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handle is hein.ali/alifs0054 and id is 1 raw text is: FEDERAL SECURITIES CODE
Supplement No. 4 to
Proposed Final DraTt No. 3
NOTE: This replaces Supp. No. 3 but not
Supp. No. 2.
S227(b)(3). Change (C) and (D) to (B) and (C). In lines 3-4,
delete: whether the issuer is a one-year registrant,
§227(b) (7), line 6. Substitute: the issuer, its transfer
agent, or the seller with regard to * * *
§234D(bb) [§234D(aa) in PFD3]. Substitute:
(bb) [Knowledge or recklessness.] Notwith-
standing section 234D(a), a person engages in a
fraudulent act only if he acts with knowledge
that his conduct is of a type specified in that
section, or in reckless disregard of whether that
is so.
S251A. At end, insert:
(c) (Agency and similar relationships.]
(1) Questions of imputation of the knowledge,
scienter, belief, or negligence of an agent,
partner, or director to his principal or company
(or to another agent, partner, or director of
his principal or company) are governed by the
principles of common law and equity, applied
as a matter of federal jurisprudence.
(2) In determining, for purposes of sections
1301(a), 1303(a), and 1304(c), whether to make an
imputation pursuant to section 251A(c) (1) in respect
of facts concerning-an issuer or its securities
that are not generally available, the court shall
consider whether the principal or company operated
under established procedures reasonably designed
(A) to prevent transmission of those facts to persons
other than those with responsibility for administering
those procedures or acting in furtherance of a pur-
pose for which access was given by the issuer or
(B) to prevent transactions and recommendations
concerning securities of the issuer.


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