§ 73-103 — Definitions
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(a)Generally. — When used in this chapter or any rule or order hereunder, unless the context otherwise requires:
(1) “Agent” means any individual, other than a broker-dealer, who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities. “Agent” does not include an individual who represents:
a. An issuer in:
1. Effecting transactions in a security exempted by § 73-207(a)(1), (2), (3), (10), or (11) of this title;
2. Effecting transactions exempted by § 73-207(b) of this title;
3. Effecting transactions in a covered security as described in §§ 18(b)(3) and 18(b)(4)(E) (or as the same may be renumbered by a future act of the United States Congress) of the Securities Act of 1933 [15 U.S.C. § 77r]; or
4. Effecting transactions with existing employees, 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;
b. A broker-dealer in effecting transactions in this State limited to those transactions described in § 15(h)(2) of the Securities Exchange Act of 1934 [ 15 U.S.C. § 78o]; or
c. An issuer or a member of a bona fide agricultural cooperative whose securities are exempt from registration under § 73-207(a)(12) of this title.
A partner, officer or director of a broker-dealer or issuer, or a person occupying a similar status or performing similar functions, is an agent only if such person otherwise comes within this definition.
(2) “Attorney General” means the Attorney General of the State or the Attorney General’s duly appointed deputy.
(3) “Broker-dealer” means any person engaged in the business of effecting transactions in securities for the account of others or for the broker-dealer’s own account. “Broker-dealer” does not include:
a. An agent;
b. An issuer;
c. A bank, savings institution or trust company, to the extent that these entities are exempt or excluded from broker-dealer registration requirements under federal securities law;
d. A person who has no place of business in this State and effects transactions in this State exclusively with or through (i) the issuers of the securities involved in the transactions, (ii) other broker-dealers, or (iii) banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940 [15 U.S.C. § 80a-1 et seq.], pension or profit-sharing trust, or other financial institutions or institutional buyers, whether acting for themselves or as trustees;
e. An issuer or an individual who represents an issuer or a member of such issuer provided said issuer is exempt from registration under § 73-207(a)(12) of this title.
(4) “Director” means the Investor Protection Director, the principal executive officer of the Investor Protection Unit designated in § 73-102 of this title.
(5) “Eligible adult” means:
a. An “elderly person” as defined in § 222 of Title 11; or
b. A “vulnerable adult” as defined in § 1105 of Title 11.
(6) “Federal covered adviser” means a person who is registered under § 203 of the Investment Advisers Act of 1940 [15 U.S.C. § 80b-3].
(7) “Federal covered security” means any security that is a covered security under § 18(b) of the Securities Act of 1933 [15 U.S.C. § 77r(b)] or rules or regulations promulgated thereunder.
(8) “Financial exploitation” means the illegal or improper use, control over, or withholding of the property, income, resources, or trust funds of the eligible adult by any person or entity for any person’s or entity’s profit or advantage other than for the eligible adult’s profit or advantage. “Financial exploitation” includes, but is not limited to:
a. The use of deception, intimidation, or undue influence by a person or entity in a position of trust and confidence with an eligible adult to obtain or use the property, income, resources, or trust funds of the eligible adult for the benefit of a person or entity other than the eligible adult;
b. The breach of a fiduciary duty, including but not limited to, the misuse of a power of attorney, trust, or a guardianship appointment, that results in the unauthorized appropriation, sale, or transfer of the property, income, resources, or trust funds of the eligible adult for the benefit of a person or entity other than the eligible adult; and
c. Obtaining or using an eligible adult’s property, income, resources, or trust funds without lawful authority, by a person or entity who knows or clearly should know that the eligible adult lacks the capacity to consent to the release or use of the eligible adult’s property, income, resources or trust funds.
(9) “Fraud,” “deceit,” and “defraud” are not limited to common-law deceit.
(10) “Investment adviser” means any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities. “Investment adviser” also includes financial planners and other persons who, as an integral component of other financially related services, provide the foregoing investment advisory services to others for compensation and as part of a business or who hold themselves out as providing the foregoing investment advisory services to others for compensation. “Investment adviser” does not include (A) an investment adviser representative; (B) a bank, savings institution or trust company; (C) a lawyer, accountant, engineer or teacher whose performance of these services is solely incidental to the practice of such person’s profession; (D) a broker-dealer or its agent whose performance of these services is solely incidental to the conduct of its business as a broker-dealer and who receives no special compensation for them; (E) a publisher of any bona fide newspaper, news column, newsletter, news magazine or business or financial publication or service, whether communicated in hard copy form or by electronic means, or otherwise, that does not consist of the rendering of advice on the basis of the specific investment situation of each client; (F) any person who is a federal covered adviser; or (G) such other persons not within the intent of this subsection as the Director may by rule or order designate.
(11) “Investment adviser representative” means any partner, officer, director (or a person occupying a similar status or performing similar functions) or other individual, except clerical or ministerial personnel, who is employed by or associated with an investment adviser that is registered or required to be registered under this chapter, or who has a place of business located in this State and is employed by or associated with a federal covered adviser; and who does any of following: (A) makes any recommendations or otherwise renders advice regarding securities, (B) manages accounts or portfolios of clients, (C) determines which recommendation or advice regarding securities should be given, (D) solicits, offers or negotiates for the sale of or sells investment advisory services, or (E) supervises employees who perform any of the foregoing.
(12) “Investment Company Act of 1940” means the federal statute of that name, 15 U.S.C. § 80a-1 et seq.
(13) “Issuer” means any person who issues or proposes to issue any security.
(14) “Nonissuer” means not directly or indirectly for the benefit of the issuer.
(15) “Person” means an individual, a corporation, a partnership, an association, a joint stock company, a trust where the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, or a political subdivision of a government.
(16) “Promoter” includes:
a. Any person who, acting alone or in conjunction with 1 or more other persons, directly or indirectly takes the initiative in founding and organizing the business or enterprise of an issuer;
b. Any person who, in connection with the founding or organizing of the business or enterprise of an issuer, directly or indirectly receives in consideration of services or property, or both services and property, 10 percent or more of any class of securities of the issuer or 10 percent or more of the proceeds from the sale of any class of securities. However, a person who receives such securities or proceeds either solely as underwriting commissions or solely in consideration of property shall not be deemed a promoter within the meaning of this paragraph if such person does not otherwise take part in founding and organizing the enterprise.
(17) “Public interest” means that it shall appear to the Director that the action taken or sanction imposed will further the purpose of this chapter.
(18) “Public Utility Holding Company Act of 2005” means the federal statute of that name, 42 U.S.C. § 16451 et seq.
(19) “Qualified individual” means any agent, broker-dealer, investment adviser, investment adviser representative or person who serves in a supervisory, compliance, or legal capacity for a broker-dealer or investment adviser.
(20) “Sale” or “sell” includes every contract of sale of, contract to sell or disposition of a security or interest in a security for value.
a. “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.
b. A purported gift of assessable stock is considered to involve an offer and sale.
c. 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.
d. The terms defined in this subsection do not include any bona fide pledge or loan; any stock dividend whether the corporation distributing the dividend is the issuer of the stock or not, if nothing of value is given by stockholders for the dividend other than the surrender of a right to a cash or property dividend when each stockholder may elect to take the dividend in cash or property or in stock; any act incident to a vote by stockholders (or approval pursuant to § 228 of Title 8) pursuant to the certificate of incorporation, or the provisions of Title 8, on a merger, consolidation, reclassification of securities, dissolution, or sale of corporate assets in consideration of the issuance of securities of the same or another corporation; or any 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.
(21) “Securities Act of 1933” means the federal statute of that name, 15 U.S.C. § 77r et seq.
(22) “Securities Exchange Act of 1934” means the federal statute of that name, 15 U.S.C. § 78a et seq.
(23) “Security” means any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; collateral-trust certificate; preorganization certificate or subscription; transferable share; investment contract, including pyramid promotion which includes any plan or operation for the sale or distribution of property, services, or any other thing of value wherein a person for a consideration is offered an opportunity to obtain a benefit which is based in whole or in part on the inducement, by such person or by others, of additional persons to purchase the same or a similar opportunity; voting-trust certificate; certificate of deposit for a security; certificate of interest of participation in an oil, gas or mining title or lease or in payments out of production under such a title or lease; options on commodities; viatical settlement investment; or, in general, any interest or instrument commonly known as a “security,” or any certificate of interest or participation in, temporary or interim certificate, for, receipt for guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. “Security” does not include any insurance or endowment policy or annuity contract under which an insurance company promises to pay money either in a lump sum or periodically for life or some other specified period. In determining whether an instrument is a security, the appropriate analysis is of the economic realities underlying a transaction and not the way the transaction is labeled.
(24) “Viatical settlement investment” means the contractual right to receive any portion of the death benefit or ownership of a life insurance policy or certificate for consideration that is less than the expected death benefit of the life insurance policy or certificate. “Viatical settlement investment” does not include:
a. The assignment, transfer, sale, devise, or bequest of a death benefit, life insurance policy or certificate of insurance by the viator to the viatical settlement provider pursuant to the Delaware Viatical Settlements Act (Chapter 75 of Title 18), the subsequent sale by such life settlement provider of such death benefit, life insurance policy or certificate of insurance, but not fractional interests therein, to any person who is a qualified purchaser (as such term is defined in the Investment Company Act of 1940), or any other lawful assignment, transfer, sale, devise or bequest of a death benefit, life insurance policy or certificate of insurance by an owner of a policy;
b. An assignment of a life insurance policy to a bank, savings bank, savings and loan association, credit union or other licensed lending institution as collateral for a loan, or the foreclosure upon, or relinquishment of, such life insurance policy in connection with such loan;
c. Any transfer of ownership and/or beneficial interest in a life insurance policy from a viatical settlement provider to another viatical settlement provider as defined by the Delaware Viatical Settlements Act (Chapter 75 of Title 18) or to any legal entity formed solely for the purpose of holding ownership and/or beneficial interest in a life insurance policy or policies; or
d. The exercise of accelerated benefits pursuant to the terms of the life insurance policy.
(25) “Wilful” or “wilfully” means only that the underlying act constituting the violation was done deliberately, as opposed to accidentally or involuntarily. Evil motive or intent to violate the law, or knowledge that the law was being violated, is not required.
(b)Principles of definition. —(1) In this chapter when the word “means” is employed in defining a word or term, the definition is limited to the meaning given.
(2) In this chapter when the word “includes” is employed in defining a word or term, the definition is not limited to the meaning given, but in appropriate cases the word or term may be defined in any way not inconsistent with the definition given.
(3) If a word used in this chapter is not defined herein, it has its commonly accepted meaning, and may be defined as appropriate under § 73-102(b) of this title.
(c) In any proceeding under this chapter, the burden of proving an exemption or an exception from a definition is upon the person claiming it.
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