ORS 59.127
Liability in connection with purchase or successful solicitation of purchase of securities

  • recovery by seller
  • limitations on proceeding
  • attorney fees

(1)

A person is liable as provided in subsection (2) of this section to the person selling the security, if the person:

(a)

Purchases or successfully solicits the purchase of a security, other than a federal covered security, in violation of any condition, limitation or restriction imposed upon a registration under the Oregon Securities Law; or

(b)

Purchases or successfully solicits the purchase of a security in violation of ORS 59.135 (Fraud and deceit with respect to securities or securities business) (1) or (3) or by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading (the seller not knowing of the untruth or omission), and if the person does not sustain the burden of proof that the person did not know, and in the exercise of reasonable care could not have known, of the untruth or omission.

(2)

The seller may recover:

(a)

Upon a tender of the consideration paid for the security, the security plus interest from the date of purchase equal to the greater of the rate of interest specified in ORS 82.010 (Legal rate of interest) for judgments for the payment of money, or the rate provided in the security if the security is an interest-bearing obligation;

(b)

Damages in the amount that would be recoverable upon a tender, plus any amount received on the security, less the consideration paid for the security; or

(c)

If the purchaser no longer owns the security, damages equal to the value of the security when the purchaser disposed of it plus interest on such value at the rate of interest specified in ORS 82.010 (Legal rate of interest) for judgments for the payment of money from the date of disposition, less the consideration paid for the security.

(3)

Every person who directly or indirectly controls a purchaser liable under subsection (1) of this section, every partner, limited liability company manager, including a member who is a manager, officer or director of such purchaser, every person occupying a similar status or performing similar functions, and every person who participates or materially aids in the purchase is also liable jointly and severally with and to the same extent as the purchaser, unless the nonpurchaser sustains the burden of proof that the nonpurchaser did not know, and, in the exercise of reasonable care, could not have known, of the existence of facts on which the liability is based. Any person held liable under this section shall be entitled to contribution from those jointly and severally liable with the person.

(4)

Notwithstanding the provisions of subsection (3) of this section, a person whose sole function in connection with the purchase of a security is to provide ministerial functions of escrow, custody or deposit services in accordance with applicable law is liable only if the person participates or materially aids in the purchase and the seller sustains the burden of proof that the person knew of the existence of facts on which liability is based or that the person’s failure to know of the existence of such facts was the result of the person’s recklessness or gross negligence.

(5)

Any tender specified in this section may be made at any time before entry of judgment.

(6)

Except as otherwise provided in this subsection, no action or suit may be commenced under this section more than three years after the purchase. An action under this section for a violation of subsection (1)(b) of this section or ORS 59.135 (Fraud and deceit with respect to securities or securities business) may be commenced within three years after the purchase or two years after the person bringing the action discovered or should have discovered the facts on which the action is based, whichever is later. Failure to commence an action on a timely basis is an affirmative defense.

(7)

Any person having a right of action against a broker-dealer, state investment adviser or against a salesperson or investment adviser representative acting within the course and scope or apparent course and scope of the authority of the salesperson or investment adviser representative, under this section shall have a right of action under the bond or irrevocable letter of credit provided in ORS 59.175 (Procedures for notice filing and licensing).

(8)

Subsection (4) of this section shall not limit the liability of any persons:

(a)

For conduct other than in the circumstances described in subsection (4) of this section; or

(b)

Under any other law, including any other provisions of the Oregon Securities Law.

(9)

Except as provided in subsection (10) of this section, the court may award reasonable attorney fees to the prevailing party in an action under this section.

(10)

The court may not award attorney fees to a prevailing defendant under the provisions of subsection (9) of this section if the action under this section is maintained as a class action pursuant to ORCP 32. [1975 c.300 §2; 1985 c.349 §14a; 1987 c.158 §11; 1987 c.603 §7; 1991 c.762 §2; 1993 c.508 §29; 1995 c.93 §28; 1995 c.696 §10; 1997 c.772 §11; 2003 c.576 §319; 2003 c.631 §2; 2003 c.786 §2]

Source: Section 59.127 — Liability in connection with purchase or successful solicitation of purchase of securities; recovery by seller; limitations on proceeding; attorney fees, https://www.­oregonlegislature.­gov/bills_laws/ors/ors059.­html.

Notes of Decisions

This section will not be applied retroactively to allow a remedy to a seller of securities in absence of any legislative intent to do so. Held v. Product Manufacturing Co., 286 Or 67, 592 P2d 1005 (1979)

For misrepresentation or nondisclosure of facts in proxy statement to be actionable, the misrepresentation or nondisclosure must be material under standard specified by Supreme Court in TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976). Beebe v. Pacific Realty Trust, 578 F Supp 1128 (1984)

Statement by directors expressed as opinion can be basis of action for material untrue or misleading statement of fact. Loewen v. Galligan, 130 Or App 222, 882 P2d 104 (1994)

Law Review Citations

37 WLR 335 (2001)

59.005
Short title 59.015
Definitions for Oregon Securities Law 59.025
Securities exempt from registration 59.035
Transactions exempt from registration 59.045
Authority of director to deny, withdraw or condition exemptions 59.049
Federal covered securities exempt from registration 59.051
Statutory references to federal law 59.055
Conditions of offer and sale of securities 59.065
Registration procedures 59.070
Amended registration application 59.075
Registration by director 59.085
Conditions imposed on registration 59.095
Approval of plan to issue securities in exchange for other securities, claims or property 59.105
Denial, suspension or revocation of registration 59.115
Liability in connection with sale or successful solicitation of sale of securities 59.125
Effect of notice of offer to repay purchaser 59.127
Liability in connection with purchase or successful solicitation of purchase of securities 59.131
Effect of notice of intent to return unlawfully purchased security 59.135
Fraud and deceit with respect to securities or securities business 59.137
Liability in connection with violation of ORS 59.135 59.145
Effect of notice filing, registration or license 59.155
Director is agent for service of process 59.165
Licensing of broker-dealers, investment advisers and salespersons required 59.175
Procedures for notice filing and licensing 59.185
Expiration of license 59.195
Licensees to keep records 59.205
Grounds for denying, suspending, revoking or imposing condition or restriction on license 59.215
Action against applicant or licensee for act or omission of associate 59.225
Cancellation of license or application 59.235
General supervision over persons dealing in securities 59.245
Investigations 59.255
Enjoining violations 59.265
Procedure when assets or capital of broker-dealer or investment adviser found impaired 59.275
Burden of proof 59.285
Rules 59.295
Notice of orders 59.305
Judicial review of orders 59.315
Oaths and subpoenas in proceedings before director 59.325
Certified copies of documents 59.331
Scope of Attorney General powers 59.335
Application of certain sections 59.345
When offer to sell or buy is made in this state 59.350
Treatment of certain transactions 59.355
Corporations subject to other laws 59.365
Common-law and statutory rights not limited 59.370
Limitation on liability for good faith act or omission 59.451
Prohibition against filing false statement by person under investigation or examination 59.480
Definitions for ORS 59.480 to 59.505 59.485
Required reporting by certain securities professionals of suspected financial exploitation 59.490
Notifications to third parties 59.495
Delay of disbursements 59.500
Limitation on liability 59.505
Provision of records to law enforcement and certain state agencies 59.535
Definitions for ORS 59.535 to 59.585 59.540
Registration in beneficiary form 59.545
Registration in beneficiary form 59.550
Origination of registration in beneficiary form 59.555
Form of registration in beneficiary form 59.560
Effect of registration in beneficiary form 59.565
Ownership on death of owner 59.570
Protection of registering entity 59.575
Nontestamentary transfer on death 59.580
Terms, conditions and forms for registration 59.585
Short title 59.710
Definitions for ORS 59.710 to 59.830 59.720
Application of ORS 59.710 to 59.830 to real estate contracts and brokers 59.730
Making contract involving securities without intending a bona fide sale or purchase 59.740
Conducting bucket shop or repeatedly making forbidden contracts 59.750
Receipt or communication of prices for purpose of forbidden contract 59.760
Reporting false sale of securities with intent to deceive 59.770
Manipulating market by pretended sales 59.780
Broker’s trading against customer’s order 59.790
Insolvent broker-dealer receiving securities from customer 59.800
Pledge or sale by broker-dealer of customer’s securities 59.810
Delivery to customer of true statement of purchase or sale made by broker 59.820
Actions against corporation for second violation 59.830
Self-incrimination by witness 59.991
Criminal penalties for ORS 59.005 to 59.505 and 59.710 to 59.830 59.995
Civil penalties for ORS 59.005 to 59.505 and 59.710 to 59.830
Green check means up to date. Up to date

Current through early 2024

§ 59.127’s source at oregon​.gov