Scope of Attorney General powers; consent of director; powers of circuit court; damages, restitution, disgorgement and other penalties
(1)Subject to subsection (2) of this section and after providing notice and an opportunity to participate to the Director of the Department of Consumer and Business Services, the Attorney General may:
(a)Make public or private investigations within or outside this state as the Attorney General considers necessary to:
(A)Determine whether a person has violated or is about to violate any provision of the Oregon Securities Law or any rule or order of the director adopted or issued under the Oregon Securities Law; or
(B)Aid in the enforcement of the Oregon Securities Law or any rule or order of the director adopted or issued under the Oregon Securities Law.
(b)Require or permit a person to file a statement in writing, under oath or otherwise as the Attorney General determines, as to all the facts and circumstances concerning a matter to be investigated.
(c)Administer oaths and affirmations, subpoena witnesses, compel the attendance of witnesses, take evidence and require the production of books, papers, correspondence, memoranda, agreements or other documents or records that the Attorney General considers relevant or material to an investigation.
(d)Bring suit in the name and on behalf of the State of Oregon in the circuit court of any county to:
(A)Enjoin any acts or practices the Attorney General has reason to believe that a person has engaged, is engaging or is about to engage in that constitute a violation of any provision of the Oregon Securities Law or any rule or order of the director adopted or issued under the Oregon Securities Law; or
(B)Enforce compliance with the Oregon Securities Law or any rule or order of the director adopted or issued under the Oregon Securities Law.
(2)The Attorney General may take action under subsection (1) of this section only in connection with any of the following alleged violations or cases:
(a)Alleged violations involving companies whose securities are listed on the New York Stock Exchange, the American Stock Exchange or the National Association of Securities Dealers Automated Quotation System, Inc. National Market System;
(b)Cases in which the Attorney General is pursuing or intends to pursue an investigation or litigation under ORS 166.715 (Definitions for ORS 166.715 to 166.735) to 166.735 (Short title);
(c)Cases in which the Attorney General is pursuing or intends to pursue an investigation or litigation under ORS 336.184 (Oregon Student Information Protection Act) and 646.605 (Definitions for ORS 336.184 and 646.605 to 646.652) to 646.652 (District attorney’s reports to Attorney General); or
(d)Cases in which the Attorney General is pursuing or intends to pursue an investigation or litigation under ORS 646.705 (Definitions for ORS 136.617 and 646.705 to 646.805) to 646.805 (Effect of prior final judgment or decree).
(3)The Attorney General may take action under subsection (1) of this section with respect to cases described in subsection (2)(b), (c) or (d) of this section only after receiving the director’s consent. The director may elect to be a named party in any action the Attorney General takes.
(4)Each witness who appears before the Attorney General under a subpoena issued under this section shall receive the fees and mileage provided for witnesses in ORS 44.415 (Fees and mileage of witnesses) (2). If a person fails to comply with a subpoena issued under this section or if a party or witness refuses to testify on any matters, the judge of the circuit court of any county, on the application of the Attorney General, shall compel obedience by proceedings for contempt as in the case of disobedience of the requirements of a subpoena issued from the court or a refusal to testify in the court.
(5)In an action brought under this section, a court:
(a)Shall grant a permanent or temporary injunction, restraining order or writ of mandamus upon a proper showing by the Attorney General under subsection (1)(d) of this section.
(b)May award reasonable attorney fees to:
(A)The Attorney General if the Attorney General prevails in an action under this section.
(B)A defendant if the defendant prevails in an action under this section and the court determines that the Attorney General had no objectively reasonable basis for asserting the claim or no reasonable basis for appealing an adverse decision of the trial court.
(6)The Attorney General may include any of the following in an action authorized by this section:
(a)A claim for restitution or damages under ORS 59.115 (Liability in connection with sale or successful solicitation of sale of securities), 59.127 (Liability in connection with purchase or successful solicitation of purchase of securities) or 59.137 (Liability in connection with violation of ORS 59.135), on behalf of the persons injured by the act or practice constituting the subject matter of the action. If the court finds that enforcement of the rights of the injured persons by private civil action, whether by class action or otherwise, would be so burdensome or expensive as to be impractical, the court has jurisdiction to award appropriate relief to the injured persons.
(b)A claim for disgorgement of illegal gains or profits derived. The Attorney General shall deposit any moneys recovered under this paragraph in the General Fund of the State Treasury unless the court requires other disposition.
(c)A claim for the appointment of a receiver of any property derived by means of any act or practice that constitutes a violation of any provision of the Oregon Securities Law or any rule or order of the director adopted or issued under the Oregon Securities Law and of any books of account and papers relating to the property. Property for which a receiver may be appointed includes other property with which the property derived by means of a violation has been commingled if the property cannot be identified in kind because of the commingling. The receiver shall take possession of the property, books and papers and shall liquidate the property for the benefit of all persons who intervene in the action and establish an interest in the property. Subject to the approval of the court, the expenses and attorney fees of the receiver and any expenditures required in the liquidation proceeding shall be paid out of the funds of the receivership. The receiver may be the Attorney General. The court may not require the Attorney General to post a bond.
(d)A claim for a fine of not more than $20,000 for each violation. The fine shall be entered as a judgment and paid to the General Fund of the State Treasury. Each violation is a separate offense. In the case of a continuing violation, each day’s continuance is a separate violation, but the maximum penalty for any continuing violation may not exceed $100,000.
(7)This section does not apply to:
(a)A failure to file a notice and pay a fee under ORS 59.049 (Federal covered securities exempt from registration) (1), (2) or (3);
(b)A failure to file a notice and pay a fee under ORS 59.165 (Licensing of broker-dealers, investment advisers and salespersons required) (7);
(c)A failure to pay a fee under ORS 59.175 (Procedures for notice filing and licensing) (9);
(d)A violation of any rule adopted by the director under ORS 59.165 (Licensing of broker-dealers, investment advisers and salespersons required) (7); or
(e)A company that the director has licensed under ORS 59.165 (Licensing of broker-dealers, investment advisers and salespersons required). [2007 c.481 §2; 2017 c.313 §4]
Notes of Decisions
Public policy does not prohibit nonculpable corporate directors held liable under this chapter from seeking indemnification from persons actually responsible for the wrongful issuance of unregistered securities. Collins v. Fitzwater, 277 Or 401, 560 P2d 1074 (1977)
Atty. Gen. Opinions
Additional real estate license not required where security sold is interest in limited partnership to invest in real estate, (1978) Vol 38, p 1971