Ala. Admin. Code r. 830-X-3-.22

Current through Register Vol. 43, No. 1, October 31, 2024

Section 830-X-3-.22 - Advertisements By Investment Advisers

(1) It is a fraudulent, deceptive or manipulative act, practice or course of business, within the meaning of the state securities act, for an investment adviser, directly or indirectly, to publish, circulate or distribute any advertisement which:

(a) Refers, directly or indirectly, to any testimonial of any kind concerning the investment adviser or concerning any advice, analysis, report or other service rendered by such investment adviser;

(b) Refers, directly or indirectly, to past specific recommendations made by the investment adviser which were, or would have been, profitable to any person. This clause does not, however, prohibit an advertisement which sets out or offers to furnish a list of all recommendations made by such investment adviser within the immediately preceding period of not less than one year. The advertisement (or list if it is offered separately) must state the name of each such security recommended, the date and nature of each such recommendation (i.e., whether to buy, sell or hold), the market price at that time, the price at which the recommendation was to be acted upon, and the market price of each such security as of the most recent practicable date. It must also contain the following cautionary legend on the first page in print or type as large as the largest print or type used in the body or text thereof: "It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities in this list.";

(c) Represents, directly or indirectly, that any graph, chart, formula or other device being offered can in and of itself be used to determine which securities to buy or sell, or when to buy or sell them; or which represents directly or indirectly, that any graph, chart, formula or other device being offered will assist any person in making his own decisions as to which securities to buy or sell, or when to buy or sell them, without prominently disclosing in such advertisement the limitations thereof and any difficulties with respect to its use;

(d) Contains any statement to the effect that any report, analysis, or other service will be furnished free of charge, unless such report, analysis or other service actually is or will be furnished entirely free and without any condition or obligation, directly or indirectly; or

(e) Contains any untrue statement of a material fact, or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading, or which is otherwise false or misleading.

(2) For the purposes of these requirements the term "advertisement" shall include any notice, circular, letter or other written communication addressed to more than one person, or any notice or other announcement in any publication or by radio or television which offers any of the following:

(a) Any analysis, report, or publication concerning securities, or which is to be used in making any determination as to when to buy or sell any security, or which security to buy or sell;

(b) Any graph, chart, formula or other device to be used in making any determination as to when to buy or sell any security, or which security to buy or sell; or

(c) Any other investment advisory service.

Author:

Ala. Admin. Code r. 830-X-3-.22

Filed September 28, 1990.

Statutory Authority:Code of Ala. 1975, § 8-6-23.