§ 6.1.1.2

• Jurisdiction: Arizona

§ 6.1.1.2 Key developments under § 44-2003

Chronologically, the key judicial and legislative developments under § 44-2003(A) are summarized as follows:

	1951	Section 44-2003(A)'s participate-or- induce standard is enacted as part of the 1951 Securities Act.1594
?	1951-1996	During this period, every case to substantively consider § 44-2003(A) holds that the plaintiff's claim may proceed.1595
?	July 20, 1996	The legislature adds a proportionate- fault scheme to § 44-2003.1596
?	July 20, 1996	The legislature creates a safe harbor under which persons who provide only ordinary professional services are insulated from participant liability.1597
Nov. 7, 1996	In Standard Chartered, the Arizona Court of Appeals holds that § 44-2003 (now § 44-2003(A)) narrows the range of persons who can be held liable for violating § 44-1991.1598 The plaintiff's evidence at trial is held insufficient to establish liability under § 44-2003.1599
?	1997 to Aug. 2010	During the next 13 years, no published decision concerning § 44-2003(A) is issued. But trial-court motions citing Standard Chartered and arguing that the plaintiff's complaint is insufficiently; pleaded under § 44-2003(A) become increasingly prevalent.1600
?	August 2010	In Grand II,1601 the Arizona Supreme Court addresses what must be pleaded for relief under § 44-2003(A) and holds that complaints are not required to plead facts showing whether a person violating § 44-1991(A) "made," "participated in," or "induced" the unlawful sale or purchase.1602

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Notes:

^[1594]See Securities Act of Arizona, ch. 18, § 17(C), 1951 Ariz. Sess. Laws 46, 73 (codified as amended at A.R.S. § 44-2003(A) (2013)).

^[1595]See Davis, 885 F.2d at 523 & n.9 (holding that § 44-2003 (now § 44-2003(A)) gave nonresident officers and directors fair notice that they could be personally liable for securities violations...