Section 16-38-42 - Advertisements(a) It shall constitute a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 485-25, HRS, for any investment adviser, directly or indirectly, to publish, circulate, or distribute any advertisement: (1) Which 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 the investment adviser; or(2) Which refers, directly or indirectly, to past specific recommendations of the investment adviser which were or would have been profitable to any person; provided that this shall not prohibit an advertisement which sets out or offers to furnish a list of all recommendations made by the investment adviser within the immediately preceding period of not less than one year if the advertisement, and list if it is furnished separately: (A) State the name of each security recommended, the date and nature of each recommendation (e.g., 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 security as of the most recent practicable date; and(B) Contain the following cautionary legend on the first page thereof 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"; or(3) Which 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 shall assist any person in making a decision as to which securities to buy, sell, or when to buy or sell them, without prominently disclosing in the advertisement the limitations thereof and the difficulties with respect to its use;(4) Which contains any statement to the effect that any report, analysis, or other service shall be furnished free or without charge, unless the report, analysis, or other service actually is or shall be furnished entirely free and without any condition or obligation, directly or indirectly.(b) It shall constitute a fraudulent, deceptive, or manipulative act, practice, or course of business within the meaning of section 485-25, HRS, for any investment adviser or federal covered adviser, directly or indirectly, to publish circulate, or distribute any advertisement that contains any untrue statement of a material fact, or which is otherwise false or misleading.(c) For purposes of this section, 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: (1) 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;(2) 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(3) Any other investment advisory service with regard to securities.[Eff and comp 10/12/85; am and comp 4/14/03] (Auth: HRS § 485-2) (Imp: HRS § 485-25)