§ 25401 Securities Fraud Prohibition

Corporations Code·California

AI SummaryVerified

Key Takeaways

•You can't lie or leave out important facts when selling or buying investments (like stocks or bonds).
•If you say something that tricks someone into buying or selling, that's breaking the law.
•This applies to anything you say or write about the investment.

Example

Someone tries to sell you shares in a company by saying the company is making lots of money, but they don’t tell you the company is actually in big debt.

This is against the law because they lied about how the company is doing and left out the truth about the debt.

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

Official Source

View on CA.gov

§ 25401 Securities Fraud Prohibition

It is unlawful for any person to offer or sell a security in this state, or to buy or offer to buy a security in this state, by means of any written or oral communication that includes an untrue statement of a material fact or omits to state a material fact necessary to make the statements made, in the light of the circumstances under which the statements were made, not misleading. (Amended by Stats. 2015, Ch. 190, Sec. 19. (AB 1517) Effective January 1, 2016.)

Last verified: January 23, 2026

Key Terms

unlawful offer or sell a security buy or offer to buy a security untrue statement of a material fact omits to state a material fact not misleading

References

Official text at leginfo.legislature.ca.gov
California Legislature. Corporations Code. Section 25401.

Key Takeaways

Example

Key Terms

Related Statutes

References

Key Takeaways

Example

Key Terms

Related Statutes

References