For reversal -- Chief Justice Weintraub, Justices Jacobs, Hall and Mountain, and Judges Conford and Lewis. For affirmance -- None. The opinion of the Court was delivered by Mountain, J. Weintraub, C.J. (concurring). Mr. Justice Jacobs joins in this concurring opinion.
The issue here presented is whether the Division of Consumer Affairs*fn1 has authority by virtue of the Uniform Securities Law (1967), N.J.S.A. 49:3-47, et seq., to review the merits of a federally registered securities offering where sales of securities in this State are contemplated.
By order entered June 23, 1971 the Division directed plaintiff, Data Access Systems, Inc. (Data) to cease and desist from selling or offering for sale in New Jersey a proposed common stock issue which had been registered with the Securities and Exchange Commission (SEC) under the Securities Act of 1933, 15 U.S.C.A. § 77a, et seq. On appeal the agency's ruling was affirmed by the Appellate Division, 117 N.J. Super. 95 (1971). Immediately thereafter
the Securities Industry Association (then known as the Investment Bankers Association of America)*fn2 sought leave to appear before the Appellate Division as amicus curiae and to file a brief in support of an application for a rehearing. Leave to appear was granted but the petition for rehearing was denied. We then granted the Association leave to proceed before this Court as amicus curiae and granted the petition for certification presented jointly by Data and the Association. 60 N.J. 283 (1972).
Data is a New Jersey corporation organized in June 1969 and engaged in the assembly of electronic communications equipment relating to computers; its principal office is located in Dover, New Jersey. Wishing to issue and sell additional shares as a public offering, on February 12, 1971 Data filed with the SEC a registration statement covering a proposed offering of 200,000 shares of its common stock to be sold through underwriters. On February 16, 1971 Data filed with the then Bureau of Securities a notification of intent to sell securities within this State, accompanied by a copy of the prospectus which had been included in the registration statement filed with the SEC. This was done in compliance with the Bureau's Regulation 13:13-52,*fn3 which
purported to require such notification and filing as a prerequisite to qualification for offer and sale within this state. On May 25, 1971 the agency issued an order enjoining the sale of the shares in New Jersey, and following a hearing, entered the cease and desist order of June 23, 1971, mentioned above. This action was predicated principally upon a finding that the offering involved unreasonable amounts of promoters' participation contrary to N.J.S.A. 49:3-64(a)(vi).
The decision of the agency rested upon a determination that it had authority to make a substantive review of the terms of the proposed offering. The appellants here contend, as they did below, that the New Jersey statute makes no provision for such a review where the proposed offering, as is here the case, has been registered with the SEC under the Securities Act of 1933. The question is one of statutory interpretation.
The Uniform Securities Law (1967), N.J.S.A. 49:3-47, et seq.,*fn4 was intended to supersede, with a single exception,*fn5 all earlier legislation dealing with the same subject matter. N.J.S.A. 49:3-48. Although it was modeled upon the Uniform Securities Act which had been approved by the National Conference of Commissioners on Uniform State Laws, 7 Uniform Laws Annotated-Business and Financial Laws (Master ed.) 691, it departs from the latter in a number of important respects. Especially significant to the present inquiry is a comparison of those sections of
the two laws dealing with the question as to what securities may lawfully be sold within a given state.
The Uniform Act -- as opposed to our law -- provides, in § 301, that it is unlawful for any person to offer or sell any security within the state unless it has first been registered with the state agency or is exempt under the act. Compare the New Jersey statute, which reads, in pertinent part as follows:
It is unlawful for any security to be offered or sold in this State unless:
(a) the security or transaction is exempted under section 3 [ N.J.S.A. ...