Issue: Whether an officer of a corporation is exempt from licensing requirements for sale of the corporation’s debenture bonds under Montana’s blue sky law.
|Area of Law:||Corporate & Securities|
|Keywords:||Licensing requirements; Broker-dealer, salesperson; Blue sky laws|
|Cited Statutes:||Mont. Code § 30-10-103(1), § 30-10-103(20)(a), § 30-10-103(20)(b); Mont. Code § 30-10-105, 30-10-104|
“It is unlawful for a person to transact business in [Montana] as a broker-dealer or salesperson, …FN1 unless the person is registered under parts 1 through 3 of [the Securities Act of Montana].”
“Broker-dealer” and “salesperson” are defined by statute.
(1)(a) “Broker-dealer” means any person engaged in the business of effecting transactions in securities for the account of others or for the person’s own account.
(b) The term does not include:
(i) a salesperson, issuer, bank, savings institution, trust company, or insurance company; or
(ii) a person who does not have a place of business in this state if the person effects transactions in this state exclusively with or through the issuers of the securities involved in the transactions, other broker-dealers, or banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, pension or profit-sharing trusts, or other financial institutions or institutional buyers, whether acting for themselves or as trustee.
Mont. Code § 30-10-103(1) (emphasis added). A “salesperson” is “an individual other than a broker-dealer who represents a broker-dealer or issuer in effecting or attempting to effect sales of securities. A partner, officer, or director of a broker-dealer or issuer is a salesperson only if the person otherwise comes within this definition.” Id., § 30-10-103(20)(a).
The statutory provision specifies when a person is not within the definition of salesperson: