Shonts

(after stating facts as above).

The problems presented by these motions must be solved by an analysis of the statute or by reference to similar statutes or claims of similar character, because, owing to the newness of the Securities Act of 1933, there are no cases determining them.

The Congress of the United States, for the first time in its history, undertook in 1933, to pass a statute similar to the state Corporate Securities statutes, commonly known as “blue sky laws”. They take their name from their object, which is to prevent promoters of corporate securities from selling “the blue sky” to investors, or at least, from promising it to them. Most of these statutes are regulatory only. They regulate the securities which may or may not be issued or sold in a state and set up agencies for the granting of permits to issue or sell securities. They do not, as a rule, create any special claim of a civil nature for falsity in the application for a permit. The person who feels defrauded, by any misrepresentation relating to the stock, must resort to the law action of deceit or to the equity suit of rescission.

This Act, however, creates a civil liability of a specific character. It…