Chap. 529.—An ACT to amend and re-enact the title, and to amend and re-enact
an act entitled an act to prevent unfairness, imposition or fraud in the sale or
disposition of certain “securities” herein defined by requiring an inspection
thereof, providing for such inspection, supervision and regulation of the
business of any person, association, partnership, or corporation, engaged or
intending to engage, whether as principal, broker or agent, in the sale of any
such securities in the State of Virginia as may be necessary to prevent un-
fairness, imposition or fraud in the sale or disposition of said securities, and
prescribing penalties for the violation thereof, approved March 23, 1918, as
amended by an act approved March 20, 1920, as amended by an act approved
March 29, 1923, and as amended by an act approved March 25, 1926, so that
the title thereto will read:

An act to prevent unfairness, imposition or fraud in the offer for sale,
advertisement for sale, sale, disposition, distribution, and/or promotion of
certain “securities” herein defined and designated, including subdivisions of
land lying outside of the State, in certain cases, by requiring an inspection
and qualification of such securities, and of such land, providing for such in-
spection and qualification and for the supervision and regulation of the
business of, and for the licensing, in certain cases, of, any person, association,
partnership, or corporation, engaged or intending to engage, whether as issuer,
principal, promoter, dealer, broker, agent, or advertiser, in the offer for sale,
advertisement for sale, sale, disposition, distribution and/or promotion, in
the State of Virginia, of any such securities and/or of any such land, as
may be necessary to prevent unfairness, imposition or fraud, and to procure
and insure proper disclosure of matcrial facts, in the offer for sale, adver-
tisement for sale, sale, disposition, distribution and/or promotion of said
securities, and/or of said land and prescribing penalties for violation thereof,
approved March 23, 1918, and as amended from time to time. [S B 265}

Approved March 28, 1928

1. Be it enacted by the general assembly of Virginia, That the title
thereto and the act entitled an act to prevent unfairness, imposition or
fraud in the sale or disposition of certain “securities” herein defined
by requiring an inspection thereof. providing for such inspection, super-
vision and regulation of the business of any person, association, partner-
ship, or corporation, engaged or intending to engage, whether as
principal, broker or agent, in the sale of any such securities in the
State of Virginia as may be necessary to prevent unfairness, imposi-
tion or fraud in the sale or disposition of said securities, and prescrib-
ing penalties for the violation thereof, approved March twenty-third.
nineteen hundred and eighteen, as amended by an act approved March
twentieth, nineteen hundred and twenty, as amended by an act approved
March twenty-ninth, nineteen hundred and twenty-three, as amended
by an act approved March twenty-fifth, nineteen hundred and twenty-
six, be amended, and re-enacted, title and act, so that the title will
read as follows:

An act to prevent unfairness, imposition or fraud in the offer for
sale, advertisement for sale, sale, disposition, distribution, and/or pro-
motion of certain “securities” herein defined and designated, including
subdivisions of land lying outside of the State, in certain cases, bv
requiring an inspection and qualification of such securities, and of such
land, providing for such inspection and qualification and for the super-
vision and regulation of the business of, and for the licensing, in certain
cases, of, any person, association, partnership, or corporation, engaged
or intending to engage, whether as issuer, principal, promoter, dealer,
broker, agent, or advertiser, in the offer for sale, advertisement for
sale, sale, disposition, distribution, and/or promotion, in the State of
Virginia, of any such securities and/or of any such land, as may be
necessary to prevent unfairness, imposition or fraud, and to procure
and insure proper disclosure of material facts, in the offer for sale.
advertisement for sale, sale, disposition, distribution and/or promo-
tion of said securities, and/or of said land, and prescribing penalties
for the violation thereof :

And so that the act will read as follows:

Section 1. That, on and after the day on which this act takes effect.
no securities, such as are designated in section three hereof, and no
subdivisions of land lying outside of this State, as designated and pro-
vided in this act, shall be offered for sale, advertised for sale, sold.
disposed of, distributed, and/or promoted except after qualification
and/or registration by notification, as the case may be, and/or until
there shall have been a full compliance with all applicable provisions
and requirements of this act, unless specifically excepted or exempted
from the operation hereof, and it shall be unlawful for any person.
natural or artificial, to offer for sale, advertise for sale, sell, dispose
of. distribute and/or promote, and/or, in any manner, further, or par-
ticipate in, the offer, advertisement, sale, disposition, distribution and ‘or
promotion of any securities as defined and designated in this act.
and/or of any subdivisions of land lving outside of this State as desig-
nated and provided in this act, unless and until all applicable provisions
of this law shall have been complied with.

section 2. The term “securities” as used in this act shall be taken
to mean stock, stock certificates, shares, bonds, debentures, certificates
of participation, rights of participation or assignments of interest in
any enterprise or project, contracts, contracts or bonds for the sale and
conveyance of land lying outside of this State on deferred payments or
installment plan, subscriptions to the capital stock or other securities
of any corporation or joint stock company, whether the same has been
chartered or organized or not; or other instruments and rights in the
nature thereof by whatsoever name known or called.

The term “enterprise” or “project” as used in this act shall be taken
to mean any business undertaking, enterprise, project, venture or
activity for the promotion or furtherance of which “securities” as
herein defined are made, created, issued, or otherwise originated, offered
or advertised for sale, sold, disposed of, distributed and/or promoted,
and/or for the promotion of the sale of any land included in the pro-
visions of this act.

The word “promoter” as used in this act shall include any person,
issuer, agent, broker, dealer, promoter, advertiser, partnership, associa-
tion or corporation who shall sell, offer for sale, advertise for sale,
dispose of, distribute and/or promote, or do any act in furtherance of,
or participation in, the sale, barter or exchange of any “securities” as
defined in, or of any land included in the provisions of, this act.

The term “issuer” as used in this act shall include any person,
partnersh‘p, association, or corporation, who shall issue, make, devise,
create, or otherwise originate any security such as are designated in
section three of this act.

The word “agent” as used in this act shall include any person,
natural or artificial, who shall, in individual or corporate capacity, sell,
offer for sale, advertise for sale, dispose of, distribute, promote, or do
any act in furtherance of the sale, barter or exchange, or otherwise in
any manner participate in the sale, offer for sale, advertisement for sale,
disposition, distribution, and/or promotion of the sale, offer for sale,
barter or exchange of, any securities as defined and designated in,
and/or of any land included in the provisions of this act.

The words “advertising” and “advertisement” as used in this act
shall not be taken to refer in any way to newspapers, magazines,
periodicals or other regular mediums of advertisement unless the pub-
lisher shall have written notice from the State corporation commission
that it has reason to believe that the issue of securities or offering of
out of the State land being advertised or proposed to be advertised is
required to be qualified or registered under the provisions of this act,
such newspapers, magazines, periodicals or other regular mediums of
advertisement not being subject to the provisions of this law, in absence
of such notice.

Section 3. Before any securities, as defined in this act, and/or lots,
parcels and/or units of and/or in any subdivision of land lying outside
of this State, within the scope of any one or more of the designations
(a) to (n) of this section of this act, shall be offered for sale, adver-
tised for sale, sold, disposed of, distributed and/or promoted, in this
State, and/or before there be done, or participated in, any act in further-
ance of any such offer, advertisement, sale, barter or exchange, on and
after the day on which this act takes effect, such securities and/or such
lots, parcels and units of land must be first qualified in accordance with
the provisions of this act, unless specifically excepted or exempted by
other provisions of this act:

(a) All securities to promote or induce the sale of which proft,
gain, advantage, incidents and/or features, unusual in the ordinary
course of legitimate business is or are in any way advertised or promised
as a material basis of value.

(b) The securities of any enterprise, association, partnership or
corporation where there is offered or paid more than ten per centum of
the selling price of such securities either in money, stock, property or
otherwise, either directly or indirectly as promotion fee and/or as com-
pensation for the organization of the issuing enterprise, association.
partnership or corporation, and/or the flotation and sale of its securi-
ties, including attorney fees, and all other expenses, but excltding
charter fees and fees under this act.

(c) The securities of any enterprise, association, partnership or cor-
poration which has included or proposes to include in its assets as a
material part thereof, oil, gas, coal or mineral lands, services of any
person or persons, leases or rights, options, patents, trademarks, copv-
rights, formulae, goodwill, promotion, or other similar tangible and: or
intangible assets, or which has issued or proposes to issue a material
part of its securities in payment for formulae, options, patents, trade-
marks, copyrights, goodwill, promotion, or other similar intang:ble
assets, oil, gas, coal or mineral lands, services of any person or persons,
or any consideration of a similar nature other than money.

(d) Lots or units of unimproved or undeveloped land lying outside
of this State sold or offered for sale on any deferred payment or in-
stallment plan, where the value of such land materially depends on
the future performance of any stipulation or promise to furnish irriga-
tion or transportation facilities, sidewalks, sewers, gas, light, streets.
or other value enhancing utility or improvements, or contracts made
or issued for the sale of, or interest in, such lots or units of land.

(e) Contracts issued by persons or companies which purport to
entitle the holder thereof to a loan from the issuer after the payment
of certain installments or dues, or contracts of a similar nature by
whomsoever issued, or by whatsoever name called, other than an insur-
ance contract or a promise to pay a certain sum of money.

(f) Any security which purports to permit persons, associations.
partnerships or corporations to purchase any property, real, personal.
or intangible at a less price or upon more favorable terms than: the
general public is permitted to purchase same.

(zg) Units or lots of oil or mineral lands or any interest therein.

(h) Units or lots of land lying outside of this State, which land
is divided so as to be planted in trees, vines, or shrubs or is divided or
to be divided into town or suburban lots, or any interest therein, whether
or not there be any deferment of payment and regardless of whether
there be any value enhancing promises.

(i) Shares, participations, rights or interests, by whatsoever name
or term designated or described, in investment trusts and/or in any
enterprise or project having the essential characteristics of what is
commonly known as an investment trust, whether under the English
or American theory or plan, and by whatsoever term or name known
or called, and also the securities thereof for capital purposes.

(j) Securities in or under a declaration of trust or other such
agreement and/or of any enterprise or project having the essential
elements of a declaration of trust by whatsoever term or name known
or called, whether for capital purposes or as participations in the trust
or other such agreement.

(k) Securities, issued by any enterprise or project, whether styling
itself by the term “home company” or by some other title, by which
there shall be received single payments, installment payments, or con-
tributions to be held or used in any plan of accumulation or investment,
and/or for the collection and payment on the partial payment or install-
ment or single payment plan when under the terms of the contract
constituting such security all or a part of the total amount received is
to be repaid as a loan, annuity, accumulation, or otherwise, and/or the
securities, whether issued for capital or in the conduct of its business,
of any enterprise or project having the essential characteristics of the
foregoing, or substantially similar thereto, by whatsoever name known
or called.

(1) Construction bonds and other securities for construction pur-
poses when the total amount secured by and/or based on the property
involved is over twenty-five thousand dollars and the bonds and/or
other securities are in any way dependent upon the enhancement in
value by the proposed improvements and construction for security
and/or safety as a conservative investment. Nothing herein shall be
construed to apply to loans secured by deed of trust or otherwise
when there is not a distribution to the public, if there be a bona fide
loan as an investment even though for construction purposes.

(m) Securities issued by operators, and for the purpose of raising
capital for operation, under the uniform small loan law and/or under
the industrial loan law, whether to be so used, directly or indirectly,
and whether to be so used in this State and/or elsewhere, as dis-
tinguished from securities subsequently issued in the regular course
of business.

(n) Any security as to which non-applicability of the law or ap-
plication of an exemption is voluntarily waived, and the securing of an
authorization or license without obtaining an official ruling by express
order of the commission shall constitute such voluntary waiver.

The State corporation commission shall have jurisdiction upon
application, payment of the filing fee and submission of such facts
and data as may be necessary for the purpose, after full hearing and
due consideration, to determine whether or not a particular security,
enterprise or project, is within the scope of any one or more of the
subdivisions of this section of this act, and it shall have jurisdiction to
enter an order to such effect, which, subject to the right of appeal, shall
be conclusive on the same state of facts in any court, in which the
matter may come for adjudication whether in a civil or a criminal
case, and it shall have authority, and it shall be its duty if desired, to
issue a certificate to such effect in a case in which it determines, whether
upon formal or informal application, that a certain security, enterprise
or project, is not within the scope of any one or more of the subdivisions
of this section.

Should it be determined by the commission upon such application
that the security or land is within the scope of the provisions of this
act requiring a qualification, it shall proceed, if desired by the applicant,
to determine, upon the data then filed, or as subsequently filed, whether
an authorization or permit should issue.

Section 4. Except as otherwise expressly provided in this act, the
provisions of this act shall not apply to the sale of any securities of
any of the following kinds nor in any of the following transactions,
notwithstanding that any one or more of the subdivisions of section
three are, or may be, applicable, and the commission shall have jurisdic-
tion, upon formal or informal application, payment of filing fee, and
submission of such facts and data as may be necessary, to determine
whether or not particular security or securities, transaction or trans-
actions, or series of transactions, is or are exempt under the provisions
of this section, and to issue, if desired, a certificate to the effect that
an exception applies when so found:

(a) Any security issued or guaranteed by the United States or
any territory or insular possession thereof, or by the District ot
Columbia or by any State or political subdivision or agency thereof.

(b) Any security issued or guaranteed by any foretgn government
with which the United States is at the time of the sale or offer of
sale thereof maintaining diplomatic relations, or by any State, or prov-
ince thereof having the power of taxation or assessment.

(c) Any security issued by a national bank or by any Federal land
bank or joint stock land bank or national farm loan association under
the provisions of the Federal farm loan act of July seventeenth, nine
teen hundred and sixteen, or by the war finance corporatior or bv
any corporation created or acting as an instrumentality of the govern-
ment of the United States pursuant to authority granted by the congress
of the United States or pursuant to other valid Federal authority.

(d) Any security issued or guaranteed as to principal, by a cor-
poration owning or operating a railroad or any other public service
utility, provided, that such corporation is subject to regulation or super-
vision either as to its rates and charges or as to the issue of its own
securities by a public commission, board or officer of the government
of the United States, or of any State, territory or insular possession
thereof, or of any municipality located therein, or of the District of
Columbia, or of the Dominion of Canada or any province thereof:
also equipment notes or bonds based on chattel mortgages, leases, or
agreements for conditional sales, of cars, motive power or other rolling
stock mortgaged, leased or sold to or furnished for the use of or upen
a railroad or other public service, or utility corporation, or equipment
trust certificates, or equipment notes or bonds where the ownership
or title of such equipment is pledged or retained in accordance with
the provisions of the laws of the United States or of any State, or of
the Dominion of Canada, to secure the payment of such equipment trust
certificates, bonds or notes.

(e) Any security issued by a State bank or trust company incor-
porated under the laws of and subject to the supervision and control of
any State or territory of the United States or of any insular possession
thereof, provided such State bank or trust company is being, or will
be, regularly examined by the proper authorities of such State or terri-
tory of the United States or any insular possession thereof.

(f) Any security issued by a corporation organized exclusively and
solely for religious, benevolent, charitable, educational, fraternal, or re-
formatory purposes and not for pecuniary profit, and no part of the
net earnings of which inures to the benefit, directly or indirectly, of
‘any private stockholder, member, or other individual, and no part of
the dues or other income and/or property of which has inured, 1s to
inure, or shall inure, directly or indirectly, to any stockholder, member,
officer, director and/or employee, or to any other person, except as
fair compensation for any services rendered or as other fair considera-
tion upon valid contract, other than as beneficiary under the purposes
of such corporation.

(g) Any security issued by a building and loan association which
is incorporated under the laws of this State, provided such building
and loan association has been organized and is subject to and has not
exempted itself from regular examination and supervision by the
proper authorities of this State.

(h) Securities listed on the New York stock exchange, Chicago
stock exchange, Philadelphia stock exchange, or the Baltimore stock
exchange, or the Richmond stock exchange, or any other recognized
and responsible stock exchange which has been previously approved
by the corporation commission, which securities have been so listed
pursuant to official authorization by such exchange, and all securities
senior to or upon a parity with any security so listed, or evidences of
indebtedness guaranteed by companies, any stock of which is so listed,
provided this exemption shall apply only so long as the listings of such
securities shall remain in effect, and so long as the exchange remains
approved under the provisions of this act. Application for approval
may be made by any organized stock exchange in such manner and
upon such forms as may be prescribed by the commission, accompanied
by relevant facts and data and the payment of an application for
approval fee of one hundred dollars, and the commission shal! have
such hearing and make such investigation as may be necessary to de-
termine the propriety of giving approval, including such inspection as
may be deemed necessary or desirable, the necessary cost of which 1s
to be borne by the applicant, and in the exercise of its sound discretion
the commission may enter an order of approval upon the finding that
the requirements for listing are such as to effect substantially the pub-
licity and reasonable protection of the public now existing in the cases
of the exchanges herein approved and as contemplated by the Virginia
securities law. The commission shall have jurisdiction, after due notice,
opportunity to be heard, investigation, and hearing, to revoke the ap-
proval of any exchange which has been approved by it and/or to revoke
the recognition of any of the exchanges approved herein upon finding
that the practices or requirements of any such exchange so approved or
recognized herein, as the case may be, have been so changed or modified
or are in their actual operation found to be such that the publicity and
protection contemplated by this law is no longer given, or as a matter
of fact is not given, and the principles of res adjudicata ordinarily ap-
plicable in civil matters shall not be applicable to this matter which 1s
hereby declared to be administrative rather than judicial. Notice here-
under may he by registered mail, at least ten days before such hearing.
and acceptance of approval by this act and securing approval there-
under shall constitute consent to such notice. !

(i) Securities of any insurance, surety, guaranty, or other such
company, subject to, and actually licensed and supervised by the bureau
of insurance and/or the bureau of insurance and banking, as the
case may be, provided that this exemption shall not apply to the flotation
of securities of such company prior to the actual licensing and taking
effect of the supervisory powers of the bureau of insurance and/’or
bureau of insurance and banking.

(j) Securities of companies subject to supervision and actually
supervised by the banking division and/or bureau of insurance and
banking, as the case may be, other than those herein otherwise excepted,
provided that this exemption shall not apply to the original flotation of
the securities of such company or enterprise, nor to any securities issued
prior to the actual taking effect of the supervisory powers of the
division of banking and/or bureau of insurance and banking, as the
case may be, and provided further that this exemption shall not apply
to the securities of companies, firms or individuals engaged in, or pro-
posing to engage in, business under the uniform small loan law, and ‘or
under the industrial loan law, even though supervisory powers have
taken effect and are in effect.

(k) Securities of an enterprise or project which, for the three years
next preceding has paid dividends, out of earnings only, at the guaran-
teed rate in the case of preferred stock, or not less than five per centum
of the par value, annually, or not less than two dollars and fifty cents
per annum per share in the case of no par securities, on the stock of
the same class as that being so offered and sold or on an issue inferior
in right to participate in earnings or profits to the security being so
offered and sold, provided that in cases in which the enterprise or
project is new but consists of a combination of two or more previously
going concerns, this exemption shall apply only if the combined earnings
applicable to dividends for the three years next preceding are sufficient

to pay dividends on the securities of the new enterprise at the rates
above mentioned.
(1) Stock, as distinguished from other securities, of any domestic
corporation whose total authorized capital is not in excess of twenty-
five thousand dollars.

(m) Securities, otherwise subject to qualification under this act,
offered for sale, sold, and advertised for sale only at the place or places
of business of regularly established dealers in securities duly licensed
under this act, and, or through the regularly retained and employed
salesmen or solicitors of such dealers outside the regular place or places
of business of such licensed dealer.

The exceptions contained in this subsection (m) of section four shall
not be operative unless such dealer has been duly licensed under the
provisions of this act, and shall have prior to such sale, or offering, or
advertisement, filed with the State corporation commission a notification
for registration of such offering accompanied by a statement duly exe-
cuted by such dealer that such dealer has no information which leads
‘him to believe that the maximum total overhead expense of organiza-
tion and flotation, including commissions, exceeds a named per centum,
less than fifteen per centum, of the total selling price of such issue of
securities, and such other information as may have been previously
prescribed by the commission. But, if such dealer shall give to the
State corporation commission prior to such sale, or offering, or adver-
tisement, notice of the intention to register a security, such dealer shall
have two days from the time of giving such preliminary notice to file
a complete notification, which preliminary notice may be given by tele-
gram; and pending such two days such dealer may proceed with sales
of such securities as if the registration had heen completed, and if
such registration shall be completed within said two days it shall relate
back to the time of giving such preliminary notice.

This exemption is subject to the qualifications and provisos, that if
the selling commission, direct or indirect, to such licensed regular dealer
and/or so far as known to the dealer, to any other person or persons
whatsoever, in any form whatsoever, be over seven and one-half per
centum, and/or if the total overhead of organization, promotion, flota-
tion and/or selling expenses, including commissions, be over fifteen per
centum, of the selling price to the public, and such fact be known to the
dealer or if the dealer has notice of any facts which would put a reason-
ably prudent man on notice that such might be the fact, such fact or
facts shall be fairly and fully disclosed to the public, to all prospects,
and to all subscribers and purchasers, and if these qualifications and
provisos be not complied with any sale so made shall be voidable and
any Offer, sale, advertisement and/or participation shall be a misde-
meanor to the same extent, in the same manner and in the same cases
as otherwise provided in this act, notwithstanding this exemption. This
exemption is further subject to the qualification and proviso that it
shall not apply in any case in which the total overhead of organization,
promotion, flotation and/or selling expenses, including commission,
direct or indirect, and/or in any form whatsoever and/or to any person
or persons, corporation or corporations whatsoever, is in excess of
twenty per centum of the selling price to the public.

It is the contemplation of the foregoing and other similar provisions
that that percentage of the amount paid by the subscriber or purchaser
which represents the difference between the maxinmim permitted over-
head and/or commission and one hundred shall go to the treasury of
the enterprise or project for the legitimate purposes thereof and to
serve as a fund and source for earning the hoped for return upon the
investment.

Nothing herein shall be construed, however, to exempt from qualli-
fication subdivisions of land lying outside of Virginia when the pro-
visions of this act are otherwise applicable thereto.

In order for such regular dealer to be entitled to offer for sale and
advertise for sale and sell securities. otherwise subject to regular quali-
fication under this act, in regular established place or places of business
and/or through regularly employed and duly licensed salesmen and
solicitors outside of such place or places of business, such dealer must
be a regular dealer in securities and must have been in business in this
State and have had a regular place of business in this State for a
period of one year prior to the date of his application for license as a
licensed dealer under this act, and must, in addition to other require-
ments applicable, obtain from the State corporation commussion a
dealer’s license, and each salesman or solicitor who offers, sells, or
participates in the sale of securities outside of such regular place or
places of business must obtain a salesman’s or solicitor’s license. Before
the State corporation commission shall be authorized or empowered
to issue such dealer’s license in order to entitle the holder thereof to
the benefit of this exemption it shall be furnished, in such manner as
may be required and upon such forms as may be prescribed, satisfactory
evidence of the facts constituting the basis of the claim for exemption
and of the good character, standing, reputation and integrity, of the
individuals composing the officers and directorate of the corporation.
and of the corporation, if the dealer be a corporation, and of the mem-
bers of the partnership if it be a partnership, and of the individual if it
be an individual, and of the dealer’s reasonable financial responsibilty.
No salesman’s or solicitor’s license shall be issued by the State cor-
poration commission to any regular employee of any such dealer entitling
such employee to offer, sell, or participate in the sale of securities out-
side of the regular place or places of business of such dealer unless and
until satisfactory evidence of the good character of such regular
employee shall first have been furnished in such manner and upon such
forms as may be prescribed.

Every licensed dealer shall pay an annual license fee of twentv-
five dollars ($25.00) ; every salesman or solicitor of such dealer author-
ized to sell securities under the provisions of this subsection (m) shall
pay an annual license fee of ten dollars; subject to apportionment as
herein provided in the case of salesmen’s licenses under subsection (h)
of section five; and such dealer shall pay a registration fee of one
dollar for each registration of securities under the provisions of this
subsection. All such licenses shall be for the year beginning May first
and ending Apnil thirtieth next following; shall be paid to the clerk
of the State corporation commission, and no license shall be issued
hereunder or registration of a security be valid until the requisite fee
has been paid.

The license herein provided for and the license fees herein provided
to be paid shall be in addition to any other license or license fees required
under any other statute.

Upon application for dealer’s license there shall be paid a fee of
twenty-five dollars, in addition to any costs or expenses incident to
investigation, but such application fee shall serve as payment of license
for the portion of the year intervening between the granting of such
license and the first day of May following, in case dealer’s license is
granted in pursuance of the application, but in case the license is for
any reason not granted the application fee of twenty-five dollars shall
not be returnable.

The commission shall have jurisdiction, upon formal or informal
application and the payment of the filing fee of twenty-five dollars, and
subject to payment by applicant of any necessary expenses of investi-
gation, to determine whether 1 registration by notification is necessary,
and if it be found not necessary, to issue an order, in the nature of a
certificate, to such effect, and such order shall be conclusive in the same
manner and to the same extent as in the case of orders in the nature of
certificates of exemption, as elsewhere provided in this act.

The commission shall have jurisdiction in any case, after due
notice, hearing and consideration, to revoke any regular dealer’s license
and/or salesman’s or solicitor’s license issued hereunder upon finding
that such licensee has been guilty of any fraudulent conduct or is
otherwise of such moral or financial status as to constitute such dealer,
salesman, or solicitor, unworthy to hold a license under the provisions
of this law, or that the practices of such licensee are such that the
measure of protection to the public contemplated by this law has not
as a fact been given or is no jonger given.

(n) By the owner of any security, or land, not being the under-
writer of such security, nor the purchaser of such securities or land
in wholesale quantity for purpose of distribution thereof to the public,
who is not the maker or issuer of’ such security, nor the promoter of
such land, who shall have acquired and shall sell the same for his own
account in the usual and ordinary course of business and not for the
direct or indirect promotion of any enterprise or scheme within the
purview of this act, providing that such ownership and sale are in
good faith. Repeated or successive sales of any such security or
securities or land shall be prima facie evidence that the claims of
ownership and sale in ordinary course are not bona fide, but mere
shifts or devices to evade the provisions of this act.

(o) The sale, transfer, or delivery to any bank, banker, trust com-
pany or dealer in securities.
(p) The sale, transfer, or delivery to those persons named in the
charter as directors, officers or incorporators, provided there be not
such sale, et cetera, to a total of more than ten such directors, officers
and/or incorporators, or to not more than twenty-five persons, inclusive
of the directors, officers, and incorporators, the names of which persons
as prospective purchasers have been filed with the State corporation
commission.

(q) The distribution, by a corporation actively engaged in the busi-
ness authorized by its charter, of capital stock, bonds or other securi-
ties to its stockholders or security holders as a stock dividend or other
distribution out of earnings or surplus; or the issue of securities to
the security holders or other creditors of a corporation in the process
of a bona fide reorganization of such corporation made in good taith
and not for the purpose of avoiding the provisions of this act, either
in exchange for the securities of such security holders or claims of
such creditors or partly for cash and partly in exchange for the secun-
ties or claims of such security holders or creditors.

Section 5. Before any securities, designated in section three of
this act. which are not excepted or exempted from its operation, or land
lying outside of the State, subject to its provisions and not excepted or
exempted thereby, can be lawfully sold, offered for sale, advertised, or
otherwise promoted in the State of Virginia, it shall be necessary on
and after the day on which this act shall take effect that the issuer
and/or owner and/or promotor and/or agent shall first have obtained
from the State corporation commission, hereafter called the commuis-
sion, a permit, authorization, and/or license, as the case may be, and
no such permit, authorization, and/or license shall be granted until
the provisions and requirements of this act shall have been otherwise
complied with and until there first shall have been filed with the com-
mission an application for permit or authorization and/or license. upon
such forms as may be prescribed or permitted by the commission, by
the owner, issuer, promoter and/or agent, duly executed and sworn
to, and there shall be furnished and filed with such application, to the
satisfaction of the commission in its exercise of a sound discretion,
the following data and information, so far as applicable to the particular
case:
(a) A copy of the securities so to be promoted and, when appli-
cable, a plat of the lands to be sold.

(b) A statement in substantial detail of the assets and liabilities
of the person or company making and issuing such securities and ot
any person or company guaranteeing the same, including specifically
the total amount of such securities and of any securities prior thereto
in interest or lien, authorized or issued by any such person or company.

(c) If such securities are secured by mortgage or other lien, a
copy of such mortgage or of the instrument creating such lien, and a
competent appraisal or valuation of the property covered thereby, with
a specific statement of all prior liens thereon, if any.

(d) Any abstract and a certificate of title may be required in any
case in which the commission deems it necessary, and if the securities
to be sold are lands, or an interest in lands, an abstract of title thereto
and the certificate of a competent attorney at law as to the title to such
lands shall be filed unless the commission shall for good cause shown
dispense with it.

(e) A full statement of facts showing the gross and net earnings,
if any, of any person or company making, issuing or guaranteeing such
securities, or of any property covered by any such mortgage or lien.

(f) All material facts in the possession of such promoter relative
to the character or value of such securities or of the property or
earning power of the person or company making, issuing or guarantee-
ing the same.

(g) A copy of any prospectus or advertising matter which is to be
used in connection with such promotion, and no such prospectus or
advertising matter shall be used, unless the same has been filed here-
under, but same may be amended from time to time, by filing copies
of the amendments with the commission.

(h) The names, addresses and selling territory in this State of any
agents by or through whom any such securities are to be sold, and no
such agents shall be employed unless such statement with respect to
them, together with satisfactory evidence of their good character, has
been filed hereunder and there shall have been paid to the commission
a license fee of ten dollars for each such agent; provided, however, that
if such agent’s license shall be granted on or after March first of any
year, the fee for such license shall be the sum of five dollars.

(1) The name and address of such promoter, including the names
and addresses of all partners, if the promoter be a partnership, and the
names and addresses of the officers and directors or trustees, if the
promoter be a corporation or association.

(j) A statement showing in detail the plan on which the business
enterprise is to be conducted.

(k) The articles of co-partnership or association and all other
papers pertaining to its organization, if the securities be issued or guar-
anteed by a co-partnership or unincorporated association.

(1) A copy of its charter and by-laws, if the securities be issued or
guaranteed by a corporation; provided, however, that if the corpora-
tion has not been chartered, a copy of the proposed charter and pro-
posed by-laws shall be filed.

(m) A copy of the contract to be used in taking subscriptions for
such securities wherein shall be set out a complete and accurate state-
ment, without unnecessary verbiage, of any stock or security of the
corporation whose securities are being offered for sale, which has been
or is proposed to be issued for any consideration, other than par value
Or more in money.

It shall be unlawful for any person or corporation to engage in
selling, offering to sell or contracting to sell any security such as desig-
nated in section three of this act or any land lying outside of this State
and embraced in the provisions of this act, except by printed contract,
the form of which shall be approved by the commission and in which
shall be plainly set out in type not smaller than ten point, in some color
other than red, without unnecessary verbiage, the exact amount ot!
money, fees, commissions, stock or securities which any person has
received or is to receive by reason of the promotion or sale of such
securities or land or which has been or is to be given or paid for any
property, patents, options, formulae, copyrights, leases or promotion
or intangible assets either directly or indirectly, by any shift or device
whatsoever, and it shall be unlawful for any corporate officer or other
person in any capacity whatsoever to pay or issue or cause to be issued
or paid for any such consideration, or as a bonus any money, stock or
securities except as set forth in such subscription contract, unless anv
changed plan together with a properly changed form of contract shail
have first been approved by the commission and such change shall be
agreed to in a regularly called stockholders’ meeting or in the event
the promoter be not a corporation, then same must be agreed to by
those persons or their assignees, who have purchased at par or more
the majority of such securities. In every such contract as provided
for in this section the following shall be stated in twelve point bo:d
face type in red: “The value of the stock or securities or land referred
to in this contract has not been passed upon by the State corporation
commission.”

(n) If the securities are lands or interests in land, a statement as
to the fixed price or the maximum and minimum prices at which such
lands or interests in land are to be offered or sold.

(o) A full statement of the exact amount which is being paid, or is
proposed or promised or contracted to be paid, directly or indirectly
in money, securities or otherwise, for the promotion of such corporation
and/or the flotation of such securities, either directly or indirectly. to
any person whatsoever.

(p) Any other information concerning the said promotion, its
assets or the persons interested therein, which the commission mav
require.

(q) A filing fee of twenty-five dollars.

(r) In any case the commission shall have the right to require 0%
any promoter either before granting a permit or after granting a permit
for the sale of securities, or land, a bond, the form whereof shall be
prescribed and the surety approved by the commission, penalty whereof
shall be fixed by the commission at not more than twenty per centur:
of the sales price of the securities or land proposed or authorized to
be sold. The said bond shall be with surety and payable to the Com-
monwealth, conditioned that the facts set forth in the application for
such permit and in all other documents required by this act to be fied
with the commission are true, and that the provisions of this act sha‘:
be strictly complied with, and that all moneys from the sale of such
securities or land will be used for the proper purpose or purposes as
set forth in the subscription contract and/or in the security sold and
in the papers filed with the commission; and that the contract of the
promoter as set forth in subscription and/or in the securities issued
will be complied with. Except when the surety offered is a surety
company authorized to do business in this State, it shall be the duty
of the commission to satisfy itself that such surety is amply solvent
before accepting the same; provided that the commission may, in its
discretion, permit some other form or method of giving the security
contemplated by this provision in lieu of requiring a bond as provided.

When the application shall have been approved by the commission,
the applicant shall before receiving a permit to sell securities or land
required to be qualified under this act in the State, pay a license fee,
which license fee shall be computed at the rate of one-eighth of one
per centum upon the par value of all securities, or maximum selling
price of land, permitted to be sold in the State, provided, however, that
if the security has no par value, such fee shall be based on the selling
price of the security. The maximum fee to be charged or collected
hereunder shall not exceed five hundred dollars. The amount of the
filing fee hereinbefore provided for shall be deducted from the amount
of license fee so ascertained. The filing fee shall not be returnable,
regardless of whether or not a permit or authorization issues and
regardless of the withdrawal of application, nor in cases in which the
only action of the commission is to issue or refuse to issue a certificate
of exemption or order to the effect that no qualification or registration
by notification is necessary as provided for in this act, nor shall any
fee be returnable after authorization or license issues or notification
has been filed.

Section 6. The State corporation commission shall have jurisdiction
at the instance of any interested party, upon affidavit by such party
duly sworn to as a statement of facts and not upon information and
belief, or of its own motion, and upon such facts established in such
manner, as required in a court of equity, for purposes of an injunction,
after five days’ notice to the party defendant and an opportunity to
be heard, said notice to be accompanied by a statement of the facts and
charges upon which action is proposed, to issue a cease and desist
order in the nature of a temporary injunction and restraining order in
the matter of and against any person, firm or corporation, which it
appears from the facts is offering for sale, advertising for sale, or
otherwise promoting or assisting, participating in or acting in further-
ance of the offering, advertising, selling, or otherwise promoting any
securities or land which should be qualified and which are not. and/or
in any case in which it appears that a fraud, legal or equitable, inten-
tional or unintentional, is being perpetrated and/or attempted in con-
nection with the disposition or attempted disposition of securities, or out
of State land, to the public, whether the provisions of this act as to
qualification or notification apply or not, and even though one or more
of the exemptions or exceptions under this act should be applicable,
and even though qualification or registration by notification under the
provisions of this act has been effected, enjoining and restraining such
person, firm or corporation from further offering, advertising, selling,
or promoting, assisting or participating in or acting in furtherance ot
such offer, advertisement, or sale, and if said cease and desist order 1s
issued it shall thereafter proceed as soon as may be after due notice
and after a full hearing on the merits to consider and determine
whether or not such cease and desist, or restraining order, and injunc-
tion shall be dismissed or made permanent, and its action, subject to
right of appeal, shall be conclusive in any court in the State in any
matter, civil or criminal. The proceeding shall be analogous to and
in accordance with proceedings in equity for injunctions, except as
otherwise specifically provided, and the commission in this connection
shall have power and authority to require a bond with surety in ac-
cordance with the principles applicable in the courts of equity of this
State, and it shall have power and authority to exercise a sound.
judicial! and equitable discretion in the administration of these and all
other provisions of this act with a view to the accomplishment of that
measure of protection to the public contemplated by this act with as
little interference with legitimate business as is consistent with the
accomplishment of the objects of this legislation.

Any order that may be entered as the basis of the instigation of a
proceeding under this section and the issuing of the five days’ notice
above provided may be kept on a secret docket and not made public
until after the hearing following such five days’ notice and publicity
avoided as far as possible until such hearing after said five days’ notice.

Section 7. The commission, its assistants or agents, shall at anv
time, have the authority and jurisdiction to investigate the affairs and
audit the books and accounts of any enterprise, the securities, or out of
the State land, of which, are required to be qualified under this act,
are being sold, advertised or offered for sale or are proposed to be
sold or offered for sale in this State, so far as may be necessary to ascer-
tain whether or not the facts would justify any or all of the findings
enumerated in section twelve, and to ascertain whether or not a perm:t
shall be granted, or whether any permit which may have been granted,
either heretofore or hereafter, in accordance with this act, shall be
continued, suspended or revoked, and/or whether or not a certificate
of exemption should be issued, and after giving the promoters a hear-
ing, may, if the evidence warrant, refuse, grant, or revoke said permtt,
or refuse or grant said certificate of exemption, and may make such
order as to the costs, including compensation not exceeding twenty
dollars per day for the time employed in making such examination
or audit, and actual hotel, traveling and other expenses of the person
Or persons making the investigation, as may appear to be just. and it
upon such investigation such permit shall be revoked or suspended,
and in any case in which a permit shall be revoked or suspended,
whether by adverse order or by order by consent, it shall thereafter be
unlawful for any promoter to sell, offer for sale, or by means of anv
advertisement, circular or prospectus, or by any other form of public
or private offering to attempt to promote the sale of the securities
or land of such enterprise in this State, until such order be set aside
as herein provided. The provisions of the section shall apply as well
to those securities and land which are now being sold as to those
which may be permitted to be sold in the future.

Section 8. The commission, its assistants or agents, shall have the
power to issue subpoenas and process compelling the attendance of any
person and the production of any papers or books for the purposes of
such investigation and examination as is provided for in this act, and
shall have power to administer an oath to any person whose testi-
mony may be required on such examination or investigation; and it
shall be unlawful for any person to refuse to obey any such subpoena
or make answer to any competent and material questions propounded
to him by the commission, its assistant or agent. No person shall
refuse to testify because his testimony would tend to incriminate him-
self, but if called to testify by the commission or the Commonwealth,
he shall not thereafter be prosecuted for any crime growing out of the
transaction concerning which he testifies. Upon the conclusion of
any investigation, the commission may make findings of facts touch-
ing the matter or matters under investigation, and such findings shall
be prima facie evidence of the truth of the matters therein found by
the commission in any action, either civil or criminal, instituted under
any of the laws or statutes of this State against the person, persons,
partnership, corporation or association selling or offering for sale
such securities, or such land, or their agents or representatives. The
notices provided for in this act may be given by registered letter mailed
to the last-known address of person or persons or corporation to be
investigated and the commission’s certificate shall be sufficient evidence
of such notice and the mailing thereof.

Section 9. Every foreign promoter, before being granted a permit
to sell or offer for sale, in this State, any securities or land such as
are designated in section three of this act, shall also file in duplicate
with the commission his or its written consent, irrevocable, that action
or suit may be commenced against him or it in the proper courts of
any county or city in this State in which a cause of action may arise,
by the service of process on the secretary of the Commonwealth and
stipulating and agreeing that such service of process on the secretary
of the Commonwealth shall be taken and held in all courts, to be as
valid and binding as if due service had been made upon himself in person
or the company itself, according to the laws of this or any other State,
and such instrument shall be authenticated by the seal of said foreign
corporation, and shall be accompanied by a duly certified copy of the
order or resolution of the board of directors, trustees, or managers
of the corporation authorizing the said secretary and president to
execute the same; it shall be the duty of the commission to file one
copy of such consent with the secretary of the Commonwealth. When
lawful process against any such promoter shall be served upon the
secretary of the Commonwealth, he shall forthwith mail a copy of such
process to the defendant or defendants therein named, at such address
as may have been filed with the commission by such defendant. A
judgment, decree or order of any court entered or made against any
such person, firm or corporation after service of process or notice as
aforesaid shall be valid and binding on such defendant, in case of a
corporation, as if it had been incorporated under the laws of this
State and served with process or notice therein, and in the case of
members of a firm or individuals, as if they had been personally served
with process or notice therein. But foreign unincorporated associa-
tions shall not be permitted to sell such securities or such land, in this
State, until the commission shall be satisfied that the officers executing
such consent have power under the laws of this State to bind the
members of such association.

Section 10. The commission shall determine what part, if anv, of
the securities which any person, firm or corporation, subject to the
provisions of this act, proposes to offer or are offering are promotion
securities and may make such order as may seem just and proper to
prevent the sale of such promotion securities in competition with treas-
ury securities, in such way as to defraud the public, as may seem proper
and just to that end, and for that purpose may require that securities
issued for other consideration than money, at the same price that like
securities are sold to the public, be placed in escrow upon such con-
ditions as the commission may direct, to remain in escrow until all
treasury stock has been sold or the authority to sell same surrendered,
unless for cause shown, same or any part thereof shall be sooner
released ; and the commission shall have authority to require and /or to
accept some other agreement or arrangement, in lieu of a trust or
escrow, which will accomplish the substantial objects of this and other
similar provisions of the law, in the exercise of its sound discretion.

Section 11. It shall be unlawful for any person, or persons, associa-
tion, co-partnership or corporation to receive or pay either directly or
indirectly, under any guise, device, or pretext whatsoever, as promo-
tion fee and/or as compensation for the organization of any corpora-
tion and/or of any enterprise or project, including attorney fees, but
not charter fees, registration and recordation fees in case of a cor-
poration, and/or for expenses of flotation and sale, including com-
missions, of any security whatsoever,- more than twenty per centum
of the value of the security promoted, floated and sold, unless in the
judgment of the commission it should be proper to allow a larger per
centum, which in no case shall exceed thirty per centum; this is to
cover the total promotion, organization and/or flotation fees and
expense either paid to one or more persons, firms or corporations,
whether paid in money, stock or other things whatsoever, and the com-
mission shall have power and authority, as a condition precedent to
the issuance of a permit or authorization, to require, when in its
judgment it is feasible and proper so to do, that the proposed overhead
of organization, promotion, flotation and/or selling expenses be reduced,
but not below ten per centum, even though the proposed percentage
be not over twenty per centum of the selling price.

Except that in the case of the organization of banks, trust companies,
banking companies, or building and loan companies, the total cost for
organization and sale of securities shall not exceed seven and one-half
(714) per centum of the price at which the securities of such institu-
tion are sold, and nothing herein is to be construed as permitting such
expenses to be paid out of the capital stock of such institutions.

Section 12. If from the application for a permit to sell or offer for
sale in this State any securities or land, such as are designated in sec-
tion three of this act, and from other statements, papers and documents
on file, or from other evidence submitted or from the investigations of
the commission, it shall appear, and the commission shall find (a) that
the makers or guarantors of said securities are insolvent, or are un-
trustworthy; (b) or that the promoters’ plan of business is dishonest,
or fraudulent; (c) or that the promoters’ plan of business does not
adequately secure investors against the unlawful dissipation or mis-
application of the funds of the enterprise, or business; (d) or that
the promoters’ literature or advertising is misleading and calculated to
deceive purchasers or investors; (e) or that the enterprise or business
of the promoter is unlawful or against public policy; (f) or is a mere
scheme of a promoter or promoters to get money or property at the
expense of the purchasers of the aforesaid securities or land; fg) or
that the enterprise or business of the promoter is not based upon sound
business principles; (h) or that the title to any material part of the
assets of the issuer of the securties, or of the seller of the land, 1s
defective; (i) or if the applicant and/or promoter, and/or other re-
sponsible person or corporation fail to furnish the data and/or informa-
tion required by law or by valid orders or directions of the commission,
or otherwise fail to comply with any requirement of the law or with
anv valid requirement of the commission, the said commission may
refuse such permit. Notice of such refusal shall immediately be given
to the applicant by registered mail.

Section 13. Appeals may be taken, by any person or corporation
affected and on behalf of the Commonwealth, from any decision, action,
or order of the commission, to the supreme court of appeals of
Virginia. The granting of such appeal, however, unless so ordered
by the court shall not operate as a stay of proceedings. The commis-
sion may enter such suspension order for the period of pendency of
appeal, or other time, with such conditions, penalty and surety, when
and as may be deemed reasonably necessary for the protection of the
public, in analogy to similar requirements in the courts of this Common-
wealth, and subject to modification in any particular in any super-
sedeas which may be issued by the supreme court of appeals.

Section 14. Any person who shall be induced to purchase any securi-
ties or land, such as are designated in section three of this act, by any
promoter, by reason of any misrepresentation of any material fact con-
cerning such securities or land, coniained in said application or other
documents submitted in connection therewith or furnished to the
commission, upon its request, or in any other written or printed matter
issued or used by said promoter or its or his agents in making such
sale. or shall have suffered loss by reason of the fact that moneys paid
by him to the promoter of such securities or land or to the promoter’s
agent, have not been applied to the proper purpose of the promoter as
set forth in the subscription contract, the security sold, or the papers
filed with the commission, or that the promoter has failed or refused
to comply with his contract as set forth in the subscription contract
and/or in the certificate or other evidence of the security issued or land
sold, shall have the right to bring action upon the bond provided for
by this act or under any substitute agreement approved by the com-
mission in pursuance of provisions of this act, and such bond or duly
approved substitute therefor shall be security for such person for his
losses; but such person shall not be entitled to recover more than the
money paid, or the actual value of the property given, or the labor
performed, in exchange for such securities or land, with legal interest
from the date of the payment or the performance of the services or the
transfer of the property. One or more recoveries shall not vitiate the
bond or substitute therefor, but same shall remain in full force and
effect, but no recoveries shall ever exceed the full amount of such
bond or substitute therefor and upon actions being commenced in
excess of the amount of same, the commission may require a new
bond, or substitute therefor, and if the same is not given or effected
within thirty days, the commission may revoke the permit herein pro-
vided for, provided, however, that any suit or action instituted under
this section shall be commenced within two years from the date of
any such sale by such promoter or its or his agents.

Section 15. Any issuer, promoter, dealer, broker, agent, advertiser.
or other person, as principal or otherwise, who shall commit, in whole
or in part, in this State any act declared unlawful by this act or who
shall fraudulently evade or attempt to evade the provisions thereof,
shall be deemed guilty of a misdemeanor where not otherwise provided,
and on conviction, be punished by a fine of not less than twenty-five
nor more than five thousand dollars, or by confinement in jail for not
less than thirty days or more than one year, or by both such fine and
imprisonment. Indictments or presentments charging violation of this
act shall not be certified to a justice of the peace for trial, but the
jurisdiction for trial shall be in the courts of record having jurisdiction
of felonies. The court before whom such fine is imposed shall order
one-half of such fine to be paid to the person or persons instigating the
prosecution in which such fine was imposed.

Every sale or contract made in violation of any of the provisions of
this act shall be voidable at the election of the purchaser, and the person
making such sale or contract for sale, and every agent of or for such
seller who shall have participated or aided in any way in making such
sale, shall be jointly and severally liable to such purchaser, upon
tender to the seller or in court of the securities sold or of the contract
made, for the full amount paid by such purchaser, together with all
taxable court costs and reasonable attorney fee in any action brought
under this section, or any action or suit in which the question of the
validity of the sale or contract is cognizable, and the right to such
avoidance shall be barred by the lapse of two years from the date of
sale of the security or land, except where there has been an actual
concealment of the facts constituting a violation of this act.

The limitation of any prosecution for a violation of any act declared
by this chapter to be a misdemeanor shall hereafter be two years from
date of violation.

Section 16. Any person who shall knowingly or wilfully subscribe
to, or make or cause to be made any false statements or false entry in
any book of account or other paper of any person, co-partnership, as-
sociation or corporation subject to the provisions of this act, or exhibit
any false paper, with intention of deceiving any person authorized to
examine into the affairs of such person, co-partnership, association or
corporation, or shall knowingly make any false statement materially
affecting the value of the stocks, bonds, or other securities or land,
offered for sale by any such person, co-partnership, association or
corporation, shall be deemed guilty of a felony and upon conviction
thereof, shall be fined not less than one hundred dollars nor more than
five thousand dollars, or shall be imprisoned not less than six months
or more than one year in jail, or not less than one year nor more than
ten years in the State penitentiary, or by both such fine and 1m-
prisonment, in the discretion of the jury or the court trying the case
without a jury.

Section 17. In the event of the failure of any promoter, or of any
other responsible person or corporation subject to any of the provisions
of this act, to comply with any order which the commission is authorized
by this act to make, then it shall be unlawful for such security or such
land to be sold until such order is complied with or set aside, as herein
provided, and the commission shall have power to impose a fine not
exceeding five hundred dollars, for failure or refusal of any person
or corporation to comply with any order which the commission may
have made, under authority of this act. such fine to be collected by its
process, as provided by law.

Section 18. All fees herein provided for shall be collected by the
commission and shall be turned into the general fund of the State
treasury. The commission shall also have full power to employ such
temporary assistants or clerks as it may from time to time deem neces-
sary and fix their compensation, and all salaries and expenses neces-
sarily incurred in the administration of this act shall be paid out of
any funds appropriated for the purpose, and the commission shall have
authority, in cases not otherwise provided for, and in addition to the
specific fees provided for, to enter orders for costs according to
what appears to be just and equitable under the circumstances, provided,
however, that all additional costs so collected shall also be paid promptly
into the general fund of the State treasury.

Section 19. This act shall not be construed to prevent the sale of
any particular kinds or classes of securities or land, but to give the com-
mission power to regulate the sale of securities and land, such as are
designated in section three of this act, to require that promoters of
such securities and land as defined in this act and as designated therein,
make proper disclosure of material facts to and for the benefit of the
public, to require that the promoters of such securities shall honestly
apply the proceeds of the sale thereof to the purposes for which such
securities are sold, and that the provisions of this and other applicable
laws are complied with according to the true intent and purpose
thereof.

Section 20. This act is hereby declared to be remedial, except when
clearly criminal or penal, and, subject to any applicable constitutional
limitations, shall be liberally construed to effect its manifest objects and
purposes, and in any proceeding, hearing or consideration in the adnunis-
tration, application and enforcement of this act, and/or of any of its
provisions, it shall be presumed that any security, enterprise or project,
as severally and together defined in this act, is or are within the pro-
visions of the act designating certain kinds of securities, and land
under certain circumstances, as necessary to be qualified before heing
advertised for sale, offered for sale and/or sold in Virginia, and the
burden shall be upon the person and/or corporation desiring to so
advertise, offer and/or sell, or to participate in the advertisement, offer
or sale, of, or so having advertised, offered and/or sold, or participated
in the advertisement, offer or sale of, such securities andor land. to
establish the existence of an exemption and/or of the non-applicahility
of the provisions of this act requiring qualification and/or other steps
thereunder. The foregoing are hereby declared to be rules ot construc-
tion, evidence, procedure and practice applicable to the administration
and enforcement of this act and of all of its provisions—admunistrative,
injunctive, and civil.

Section 21. If any section, paragraph, sentence, clause or phrase
of this act shall be for any reason held to be unconstitutional, such
decision shall not affect the validity of the remaining portion of this
act; and it is hereby declared that the general assembly would have
passed this act, and each section, paragraph, sentence, clause and phrase
hereof, irrespective of the fact that any one or more other sections,
paragraphs, sentences, clauses and phrases hereof be declared for
any reason unconstitutional.