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HomeCorporations CodeCh. 4§ 25243 Broker-Dealer Misrepresentation Prohibition

§ 25243 Broker-Dealer Misrepresentation Prohibition

Corporations Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 25243 Broker-Dealer Misrepresentation Prohibition

This law says people who have a broker‑dealer or investment‑adviser certificate can't say they were sponsored, recommended, approved, or endorsed by the commissioner, or that the commissioner judged their abilities. They can say they have the certificate if it's true and not in a paid advertisement.

Key Takeaways

  • •Do not claim the commissioner sponsored, recommended, or approved you.
  • •You may state that you hold a certificate if it’s true and not in a paid ad.
  • •Misrepresenting the effect of the license is illegal.

Example

A financial adviser puts an ad that says, “The State Commissioner recommends me for all your investments.”

That statement is not allowed because it claims the commissioner approved or recommended the adviser. The adviser could instead say, “I hold a broker‑dealer certificate,” as long as it’s true and not a paid ad.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 25243 Broker-Dealer Misrepresentation Prohibition

It is unlawful for any person holding a certificate as a broker-dealer or investment adviser under this part to represent or imply in any manner whatsoever that such person has been sponsored, recommended, or approved or that the person’s abilities or qualifications have in any respect been passed upon by the commissioner. Nothing in this section prohibits a statement (other than in a paid advertisement) that a person holds a certificate under this law, if such statement is true in fact and if the effect of such licensing is not misrepresented. (Amended by Stats. 1981, Ch. 1120, Sec. 8. Effective October 2, 1981. Operative November 1, 1981, by Sec. 15 of Ch. 1120.)

Last verified: January 10, 2026

Key Terms

broker-dealerinvestment advisercertificatecommissioner

Related Statutes

  • § 25244 Surrender Revoked Certificates
  • § 25253 Broker-Dealer Remedial Actions
  • § 25256 Broker-Dealer Disciplinary Actions
  • § 25240 Broker-Dealer Service Consent
  • § 25249 Broker-Dealer Violation Orders

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Corporations Code. Section 25243.
View Official Source