This page is no longer current. You are being redirected to the current text at http://www.law.cornell.edu/uscode/text/15/80b-6. If you are not forwarded to the new page, please click here. To avoid this message in the future, please select your links from the Table of Contents page at http://www.law.uc.edu/CCL/sldtoc.html.

 Securities Lawyer's Deskbook
                         published by The University of Cincinnati College of Law
UC Law logo

Notice: The information on this page may not be current. To learn more, please click here.



The
Investment Advisers Act of 1940





Section 206 -- Prohibited Transactions by Investment Advisers


It shall be unlawful for any investment adviser, by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly--

  1. to employ any device, scheme, or artifice to defraud any client or prospective client;

  2. to engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client;

  3. acting as principal for his own account, knowingly to sell any security to or purchase any security from a client, or acting as broker for a person other than such client, knowingly to effect any sale or purchase of any security for the account of such client, without disclosing to such client in writing before the completion of such transaction the capacity in which he is acting and obtaining the consent of the client to such transaction. The prohibitions of this paragraph (3) shall not apply to any transaction with a customer of a broker or dealer if such broker or dealer is not acting as an investment adviser in relation to such transaction;

  4. to engage in any act, practice, or course of business which is fraudulent, deceptive, or manipulative. The Commission shall, for the purposes of this paragraph (4) by rules and regulations define, and prescribe means reasonably designed to prevent, such acts, practices, and courses of business as are fraudulent, deceptive, or manipulative.


Legislative History


Aug. 22, 1940, ch 686, Title II, § 206, 54 Stat. 852; Sept. 13, 1960, P.L. 86-750, §§ 8, 9, 74 Stat. 887.


Notice to Users: The Deskbook is made available with the understanding that the University of Cincinnati College of Law is not engaged in rendering legal, accounting or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. See Terms and Conditions of Use.  UC Brand Ingot

© Copyright 1998-2011, University of Cincinnati, All Rights Reserved
 Contact: ronald.jones@uc.edu