Administrator Jurisdiction & Investigatory Powers
Covers the three-part jurisdictional nexus under USA Section 414 (originated, directed, accepted), broadcast/media exclusions, and investigatory subpoena powers.
- Jurisdiction exists if an offer originates in, is directed to, or is accepted in the Administrator's state.
- Offers in out-of-state newspapers or papers with > 2/3 circulation outside the state are NOT offers in the state.
- The Administrator can subpoena witnesses, compel testimony, and demand records across state lines, but CANNOT arrest people.
Under Section 414 of the Uniform Securities Act, a state Administrator has jurisdiction over any securities transaction or offer if: (1) the offer originated in the Administrator's state, (2) the offer was directed into the Administrator's state and received there, or (3) the offer was accepted in the Administrator's state. Multiple state Administrators frequently share concurrent jurisdiction over interstate transactions.
Statutory exclusions protect broadcast and print media: An offer is NOT deemed made in a state if published in a newspaper published outside the state, or in a newspaper published inside the state that has more than two-thirds of its circulation outside the state. Radio and television broadcasts originating outside the state are likewise excluded.
Under Section 407, the Administrator possesses broad investigatory powers. The Administrator may conduct private or public investigations inside or outside the state, subpoena witnesses, compel the attendance of witnesses across state lines, administer oaths, and demand the production of books and records.
- If an agent in State A calls a client in State B who accepts in State B, BOTH State A and State B Administrators have jurisdiction.
- The Administrator cannot issue criminal sentences; criminal cases must be referred to the state Attorney General.
An agent registered in State A sends an email offering to sell an unregistered stock to a retail investor residing in State B. The investor reads the email while at home in State B, accepts the offer, and wires payment from her bank account in State B to the broker-dealer in State A. Under Section 414 of the Uniform Securities Act, which state Administrator(s) possess jurisdiction over this transaction?