§ 4.1.4

• Jurisdiction: Arizona

§ 4.1.4 Extended-Primary and Secondary Liability

As discussed more fully in Section 6.1.1 below, Arizona's Securities Act extends primary liability to any person who makes, participates in or induces any Arizona securities registration violations.⁶⁷⁰ The common-law doctrine of respondeat superior also establishes secondary liability for violations of Arizona registration statutes.⁶⁷¹

Arizona enacted a controlling-persons statute in 1996.⁶⁷² But for unexplained reasons, the legislature drafted the statute so that it only applies to Arizona securities-fraud violations.⁶⁷³ It does not apply to registration violations, unlike its federal counterpart.⁶⁷⁴

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Notes:

^{[670] 670.} See A.R.S. § 44-2003(A) (2013) (extending primary liability to any person who made, participated in or induced the unlawful sale or purchase of securities to an action brought under §§ 44-2001 or 44-2002, which includes the sale of unregistered securities in violation of § 44-1841 as well as transactions by unregistered dealers and salesmen in violation of § 44-1842); Davis v. Metro Prods., Inc., 885 F.2d 515, 523 n.10 (9 Cir. 1989) (affirming the finding that company shareholders and officers who...