Chapter §1.5 Violation of Registration Provisions

• Jurisdiction: Washington

§1.5 VIOLATION OF REGISTRATION PROVISIONS

The WSSA's private action extends primary liability to sellers that violate certain of its registration provisions. RCW21.20.430(1). Under RCW 21.20.140, it is unlawful for any person to offer or sell a security in Washington unless the security is (1) registered, (2) exempt under state law, or (3) a federal covered security and a Form D has been filed and the required fees paid within 15 days of the sale. Id. Violation by a seller of RCW 21.20.140(1) or (2) exposes a seller to claims by a purchaser. RCW 21.20.430(1); Winkler v. Trico Fin. Corp., 693 F Supp. 896, 903 (WD. Wash. 1987).

Caveat: Enforcement of the WSSA's registration provisions with respect to covered securities resides solely with the state; no private right of action exists for a violation of RCW 21.20.140(3). Chanana's Corp. v. Gilmore, 539 F.Supp.2d 1299, 1305 (W.D. Wash. 2003).

A seller is also liable to a buyer for any violation of the WSSA's requirements for registration by coordination (see RCW 21.20.180- .200) or qualification (RCW 21.20.210- .230).

Comment: Because certain WSSA registration provisions apply only to sellers, the "substantial contributive factor" test governs whether a defendant can be

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