Bucket Shop Law

Title 4, Division 4 of the Corporations Code deals with the Bucket Shop Law in California. Chapter 1 provides definitions. Section 29000 provides that the definitions set forth in this chapter govern the construction of this division.

Section 29001 defines the term “person.”

Section 29002 defines the terms “trustee” and “trust.”

Section 29003 defines the term “contract.”

Section 29004 defines the term “securities.”

Section 29005 defines the term “commodities.”

Section 29006 defines the term “bucket shop.”

Section 29007 defines the term “keeper.”

Section 29008 defines the terms “bucketing” and “bucket shopping.”

Chapter 2 deals with prohibited activities. Section 29110 provides that any person who makes or offers to make any contract constituting bucketing, or who makes any sale constituting bucketing, or who is the keeper of any bucket shop, is guilty of a felony.

Section 29101 states that any person who communicates, receives, exhibits, or displays in any manner any statement of quotations of prices of any securities or commodities, with an intent to make, or to offer to make, or to aid in making or offering to make, any contract constituting bucketing is guilty of a felony.

Section 29102 states that the felonies specified in this chapter are punishable, for each offense, if the offender is a corporation, by a fine of not less than $1,000 nor more than $10,000 or, if the offender is not a corporation, by imprisonment under the Penal Code.

Section 29103 prohibits the prosecution, conviction, and punishment of a corporation under any provision of this chapter from being deemed to be a prosecution, conviction, or punishment of any of its officers, directors, or shareholders.

Section 29104 provides that all contracts for the purchase or sale of shares of the capital stock of any corporation or association without any intention on the part of one party to deliver and of the other party to receive the shares, and contemplating merely the payment of differences between the contract and market prices on divers days, is void.

Section 29105 makes it unlawful for any person to knowingly alter, destroy, mutilate, conceal, cover up, falsify, or make a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the administration or enforcement of this division.

Chapter 3 deals with required records and statements. Section 29200 provides that every person doing business as a broker or making contracts as a broker or agent for the purchase or sale of any securities or commodities on any board of trade or exchange must keep or cause to be kept at their office or place of business correct and permanent records or books of account showing each of such transactions as a separate item.

Section 29201 requires every person to furnish to any customer or principal for whom he has executed any order for the actual purchase or sale of any securities or commodities on any board of trade or exchange, either for immediate or future delivery, a written statement showing the name of the person from whom the property was bought or to whom it was sold, as the case may be, and the time when, place where, and the price at which it was either bought or sold.