Unit 4 Administrative Provisions and Other Remedies Flashcards
Investigations and Subpoenas
*The administrator has the power to initiate an investigation to determine if the USA was violated
*The administrator can subpoena persons to
testify
*Failure to appear would be punishable as
contempt of court
Criminal Penalties
*Are for willful violations of the act
*Max penalty is $5,000 fine, not more than 3 years in prison, or both
*The statute of limitations for these actions is 5 years from date of violation
Civil Liabilities
- If person is found in violation without willful intent, only civil liability applies
*Statute of limitations is 3 years from incident, or 2 years from discover, whichever is first (different than criminal)
Scope of the Act
- The USA gives the state
administrator power to amend or rescind any rule that is deemed necessary to follow the act
Jurisdiction (Administrator)
The administrator has jurisdiction on:
* Any offers to buy or sell directed into, accepted in, or directed out of their state
* The customer or agent is a resident of the state.
* The transaction was affected in the state.
*Not if merely transported through their state
Jurisdiction over Media Offerings
- If an offer is made in a bona fide newspaper of national distribution it is not considered an offer in
any one state. - (e.g., The Dallas Morning News) the offer would only be considered made to Texas residents even though The Dallas Morning News is distributed outside of Texas
- A nationally circulated newspaper (ex: USA Today) although published in New York, is considered to have no state of offer because 2/3s of its circulation is
outside the state where it is published
Right of Rescission
*If a person realizes that he has effected an
illegal transaction, they can offer to rescind
the contract; the purchaser has 30 days to
accept or reject the offer
*If no response is provided, may no longer file a lawsuit
