Colorado § 11-51-102 - Scope of article.

§ 11-51-102. Scope of article.

(1) Except as provided in subsection (7) of this section, sections 11-51-301, 11-51-401 (1) and (2), 11-51-501, and 11-51-503 apply to persons who sell or offer to sell when an offer to sell is made in this state or when an offer to purchase is made and accepted in this state.

(2) Sections 11-51-401 (1) and (2), 11-51-501, and 11-51-503 apply to persons who purchase or offer to purchase when an offer to purchase is made in this state or when an offer to sell is made and accepted in this state.

(3) For the purpose of this section, an offer to sell or to purchase is made in this state, whether or not either party is then present in this state, when the offer originates from this state or is directed by the offeror to this state and is received at the place to which it is directed or, in the case of a mailed offer, at any post office in this state.

(4) For the purpose of this section, an offer to purchase or to sell is accepted in this state when acceptance is communicated to the offeror in this state and has not previously been communicated to the offeror, orally or in writing, outside this state; and acceptance is communicated to the offeror in this state, whether or not either party is then present in this state, when the offeree directs it to the offeror in this state reasonably believing the offeror is to be in this state and it is received at the place to which it is directed or, in the case of a mailed acceptance, at any post office in this state.

(5) (a) For the purpose of subsections (1) to (4) of this section, an offer to sell or to purchase made in a newspaper or other publication of general, regular, and paid circulation is not made in this state if the publication:

(I) Is not published in this state; or

(II) Is published in this state, but has had more than two-thirds of its circulation outside this state during the past twelve months.

(b) For the purpose of this subsection (5), if a publication is published in editions, each edition is a separate publication except for material common to all editions.

(6) (a) For the purpose of subsections (1) to (4) of this section, an offer to sell or to purchase made in a radio or television broadcast or other publicly distributed electronic communication received in this state which originates outside this state is not made in this state. For the purpose of subsection (8) of this section, investment advisory services limited to holding oneself out as an investment adviser or financial planner or similar type of adviser or consultant, but not the transaction of any further business, in a radio or television broadcast or other publicly distributed electronic communication received in this state in a manner originating outside this state shall not be construed as investment advisory services provided in this state.

(b) For the purpose of this subsection (6), a radio or television broadcast or other publicly distributed electronic communication originates in this state if either the broadcast studio or the originating source of transmission is located in this state, unless:

(I) The broadcast or communication is syndicated and distributed from outside this state for redistribution to the general public in this state;

(II) The broadcast or communication is supplied by a radio, television, or other electronic network with the electronic signal originating from outside this state for redistribution to the general public in this state;

(III) The broadcast or communication is an electronic signal that originates outside this state and is captured for redistribution to the general public in this state by a community antenna or cable, radio, cable television, or other electronic system; or

(IV) The broadcast or communication consists of an electronic signal that originates in this state, but which is not intended for redistribution to the general public in this state.

(7) Section 11-51-301 and section 11-51-604, to the extent such section relates to section 11-51-301, do not apply to any person with respect to a sale or offer to sell where the sale or offer to sell is directed to another person not located in this state, does not violate a securities registration requirement or its equivalent in the laws of the jurisdiction in which the other person is located, and is not made for the purpose of evading the provisions of this article.

(8) For purposes of section 11-51-401 (1.5), (1.6), and (2.5), "transacting business in this state" includes engaging in any of the activities enumerated in section 11-51-201 (9.5)(a) or holding oneself out as an investment adviser, financial planner, or similar type of adviser or consultant if such activities are engaged in, or the holding out occurs, within the state regardless of whether a person to whom services are provided or to whom such holding out is made is physically present within the state. "Transacting business in this state" also includes engaging in the services or so holding oneself out whenever a person to whom such services are provided or to whom such holding out is made is both a resident of, and physically present within, the state.

(9) Section 11-51-501 (2) and (3) apply if:

(a) Any of the proscribed conduct occurs within this state regardless of whether a client or prospective client is present within the state when such conduct occurs; or

(b) A client or prospective client is physically present within the state when any of the proscribed conduct occurs in this state.

Source: L. 90: Entire article R&RE, p. 700, § 1, effective July 1. L. 98: (1), (2), and (6)(a) amended and (8) and (9) added, p. 546, § 1, effective April 30.

Editor's note: This section is similar to former § 11-51-127 as it existed prior to 1990.

ANNOTATION

Annotator's note. Since § 11-51-102 is similar to § 11-51-127 as it existed prior to the 1990 repeal and reenactment of this article, relevant cases construing that provision have been included in the annotations to this section.

Jurisdiction. Whether the contracts are executed in Colorado or out of state is irrelevant since the Colorado securities act expressly covers the solicitation of an offer to buy in this state, and actual execution of a contract within the state is not essential to the exercise of jurisdiction over appellant. Raymond Lee Org., Inc. v. Sec. Comm'n, 36 Colo. App. 417, 543 P.2d 75 (1975), rev'd on other grounds, 192 Colo. 112, 556 P.2d 1209 (1976).

No requirement that entire transaction occur in Colorado. The disjunctive "or" used in subsection (1) reinforces the view that, whenever either the offer or the sale occurs in this state, the Colorado Securities Act applies. Rosenthal v. Dean Witter Reynolds, Inc., 883 P.2d 522 (Colo. App. 1994), aff'd, 908 P.2d 1095 (Colo. 1995).

This section does not void forum selection clauses in contracts. While the act applies when securities are bought in Colorado, this does not imply that the parties cannot agree to litigate disputes in another forum. Cagle v. Mathers Family Trust, 2013 CO 7, 295 P.3d 460.

Applied in Simms Inv. Co. v. E.F. Hutton & Co. Inc., 699 F. Supp. 543 (M.D. N. C. 1988).

PART 2

DEFINITIONS AND REFERENCES TO FEDERAL STATUTES AND RULES