Chapter 4Unlawful Activities and Fraudulent Conduct

Section § 29535

Explanation

This law states that you can't operate as a commodity merchant unless you're registered or licensed with the Commodity Futures Trading Commission (CFTC), or you're exempt from needing a registration. It also says that a board of trade can't facilitate trading of certain commodity contracts unless it's been designated by the CFTC and has that designation in good standing.

(a)CA Corporations Code § 29535(a) No person shall engage in a trade or business or otherwise act as a commodity merchant unless the person (1) is registered or temporarily licensed with the Commodity Futures Trading Commission for each activity constituting that person as a commodity merchant and the registration or temporary license shall not have expired, been suspended, or revoked; or (2) is exempt from the registration by virtue of the Commodity Exchange Act (7 U.S.C. Sec. 1 et seq.) or of a CFTC rule.
(b)CA Corporations Code § 29535(b) No board of trade shall trade, or provide a place for the trading of, any commodity contract required to be traded on or subject to the rules of a contract market designated by the Commodity Futures Trading Commission, unless the board of trade has been so designated for the commodity contract and that designation shall not have been vacated, suspended, or revoked.
commodity merchant commodity futures CFTC registration trading license board of trade commodity contract contract market trading designation trading exemption Commodity Exchange Act
(Added by Stats. 1990, Ch. 969, Sec. 2.)

Section § 29536

Explanation

This law makes it illegal for anyone involved in buying, selling, or offering commodities to deceive or defraud others. Specifically, it prohibits using tricks or schemes to defraud, making false statements or omitting important facts, engaging in transactions that deceive people, and misusing someone else's funds or property.

It is unlawful for any person, directly or indirectly, in connection with the purchase or sale of, the offer to sell, the offer to purchase, the offer to enter into, or the entry into, a commodity, commodity contract, or commodity option to do any of the following:
(a)CA Corporations Code § 29536(a) To willfully employ any device, scheme, or artifice to defraud.
(b)CA Corporations Code § 29536(b) To willfully make any false report, enter any false record, make any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.
(c)CA Corporations Code § 29536(c) To willfully engage in any transaction, act, practice, or course of business which operates or would operate as a fraud or deceit upon any persons.
(d)CA Corporations Code § 29536(d) To willfully misappropriate or convert the funds, security, or property of any other person.
commodity fraud false reporting misleading statements artifice to defraud deceitful practices fraudulent transactions misappropriation fund conversion commodity contract commodity option willful deception false record entry material fact omission
(Added by Stats. 1990, Ch. 969, Sec. 2.)

Section § 29537

Explanation

This law explains when certain rules apply to people who make offers to buy or sell items in California. It says that if an offer to sell or buy starts in California or is directed to someone in California, then these rules apply, even if the people involved are not physically in the state. An offer is considered made or accepted in California if communication happens here. However, if an offer is made through a newspaper, radio, or TV program mainly outside of California, then it’s not considered made in California.

(a)CA Corporations Code § 29537(a) Sections 29520, 29535, and 29536 apply to persons who sell or offer to sell when either of the following occur:
(1)CA Corporations Code § 29537(a)(1) An offer to sell is made in this state.
(2)CA Corporations Code § 29537(a)(2) An offer to buy is made and accepted in this state.
(b)CA Corporations Code § 29537(b) Sections 29520, 29535, and 29536 apply to persons who buy or offer to buy when either of the following occur:
(1)CA Corporations Code § 29537(b)(1) An offer to buy is made in this state.
(2)CA Corporations Code § 29537(b)(2) An offer to sell is made and accepted in this state.
(c)CA Corporations Code § 29537(c) For the purpose of this section, an offer to sell or to buy is made in this state, whether or not either party is then present in this state, when the offer:
(1)CA Corporations Code § 29537(c)(1) Originates from this state.
(2)CA Corporations Code § 29537(c)(2) Is directed by the offeror to this state and received at the place to which it is directed (or at any post office in this state in the case of a mailed offer).
(d)CA Corporations Code § 29537(d) For the purpose of this section, an offer to buy or to sell is accepted in this state when acceptance:
(1)CA Corporations Code § 29537(d)(1) Is communicated to the offeror in this state.
(2)CA Corporations Code § 29537(d)(2) Has not previously been communicated to the offeror, orally or in writing, outside this state. 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 to be in this state and it is received at the place to which it is directed (or at any post office in this state in the case of a mailed acceptance).
(e)CA Corporations Code § 29537(e) An offer to sell or to buy is not made in this state when either of the following occur:
(1)CA Corporations Code § 29537(e)(1) The publisher circulates or there is circulated on his or her behalf in this state any bona fide newspaper or other publication of general, regular, and paid circulation which is not published in this state, or which is published in this state but has had more than two-thirds of its circulation outside this state during the past 12 months.
(2)CA Corporations Code § 29537(e)(2) A radio or television program originating outside this state is received in this state.
offer to sell offer to buy originates from state directed to state communication of acceptance newspaper publication radio program television program out-of-state circulation California jurisdiction offeror offeree place of acceptance mail acceptance offer direction
(Added by Stats. 1990, Ch. 969, Sec. 2.)

Section § 29538

Explanation

This law makes it illegal for anyone to deliberately alter, destroy, or hide records, or to make false entries in documents in order to interfere with the enforcement of certain corporate regulations. It also prohibits making false statements to officials during licensing or investigations with the intent to disrupt the enforcement process.

(a)CA Corporations Code § 29538(a) It is unlawful for any person to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the administration or enforcement of this division.
(b)CA Corporations Code § 29538(b) It is unlawful for any person to knowingly make an untrue statement to the commissioner during the course of licensing, investigation, or examination, with the intent to impede, obstruct, or influence the administration or enforcement of any provision of this division.
record alteration document falsification evidence tampering administration obstruction false entries corporate regulations untrue statements commissioner investigations licensing process interference document concealment enforcement disruption false document entry investigation obstruction
(Added by Stats. 2007, Ch. 101, Sec. 10. Effective January 1, 2008.)