Untitled Texas Attorney General Opinion ( 1960 )

THEA~TORNEYGENERAI.
OF TEXAS
Ausnlv 1% TEXAS
October 18, 1960
Honorable William M. King Opinion No. WW-95 1
Securities Commissioner
State Securities Board Re: Whether the Securities Commis-
State Office Building sioner has authority to publish an
Austin 11, Texas administrative interpretation of Sec-
tion 1 OA of the Securities Act.
Dear Sir:
You have requested our opinion as to whether the Securities Com-
missioner has authority to publish an administrative interpretation of
Section 1 OA of the Securities Act. Article 58 1, V. C. S. For brevity’s
sake, we do not now quote the language detailed on the four pages of
your request, but rather state that this interpretation defines and inter-
prets the key phrases of Section 1 OA and, in addition, lists some seven
factors illustrative of those to be considered in determining whether or
not the proposed plan of business appears to be “fair, just and equitable”
and some six factors illustrative of those not to be considered.
The application of the doctrine of “fair, just and equitable” to a
particular proposed plan of business requires the exercise of discretion-
ary judgment by the Securities Commissioner, based on the particular
fact situation presented. There are a multitude of factors which may
be considered with respect to any individual case and the relative weight
to be given these factors is a matter within the discretion of the Commis-
sioner. However, in determining whether or not a particular proposed
plan of business is “fair, just and equitable, ” the Commissioner, by neces-
sity, must test such a plan with a definite set of factors in mind. Cer-
tainly the Commissioner has authority to publish and thereby notify the
securities industry of these standards of general application he will take
into consideration in guiding his judgment in a determination under Sec-
tion 1 OA.
We do not find that the Securities Commissioner is without author-
ity to issue this administrative interpretation. However, in the absence
of a particular fact situation by which to test the propriety of the illustra-
tive factors contained in your request, this office cannot determine whether
or not these facts are contrary to the intent of the Securities Act in an
individual case.
Hon. William M. King, page 2 (WW-951)
SUMMARY
The Securities Commissioner has authority to
publish an administrative interpretation of Section 1 OA
of the Texas Securities Act, but the Attorney General,
by this opinion, does not pass on the propriety of the
illustrative factors contained therein as used in deter-
mining whether or not a particular proposed plan of
business is “fair, just and equitable. ”
Very truly yours,
WILL WILSON
Attorney General of Texas
BY
Richard A. Weils
RAWlpe Assistant Attorney General
APPROVED:
OPINION COMMITTEE:
W. V. Geppert, Chairman
Virgil Pulliam
Robert T. Lewis
Grundy Williams
Tom I. McFarling
REVIEWED FOR THE ATTORNEY GENERAL
BY:
Leonard Passmore