Ill. Admin. Code tit. 14 § 130.771

Current through Register Vol. 48, No. 25, June 21, 2024

Section 130.771 - Acts Which "Work or Tend to Work a Fraud or Deceit", in Connection with Offers, Sales or Dispositions of Investment Fund Shares

Each of the following acts shall constitute an act which "works or tends to work a fraud or deceit" when undertaken in connection with the offer, sale or disposition through dealers or salespersons of investment fund shares:

a) the failure to disclose any allowance by the principal underwriter of discounts from the applicable public offering price which

1) are not alike for all dealers, or

2) vary with the amount of sales by dealers, unless such volume discount is granted in connection with volume purchases by investors;

b) the failure to disclose any offer of special bonuses or concessions, whether in cash or merchandise, special advertising or displays, to any dealer or salesperson, which are not available to all dealers or salespersons on the same basis;

c) the failure to disclose any payment to any dealer or salesperson by the representative of any wholesaler or distributor of any concession in excess of the concession listed in the dealer's contract;

d) the failure to disclose any agreement to give any dealer, either directly or indirectly, any amount of brokerage business in addition to the ordinary contractual allowances, and

e) the failure to disclose any agreement among participants in the underwriting group to share in profits or commissions on orders executed with or for the investment company.

Ill. Admin. Code tit. 14, § 130.771