Full text of Utah Utah Code § 61-1-2 — Investment adviser -- Unlawful acts., with citation guidance and answers to common questions.
§ 61-1-2. Investment adviser -- Unlawful acts.
61-1-2.
Investment adviser -- Unlawful acts.
(1)
It is unlawful for any person who receives any consideration from another person primarily for advising the other person as to the value of securities or their purchase or sale, whether through the issuance of analyses or reports or otherwise to:
(a)
employ any device, scheme, or artifice to defraud the other person;
(b)
engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the other person; or
(c)
divide or otherwise split any consideration with any person not licensed under this chapter as an investment adviser or investment adviser representative.
(2)
(a)
Except as may be permitted by rule of the division, it is unlawful for any investment adviser to enter into, extend, or renew any investment advisory contract unless it provides in writing that:
(i)
the investment adviser shall not be compensated on the basis of a share of capital gains upon or capital appreciation of the funds or any portion of the funds of the client;
(ii)
no assignment of the contract may be made by the investment adviser without the consent of the other party to the contract; and
(iii)
the investment adviser, if a partnership, shall notify the other party to the contract of any change in the membership of the partnership within a reasonable time after the change.
(b)
Subsection 61-1-2(2)(a)(i) does not prohibit an investment advisory contract which provides for compensation based upon the total value of a fund averaged over a definite period, or as of definite dates or taken as of a definite date.
(c)
"Assignment," as used in Subsection 61-1-2(2)(a)(ii), includes any direct or indirect transfer or hypothecation of an investment advisory contract by the assignor or of a controlling block of the assignor's outstanding voting securities by a security holder of the assignor.
(d)
If the investment adviser is a partnership, no assignment of an investment advisory contract is considered to result from the death or withdrawal of a minority of the members of the investment adviser having only a minority interest in the business of the investment adviser, or from the admission to the investment adviser of one or more members who, after admission, will be only a minority of the members and will have only a minority interest in the business.
(3)
It is unlawful for any investment adviser to take or have custody of any securities or funds of any client if:
(a)
the division by rule prohibits custody; or
(b)
in the absence of a rule, the investment adviser fails to notify the division that he has or may have custody.
(4)
The division may by rule adopt exemptions from Subsections 61-1-2(2)(a)(i), (ii), and (iii) where such exemptions are consistent with the public interest and within the purposes fairly intended by the policy and provisions of this chapter.
Section 61-1-2 ("Investment adviser -- Unlawful acts.") is part of the Utah Code, the codified statutory law of Utah. It sets out the legal rule or procedure described in the text above. Statutes are amended regularly, so always verify against the official source.
How do I cite Utah § 61-1-2?
A common citation format is "Utah Code § 61-1-2" (Utah). Legal writing may require the code abbreviation, section number, and year or edition. Match the style required by your court, professor, or publisher.
Is this the official text of Utah law?
No. This page is for research and education and may not include the most recent amendments. For official current law, check the Utah official source linked on this page or consult a licensed Utah attorney.
How does Utah § 61-1-2 apply to my situation?
Statutes are interpreted in context, and application depends on your specific facts. Only a licensed attorney in Utah can advise on how this section applies to you. Contact your state or local bar association for a referral.
