SECTIONS 25400-25404 - California Statutes

CORPORATIONS CODE

SECTION 25400-25404

25400. It is unlawful for any person, directly or indirectly, in
this state:
(a) For the purpose of creating a false or misleading appearance
of active trading in any security or a false or misleading appearance
with respect to the market for any security, (1) to effect any
transaction in a security which involves no change in the beneficial
ownership thereof, or (2) to enter an order or orders for the
purchase of any security with the knowledge that an order or orders
of substantially the same size, at substantially the same time and at
substantially the same price, for the sale of any such security, has
been or will be entered by or for the same or different parties, or
(3) to enter an order or orders for the sale of any security with the
knowledge that an order or orders of substantially the same size, at
substantially the same time and at substantially the same price, for
the purchase of any such security, has been or will be entered by or
for the same or different parties.
(b) To effect, alone or with one or more other persons, a series
of transactions in any security creating actual or apparent active
trading in such security or raising or depressing the price of such
security, for the purpose of inducing the purchase or sale of such
security by others.
(c) If such person is a broker-dealer or other person selling or
offering for sale or purchasing or offering to purchase the security,
to induce the purchase or sale of any security by the circulation or
dissemination of information to the effect that the price of any
such security will or is likely to rise or fall because of market
operations of any one or more persons conducted for the purpose of
raising or depressing the price of such security.
(d) If such person is a broker-dealer or other person selling or
offering for sale or purchasing or offering to purchase the security,
to make, for the purpose of inducing the purchase or sale of such
security by others, any statement which was, at the time and in the
light of the circumstances under which it was made, false or
misleading with respect to any material fact, or which omitted to
state any material fact necessary in order to make the statements
made, in the light of the circumstances under which they were made,
not misleading, and which he knew or had reasonable ground to believe
was so false or misleading.
(e) For a consideration, received directly or indirectly from a
broker-dealer or other person selling or offering for sale or
purchasing or offering to purchase the security, to induce the
purchase or sale of any security by the circulation or dissemination
of information to the effect that the price of such security will or
is likely to rise or fall because of the market operations of any one
or more persons conducted for the purpose of raising or depressing
the price of such security.

25401. It is unlawful for any person to offer or sell a security in
this state or buy or offer to buy a security in this state by means
of any written or oral communication which includes an untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading.

25402. It is unlawful for an issuer or any person who is an
officer, director or controlling person of an issuer or any other
person whose relationship to the issuer gives him access, directly or
indirectly, to material information about the issuer not generally
available to the public, to purchase or sell any security of the
issuer in this state at a time when he knows material information
about the issuer gained from such relationship which would
significantly affect the market price of that security and which is
not generally available to the public, and which he knows is not
intended to be so available, unless he has reason to believe that the
person selling to or buying from him is also in possession of the
information.

25403. (a) Every person who with knowledge directly or indirectly
controls and induces any person to violate any provision of this
division or any rule or order thereunder shall be deemed to be in
violation of that provision, rule, or order to the same extent as the
controlled and induced person.
(b) Any person that knowingly provides substantial assistance to
another person in violation of any provision of this division or any
rule or order thereunder shall be deemed to be in violation of that
provision, rule, or order to the same extent as the person to whom
the assistance was provided.
(c) It shall be unlawful for any person directly or indirectly to
do any act or thing which would be unlawful for that person to do
under any provision of this division or any rule or order thereunder
through or by any other person.
(d) Nothing in this section shall be construed to limit the power
of the state to punish any person for any conduct which constitutes a
crime under any other statute.

25404. (a) It is unlawful for any person to knowingly alter,
destroy, mutilate, conceal, cover up, falsify, or make a false entry
in any record, document, or tangible object with the intent to
impede, obstruct, or influence the administration or enforcement of
this division.
(b) It is unlawful for any person to knowingly make an untrue
statement to the commissioner during the course of licensing,
investigation, or examination, with the intent to impede, obstruct,
or influence the administration or enforcement of any provision of
this division.