adviser activities on behalf of the broker-dealer; or

(b) The individual is licensed to a licensed broker-dealer and the broker-dealer directly receives all compensation otherwise earned by the person in connection with the investment advisory activities being transacted in this state. The broker-dealer may or may not further distribute any or all compensation received to the licensed salesperson. [1967 c.537 §17; 1973 c.366 §5; 1985 c.349 §16; 1987 c.603 §10; 1989 c.197 §8; 1993 c.508 §30; 1995 c.622 §12; 1997 c.772 §15; 1999 c.53 §2]

59.170 [Amended by 1961 c.352 §1; repealed by 1967 c.537 §36]

59.175 Procedures for notice filing and licensing; examination; bond, letter of credit or other security; filing trade name or assumed business name; fees. (1) The Director of the Department of Consumer and Business Services by rule shall establish procedures for notice filings required of federal covered investment advisers as well as procedures for licensing broker-dealers, state investment advisers, investment adviser representatives and salespersons. The director may coordinate notice filings or licensing with any national registration, licensing or notice filing system.

(2) The director may require an applicant for a license as a broker-dealer, state investment adviser or federal covered investment adviser for whom a license is required under ORS 59.165 (8), including the applicant’s partners, directors, officers or any person occupying a similar status or performing similar functions, and any person directly or indirectly controlling such applicant and a person for whom application for a license as a salesperson or investment adviser representative is made, to pass an examination on such person’s knowledge and understanding of the Oregon Securities Law and the securities business. The director may establish by rule a fee for the examination.

(3) The director may make such further examination of the applicant and the applicant’s affairs as the director deems advisable and may require by rule or order that the applicant publish an announcement of the application in such manner as the director may specify.

(4)(a) Except as otherwise provided in paragraph (b) or (c) of this subsection, every applicant for a license as a broker-dealer or state investment adviser shall file with the director a corporate surety bond or irrevocable letter of credit issued by an insured institution as defined in ORS 706.008 or such other security as the director may approve by rule running to the State of Oregon in a sum to be established by rule of the director, but in no event more than $100,000.

(b) Licensed broker-dealers subject to section 15 of the Securities Exchange Act of 1934, as amended, are not required to comply with paragraph (a) of this subsection, nor are such licensed broker-dealers required to comply with any net capital requirements imposed by the director by rule or otherwise.

(c) A licensed state investment adviser who has its principal place of business in a state other than this state shall be exempt from the requirements of paragraph (a) of this subsection and shall be further exempt from any net capital requirements imposed by the director by rule or otherwise, provided that any such licensed state investment adviser is registered or licensed as a state investment adviser in the state where it maintains its principal place of business and is in compliance with such state’s bonding or net capital requirements.

(5)(a) Subject to paragraph (b) of this subsection, if the application, surety bond, irrevocable letter of credit or other security and fees are in order and the director is satisfied that the application should not be denied upon one or more of the grounds specified in ORS 59.205 to 59.225, the director shall license the broker-dealer, state investment adviser, salesperson or investment adviser representative.

(b) If the director determines under ORS 59.205 or 59.215 that a condition or restriction should apply to the license, the director, at the time the license is issued, shall specify in writing to the licensee the condition or restriction applicable to the license.

(6) A licensee under ORS 59.165 shall amend the license application when there are material changes in the information contained in the original application.

(7) An applicant for or a person holding a license issued under ORS 59.005 to 59.451 may file with the director a trade name, as defined in ORS 647.005, or an assumed business name, as defined in ORS 648.005. The trade name or assumed business name shall be filed in a form and manner established by rule by the director. If the application is complete and the fee set forth in subsection (8) of this section is paid, the director shall issue an order authorizing the licensee to operate under the trade name or assumed business name. The order shall remain in effect until canceled, suspended or revoked.

(8) The director shall charge and collect for:

(a) An application for a license as a broker-dealer or state investment adviser, a fee of $100;

(b) An application to renew a license as a broker-dealer or state investment adviser, a fee of $50;

(c) An application for a license as a salesperson, a fee of $15;

(d) An application to renew a license as a salesperson, a fee of $15;

(e) An application for a license as an investment adviser representative, a fee of $15;

(f) An application to renew a license as an investment adviser representative, a fee of $15;

(g) A notice filing for a federal covered investment adviser, a fee of $100;

(h) A notice filing renewal for a federal covered investment adviser, a fee of $50; and

(i) A filing for use of a trade name or an assumed business name, a fee of $50.

(9) Except as provided in this subsection, the fees under this section are not refundable. The director may provide for a method of equitably adjusting the payment of fees for broker-dealers, federal covered investment advisers, state investment advisers, salespersons and investment adviser representatives when the director determines that the changes in filing periods and expiration dates under ORS 59.185 are not equitable for the person making the payment. [1967 c.537 §18; 1969 c.137 §4; 1971 c.624 §3; 1985 c.349 §17; 1987 c.603 §11; 1989 c.197 §9; 1991 c.331 §16; 1993 c.508 §31; 1997 c.631 §376; 1997 c.772 §16; 1999 c.53 §3; 2001 c.32 §2]

59.180 [Amended by 1957 c.48 §1; repealed by 1967 c.537 §36]

59.185 Expiration of license; rules for renewal; change in personnel. (1) Every license of a broker-dealer or state investment adviser expires one year after the date of issuance unless the Director of the Department of Consumer and Business Services establishes a different expiration date for purposes of coordination with any national registration or licensing system.

(2) Every license of a mortgage banker’s or mortgage broker’s salesperson expires one year after the date of issuance unless the director establishes a different expiration date for the purposes of coordination with any national registration or licensing system.

(3)(a) Every license of an issuer’s or owner’s salesperson expires when the securities are no longer authorized for sale or one year after the date of issuance, whichever is sooner.

(b) Unless the director establishes a different expiration date for the purposes of coordination with any national registration or licensing system, every license of a salesperson licensed to a broker-dealer and every license of an investment adviser representative licensed to a state investment adviser expires on the same date that the license of the broker-dealer or state investment adviser expires.

(c) Unless the director establishes a different expiration date for the purposes of coordination with any national registration or licensing system, every license of an investment adviser representative licensed on behalf of a federal covered investment adviser expires the earlier of one year after the date of issuance or the date the notice of the federal covered investment adviser expires.

(4) The director by rule shall establish procedures for renewing licenses of broker-dealers, state investment advisers, investment adviser representatives and salespersons, and for the annual renewal of licenses or notice filings made on behalf of federal covered investment advisers.

(5) If there is a change in the partners, directors, officers, persons occupying similar positions or performing similar functions, or persons directly or indirectly controlling a broker-dealer or state investment adviser, written notification of such change shall promptly be filed with the director. No fee shall be required for such notification. An examination may be required of any such individual who is newly connected with or interested in the licensee. [1967 c.537 §19 (1), (2), (3); 1969 c.137 §5; 1985 c.349 §18; 1987 c.603 §12; 1989 c.197 §10; 1993 c.508 §32; 1997 c.772 §17; 1999 c.59 §14]

59.190 [Repealed by 1967 c.537 §36]

59.193 [1973 c.366 §9; 1975 c.491 §3; 1985 c.349 §19; repealed by 1987 c.603 §30]

59.195 Licensees to keep records; inspection; filing of financial reports. (1) Subject to the provisions of section 15 of the Securities Exchange Act of 1934, as amended, and section 222 of the Investment Advisers Act of 1940, as amended, every broker-dealer, state investment adviser, investment adviser representative and salesperson shall make and keep such accounts, correspondence, memoranda, papers, books and other records as the Director of the Department of Consumer and Business Services by rule or order prescribes. All such records of state investment advisers or investment adviser representatives maintained in this state shall be preserved for three years unless the director by rule prescribes otherwise. The director may examine all such records within or without this state at any reasonable time or times and may, without subpoena require the production of such records at the office of the director as often as is reasonably necessary and, in any event, during consideration of any application for licensing or during any proceeding under ORS 59.205 to 59.225.

(2) Subject to the provisions of section 15 of the Securities Exchange Act of 1934, as amended, and section 222 of the Investment Advisers Act of 1940, as amended, every broker-dealer, state investment adviser, investment adviser representative and salesperson shall file with the director such financial reports or other information as the director by rule or order may require. Licensed broker-dealers, state investment advisers, investment adviser representatives and salespersons shall promptly amend any document filed with the director which is or becomes incomplete or inaccurate in any material respect. Federal covered investment advisers shall promptly amend any document otherwise required to be filed with the director when the federal covered investment adviser is required to file an amendment with the United States Securities and Exchange Commission.

(3) A state investment adviser that has its principal place of business in a state other than this state, and the investment adviser representatives of such a state investment adviser, shall be exempt from the requirements of subsection (1) of this section provided that the state investment adviser is registered as a state investment adviser in the state where it has its principal place of business and is in compliance with all such state’s requirements relating to accounts and records.

(4)(a) Every broker-dealer and salesperson of such broker-dealer shall file with the director only such financial reports or other information as is otherwise required to be filed with the United States Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended.

(b) Every state investment adviser that has its principal place of business in a state other than this state, and the investment adviser representatives of the state investment adviser, shall file with the director only the financial reports or other information that is required by the state in which the state investment adviser maintains its principal place of business, provided the state investment adviser is licensed in such state and is in compliance with all of such state’s reporting requirements. [1967 c.537 §19(4), (5); 1985 c.349 §20; 1987 c.603 §13; 1989 c.197 §11; 1993 c.508 §33; 1997 c.772 §18]

59.200 [Amended by 1955 c.198 §1; 1957 c.58 §1; 1959 c.280 §1; repealed by 1967 c.537 §36]

59.205 Grounds for denying, suspending, revoking or imposing condition or restriction on license. Except as provided in ORS 59.215, the Director of the Department of Consumer and Business Services may by order deny, suspend or revoke, or impose conditions or restrictions on, a license of a person as a broker-dealer, federal covered investment adviser that has failed to comply with the provisions of ORS 59.165, state investment adviser, investment adviser representative or salesperson if the director finds that the applicant or licensee:

(1) Is insolvent, either in the sense that the liabilities of the applicant or licensee exceed the assets of the applicant or licensee or that the applicant or licensee cannot meet the obligations of the applicant or licensee as they mature, or is in such financial condition that the applicant or licensee cannot continue in business with safety to the customers of the applicant or licensee.

(2) Has engaged in dishonest, fraudulent or illegal practices or conduct in any business or profession or unfair or unethical practices or conduct in connection with the purchase or sale of any security.

(3) Has willfully or repeatedly violated or failed to comply with any provision of the Oregon Securities Law, any condition or restriction imposed on a license or any rule or order of the director.

(4) Has been convicted of a misdemeanor an essential element of which is fraud or of a felony.

(5) Is not qualified to conduct a securities business on the basis of such factors as training, experience and knowledge of the securities business.

(6) Has filed an application for a license which as of the date the license was issued, or as of the date of an order conditioning, restricting, denying, suspending or revoking a license, was incomplete in any material respect or contained any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact.

(7) Has failed to account to persons interested for all money or property received.

(8) Has not delivered after a reasonable time, to persons entitled thereto, securities held or to be delivered.

(9) Is permanently or temporarily enjoined by a court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of the securities business.

(10) Is the subject of an order of the director conditioning, restricting, denying, suspending or revoking a license as a broker-dealer, federal covered investment adviser, state investment adviser, investment adviser representative or salesperson.

(11) Is the subject of an order of the director under:

(a) ORS chapter 645 involving a violation of any provision of the Oregon Commodity Code or any rule or order of the director adopted or entered under ORS chapter 645; or

(b) ORS 59.840 to 59.980 involving a violation of any provision of ORS 59.840 to 59.980 or any rule or order of the director adopted or entered under ORS 59.840 to 59.980.

(12) Is the subject of any of the following orders that are currently effective and were issued within the last five years:

(a) An order by the securities agency or administrator of another state or Canadian province or territory, or by the Securities and Exchange Commission, entered after notice and opportunity for hearing, denying, suspending or revoking the person’s registration or license as a broker-dealer, federal covered investment adviser, state investment adviser, investment adviser representative or salesperson, or the substantial equivalent of those terms as defined in the Oregon Securities Law;

(b) A suspension or expulsion from membership in or association with a member of a self-regulatory organization registered under the Securities Exchange Act of 1934, as amended, the Commodity Exchange Act or the Investment Advisers Act of 1940, as amended;

(c) A United States Postal Service fraud order;

(d) A cease and desist order entered after notice and opportunity for hearing by the director, the securities agency or administrator of another state or a Canadian province or territory, the Securities and Exchange Commission or the Commodity Futures Trading Commission; or

(e) An order by the Commodity Futures Trading Commission denying, suspending or revoking registration under the Commodity Exchange Act.

(13) Has failed, reasonably to supervise the salespersons or investment adviser representatives of the applicant or licensee.

(14) Has failed to comply with the requirements of ORS 59.195 to make and keep records prescribed by rule or order of the director, to produce such records required by the director or to file any financial reports or other information the director by rule or order may require. [1967 c.537 §20(1); 1969 c.137 §6; 1985 c.349 §21; 1987 c.603 §14; 1989 c.197 §12; 1993 c.508 §34; 1997 c.772 §19; 2001 c.32 §3]

59.210 [Amended by 1955 c.179 §1; repealed by 1963 c.244 §3 (59.211 enacted in lieu of 59.210)]

59.211 [1963 c.244 §4 (enacted in lieu of 59.210); repealed by 1967 c.537 §36]

59.215 Action against applicant or licensee for act or omission of associate; exceptions. The Director of the Department of Consumer and Business Services may enter an order against the applicant or licensee under ORS 59.205 if any partner, officer or director of a broker-dealer or state investment adviser, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker-dealer or state investment adviser has been guilty of any act or omission which would be cause for conditioning, restricting, denying, suspending or revoking the license of an individual broker-dealer, state investment adviser or salesperson, except as follows:

(1) This section shall not apply to any issuer of a federal covered security, a federal covered investment adviser or to ORS 59.205 (1).

(2) The director may not enter an order against a broker-dealer or state investment adviser on the basis of the lack of qualification under ORS 59.205 (5) of any person other than:

(a) The broker-dealer or state investment adviser if the broker-dealer or state investment adviser is an individual; or

(b) A salesperson of the broker-dealer or investment adviser representative of the state investment adviser.

(3) The director may not enter an order solely on the basis of lack of experience if the applicant or licensee is qualified by training or knowledge or both.

(4) If the director finds that an applicant for an initial license or a license renewal as a broker-dealer is not qualified as a state investment adviser, the director may condition the applicant’s license as a broker-dealer upon its not transacting business in this state as a state investment adviser. [1967 c.537 §20(2); 1985 c.349 §22; 1987 c.603 §15; 1989 c.197 §13; 1993 c.508 §35; 1997 c.772 §20; 2001 c.32 §4]

59.220 [Repealed by 1967 c.537 §36]

59.225 Cancellation of license or application; application for withdrawal; effect of suspension or revocation. (1) If the Director of the Department of Consumer and Business Services finds that an applicant or licensee has ceased to do business as a broker-dealer, state investment adviser, investment adviser representative or salesperson, or has failed to maintain a bond or other security required by ORS 59.175 (4) or is subject to an adjudication of mental incompetence or to the control of a committee, conservator or guardian, or cannot be located after reasonable search, the director may cancel the license or application.

(2)(a) A broker-dealer, state investment adviser, investment adviser representative or salesperson may withdraw a license by filing an application to withdraw. Unless the director determines that the license should be suspended or revoked, the director shall allow the withdrawal subject to any conditions, limitations and restrictions the director may impose.

(b) A federal covered investment adviser may terminate a notice filing pursuant to ORS 59.165 (7) by providing the director with written notice of such termination in accordance with the procedures established by the director.

(3) When an investment adviser representative of a federal covered investment adviser begins or terminates an association with such federal covered investment adviser, the federal covered investment adviser or investment adviser representative shall promptly notify the director in writing in accordance with the procedures established by the director.

(4) The suspension of a license of a broker-dealer or state investment adviser shall suspend the license of any salesperson of the broker-dealer or the license of any investment adviser representative of the state investment adviser. The revocation, cancellation, withdrawal or expiration of a license of a broker-dealer or state investment adviser shall cancel the license of any salesperson of the broker-dealer or the license of any investment adviser representative of the state investment adviser.

(5) The suspension of a registration of securities suspends the license of any salesperson licensed to the issuer or owner of the securities. The revocation, cancellation, withdrawal or expiration of the registration of securities cancels the license of any salesperson licensed to the issuer or owner of the securities. [1967 c.537 §20(3), (4), (5); 1985 c.349 §23; 1987 c.603 §16; 1989 c.197 §14; 1993 c.508 §36; 1997 c.772 §21]

59.230 [Repealed by 1967 c.537 §36]

(Powers of Director)

59.235 General supervision over persons dealing in securities. Subject to section 18 of the Securities Act of 1933, as amended, section 15 of the Securities Exchange Act of 1934, as amended, and sections 203A and 222 of the Investment Advisers Act of 1940, as amended, the Director of the Department of Consumer and Business Services shall have general supervision and control over all issuers, registrants of securities, broker-dealers, federal covered investment advisers, state investment advisers, investment adviser representatives and salespersons residing or doing business in this state and engaged in any activity with respect to securities or any aspect of the securities business. All such persons and their records and everything connected with their activities shall be subject to examination by the director at any time. The provisions of this section and of any section of the Oregon Securities Law relating to examinations shall extend to any person who should have been licensed as a broker-dealer, state investment adviser, investment adviser representative or salesperson, any person exempted by rule from those definitions or any person whose license has expired or has been withdrawn, canceled, suspended or revoked. The director may collect from each such person the actual expenses incurred in that examination. [1967 c.537 §21; 1985 c.349 §24; 1987 c.603 §17; 1989 c.197 §15; 1993 c.508 §37; 1997 c.772 §22]

59.240 [Repealed by 1955 c.198 §2]

59.245 Investigations; publicity with respect to violations; cease and desist order. The Director of the Department of Consumer and Business Services:

(1) May make such public or private investigations within or outside this state as the director deems necessary to determine whether a person has violated or is about to violate any provision of the Oregon Securities Law or any rule or order of the director, or to aid in the enforcement of the Oregon Securities Law or in the formulation of rules and forms thereunder;

(2) May require or permit a person to file a statement in writing, under oath or otherwise as the director determines, as to all the facts and circumstances concerning the matter to be investigated;

(3) May publish information concerning any violation of the Oregon Securities Law or any rule or order of the director; and

(4) If the director has reason to believe that any person has engaged, is engaging or is about to engage in any violation of the Oregon Securities Law, the director may issue an order, subject to ORS 59.295, directed to the person to cease and desist from the violation or threatened violation. [1967 c.537 §22; 1973 c.366 §6; 1999 c.315 §2]

59.250 [Amended by 1963 c.244 §5; repealed by 1967 c.537 §36]

59.255 Enjoining violations; fine; appointment of receiver; attorney fees; damages to private parties. (1) Whenever it appears to the Director of the Department of Consumer and Business Services that a person has engaged, is engaging or is about to engage in an act or practice constituting a violation of any provision of the Oregon Securities Law or any rule or order of the director, the director may bring suit in the name and on behalf of the State of Oregon in the circuit court of any county of this state to enjoin the acts or practices and to enforce compliance with the Oregon Securities Law or such rule or order. Upon a proper showing, a permanent or temporary injunction, restraining order or writ of mandamus shall be granted. The court may fine the person against whom the order is entered not more than $20,000 for each violation, which shall be entered as a judgment and paid to the General Fund of the State Treasury. Each violation is a separate offense. In the case of a continuing violation, each day’s continuance is a separate violation, but the maximum penalty for any continuing violation shall not exceed $100,000. If the court finds that the defendant has violated any provision of the Oregon Securities Law or any such rule or order, the court may appoint a receiver, who may be the director, for the defendant or the defendant’s assets. The court may not require the director to post a bond. The court may award reasonable attorney fees to the director if the director prevails in an action under this section. The court may award reasonable attorney fees to a defendant who prevails in an action under this section if the court determines that the director had no objectively reasonable basis for asserting the claim or no reasonable basis for appealing an adverse decision of the trial court.

(2) The director may include in any action authorized by subsection (1) of this section:

(a) A claim for restitution or damages under ORS 59.115 or 59.127, on behalf of the persons injured by the act or practice constituting the subject matter of the action. The court shall have jurisdiction to award appropriate relief to such persons, if the court finds that enforcement of the rights of such persons by private civil action, whether by class action or otherwise, would be so burdensome or expensive as to be impractical; or

(b) A claim for disgorgement of illegal gains or profits derived. Any recovery under this paragraph shall be turned over to the General Fund of the State Treasury unless the court requires other disposition.

(3) The provisions of this section shall not apply to a failure to file a notice and pay a fee pursuant to ORS 59.049 (1), (2) or (3), nor to a failure to file a notice and pay a fee pursuant to ORS 59.165 (7), nor to a failure to pay a fee pursuant to ORS 59.175 (8), nor to a violation of any rule adopted by the director pursuant to ORS 59.049 (1), (2) or (3), 59.165 (7) or 59.175 (8). [1967 c.537 §23; 1971 c.394 §1; 1975 c.300 §4; 1981 c.897 §10; 1985 c.349 §26; 1995 c.696 §11; 1997 c.772 §23; 1999 c.53 §4; 1999 c.315 §3]

59.260 [Repealed by 1967 c.537 §36]

59.265 Procedure when assets or capital of broker-dealer or investment adviser found impaired; involuntary liquidation. (1) When the Director of the Department of Consumer and Business Services ascertains that the assets or capital of any broker-dealer not otherwise registered under Section 15 of the Securities Exchange Act of 1934, as amended, or state investment adviser that has its principal place of business in this state are impaired, or that such person’s affairs are in an unsound condition, the director may take possession of all the property, business and assets of such person located in this state and retain possession of them pending the further proceedings specified in this section. The director shall inventory the assets and liabilities of such person. The director shall file one copy of the inventory in the office of the director and one copy in the office of the clerk of the circuit court of the county in which the principal place of business of such person is located, and shall mail one copy to each shareholder or partner of such person at the last-known address of the shareholder or partner. The clerk of the court shall file the inventory as a pending proceeding and give it a docket number.

(2) If any person refuses to permit the director to take such possession, the director may apply to the circuit court of the county in which the principal place of business of such person is located for an order appointing a receiver, who may be the director, to take such possession.

(3) If the deficiency in assets or capital has not been made good or the unsound condition remedied within 60 days from the date when the director or receiver took possession, the property, business and assets of such person located in this state shall be liquidated. If a receiver has not been appointed, the director shall apply for such appointment by the court in which the inventory was filed. The liquidation shall proceed as provided by law for liquidation of a private corporation in receivership.

(4) The expenses of the receiver and compensation of counsel, as well as all expenditures required in the liquidation proceedings, shall be fixed by the director, subject to the approval of the court, and, upon certification by the director, shall be paid out of the funds in the hands of the director as such receiver. [1967 c.537 §24; 1987 c.603 §18; 1993 c.508 §38; 1997 c.772 §24]

59.275 Burden of proof. It is not necessary to negative any of the exemptions or classifications provided in the Oregon Securities Law in a complaint, action, information, indictment or other writ or proceeding laid or brought under the Oregon Securities Law; and the burden of proof of an exemption or classification shall be upon the party claiming the benefit of such exemption or classification. [1967 c.537 §25]

59.285 Rules; financial statements. (1) In accordance with this section and ORS 183.310 to 183.550 the Director of the Department of Consumer and Business Services may from time to time make, amend and rescind such rules as are necessary to carry out the provisions of the Oregon Securities Law. The director may classify securities, persons and matters within the jurisdiction of the director, and prescribe different requirements for different classes.

(2) No rule may be made, amended or rescinded unless the director finds that the action is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the provisions of the Oregon Securities Law.

(3) Except as provided in subsection (4) of this section, all financial statements required by the Oregon Securities Law shall be prepared in accordance with generally accepted accounting principles. The director may by rule prescribe:

(a) The form and content of financial statements required under the Oregon Securities Law;

(b) The circumstances under which consolidated financial statements shall be filed; and

(c) Whether any required financial statements shall be certified by independent or certified public accountants.

(4) Subsection (3) of this section does not apply to any broker-dealer that is subject to the financial reporting requirements of the Securities Exchange Act of 1934, as amended, to any federal covered investment adviser or to any state investment adviser that has its principal place of business outside this state and is registered with the state in which the state investment adviser’s principal place of business is located. [1967 c.537 §28; 1987 c.603 §19; 1997 c.772 §25]

59.295 Notice of orders; hearings on orders. (1) Except as provided in ORS 183.090, upon the entry of an order under the Oregon Securities Law, the Director of the Department of Consumer and Business Services shall promptly give appropriate notice of the order as provided in this subsection. The notice shall state that a hearing will be held on the order if a written demand for hearing is filed with the director within 20 days after the date of service of the order. The notice shall be given to:

(a) The issuer and applicant or registrant affected thereby with respect to orders entered pursuant to ORS 59.085 and 59.105;

(b) The applicant or licensee and any investment adviser representative or salesperson affected thereby with respect to orders entered pursuant to ORS 59.205; or

(c) All interested persons with respect to orders entered pursuant to any other provision of the Oregon Securities Law, except ORS 59.095.

(2) If timely demand for a hearing is filed by a person entitled to notice of the order, the director shall hold a hearing on the order as provided by ORS 183.310 to 183.550. In the absence of a timely demand for a hearing, no person shall be entitled to judicial review of the order.

(3) After the hearing, the director shall enter a final order vacating, modifying or affirming the order.

(4) The director may enter a final order revoking a license or registration notwithstanding the fact that the license or registration has expired, if the initial order of revocation was issued prior to expiration of the license or registration. [1967 c.537 §26; 1985 c.349 §27; 1987 c.603 §22; 1989 c.197 §16; 1991 c.734 §2d; 1997 c.772 §26]

59.305 Judicial review of orders. (1) A person aggrieved by an order of the Director of the Department of Consumer and Business Services which has been the subject of a timely application for hearing before the director shall be entitled to judicial review of the order under ORS 183.310 to 183.550.

(2) No decree of a reviewing court under ORS 183.310 to 183.550 shall bar the director from thereafter vacating or modifying an order involved in the proceeding for review, or entering any new order, for a proper cause which was not decided by the reviewing court. [1967 c.537 §27]