§ 51-19-11 — Fraudulent and prohibited practices

1. It is unlawful for any person knowingly to subscribe to or make or cause to be made
any material false statement or representation in any application, financial statement,
notice, report, or other document filed under any provision of this chapter or to omit to
state any material statement or fact in any such application, financial statement,
notice, report, or document which is necessary in order to make the statements made,
in the light of the circumstances under which they are made, not misleading, or to fail
to notify the commissioner of any material change as required under subsection 6 of
section 51-19-07.
2. It is unlawful for any person in connection with the offer, sale, or purchase of any
franchise, directly or indirectly:
a. To employ any device, scheme, or artifice to defraud;

b. To make any untrue statement of a material fact or to omit to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they are made, not misleading; or
c. To engage in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any person.
3. It is unlawful for any person to violate any order of the commissioner or condition to
the effectiveness of the registration of the offer or sale of franchises.
4. It is unlawful for any person to effect or attempt to effect a sale of a franchise in this
state unless such person is identified in an application or amended application or
prospectus filed with the commissioner.
5. It is unlawful for any person to represent or cause to be represented to any
prospective purchaser of a franchise that the filing of any document under this chapter
or the registration or exemption from registration of a franchise constitutes a finding by
the commissioner that any document filed under this chapter is true, complete, and not
misleading, or that the commissioner has passed in any way upon the merits of any
franchise, or that a franchise is registered or exempted from registration when in fact
such is not the case.
6. No action may be brought under this section by the commissioner after six years from
the date of the alleged violation.