Civil Liability and Remedies in Ohio Securities Transactions

The Ohio Securities Act (“OSA”) was enacted in 1913 to “guard [ ] investors against fraudulent enterprises, to prevent sales of securities based only on schemes purely speculative in character, and to protect the public from swindling peddlers of worthless stocks in mere paper corporations.” The OSA, which is administered by the Ohio Division of Securities (“Division”) and enforced by both the Division and private litigants, regulates the sale and purchase of securities in Ohio. The OSA and the rules and regulations promulgated pursuant to it by the Division are designed both to encourage compliance by those who might otherwise (intentionally or not) violate the OSA and to provide recourse for those persons who are, despite the Division\u27s efforts at ensuring compliance, injured by violations of the OSA. The OSA is a remedial law; and, therefore, Ohio courts are bound to construe it in favor of protecting injured buyers and sellers of securities. The protections afforded to purchasers and sellers of securities by the OSA and its companion rules and regulations are supplemented by Ohio common law. State law liabilities and remedies for securities violations have gained increasing importance in light of recent judicial and legislative limitations on federal securities liabilities and remedies