1. (a) Any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person; and
2. (b) Any untrue statement of a material fact and any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, if the person making the statement or omission knows or has reasonable grounds to believe that it is untrue or misleading.

The phrase “manipulative, deceptive, or other fraudulent scheme, device, or contrivance,” as used in subdivision (a) of Section 25216 of the Code is hereby defined to include:

Note: Authority cited: Sections 25216(a) and 25610, Corporations Code. Reference: Section 25216, Corporations Code.

History

1. Editorial correction adding Note filed 4-6-83 (Register 83, No. 15).