Honorable James M. Magee AGO 69 Opinion No. 69 Pennsylvania Attorney General Opinions Opinions Of The Attorney General October 7, 1932 Public Service Companies—Securities—Sale of—Dealer—Salesmen—Registration: Securities Act of April 13, 1927, P. L. 273. The Securities Act applies to and affects public service companies and the sale of their securities to the same extent that it applies to other entities and individuals in the sale of securities. The Securities Commission has no authority to regulate the issuance of securities. However, it may investigate any such issue in the hands of dealers, to determine whether fraud has been or is being practiced in the offering and sale of the issue to the public. II' such fraud is found, the Commission may forbid any further offerings or sales of the securities by the dealers. Employes of public service companies, when selling securities of their employers, under certain conditions, need not register as salesmen under the act. Such salesmen are in all other respects subject to the same restrictions and penalties, and the same supervisory power of the Commission as registered salesmen. Department of Justice, Honorable James M. Magee, Chairman, Pennsylvania Securities Commission, Harrisburg, Pennsylvania. Sir: You have asked us to advise you whether the Securities Act of April 13, 1927, P. L. 273, is intended to apply to the registration of public service companies and securities issued by such companies. The Securities Act is intended to regulate individuals and entities dealing in securities, rather than to regulate the issuance of securities or to control the financing of corporations. Such was the interpretation placed on the Act of June 14, 1923, P. L. 779, by the Supreme Court in
N. R. Bagley Co., Inc. v. Peter, G. Cameron, Commissioner of Banking, 282 Pa. 84 (1925). That statute was essentially re-enacted by the Act of 1927, now in effect. In that ease the Supreme Court said, at page 91:
"While the legislative enactments of some states * * * attempt to control the financing of corporations, our act is intended to regulate the registration of stock and bond dealers and salesmen rather than the issuance of securities. Section 15 is the only part of the statute which indicates a purpose to regulate in any manner the securities themselves. "* * *"
And in
Insuranshares Corporation v. Pennsylvania Securities Commission, 298 Pa. 263 (1929), the same interpretation was placed on the Act of 1927. The court said, at page 264:
"* * * the act is intended to regulate the registration of stock and bond dealers and salesmen rather than the issuance of securities and 'does not contemplate the approval by the commission of the business expediency of the plan of financing a corporation whose securities are to be offered for sale by
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