## Facts

- Investors bought interests in oil-and-gas limited partnerships marketed through written prospectuses and investor meetings.
- Gary Colip, an attorney, was retained to incorporate and represent a corporation serving as the general partner for the partnerships.
- Colip drafted the prospectus used to solicit investors.
- Colip attended some meetings with prospective investors and answered legal questions about the prospectus.
- The investors sued under the Indiana Securities Act, alleging the prospectuses contained material misstatements or omissions.
- The investors amended their complaints to allege Colip acted in concert with other defendants in preparing misleading prospectuses and that he effectuated or attempted to effect sales of securities.
- The trial court granted Colip summary judgment, concluding he was not an “agent” under the Act.
- The intermediate appellate court reversed; the state supreme court accepted review.

## Issues

1. Whether an attorney who drafts a prospectus and attends investor meetings can qualify as an “agent” of an issuer under the Indiana Securities Act.
2. What level of attorney conduct constitutes “effecting or attempting to effect” a securities sale and “materially aiding” the transaction for statutory civil liability.
3. Whether the summary-judgment record created a triable issue that Colip engaged in sales-related conduct beyond ordinary legal representation.

## Decision

- The Indiana Supreme Court vacated the intermediate appellate decision and affirmed summary judgment for Colip.
- The court held an attorney may be an “agent” under the Act if, in connection with investor solicitation, the attorney’s actions or omissions materially aid the sale by making it very likely an investor will purchase the security.
- The court concluded that drafting offering materials and providing legal services, without evidence of solicitation or sales performance, does not meet the statutory definition of “agent.”
- On the undisputed record, Colip’s activities were legal in nature and did not show that he effected or attempted to effect sales; therefore, he was not liable as an agent.

## Legal Principles

- Statutory “agent” status turns on function: whether the person represents the issuer in effecting or attempting to effect purchases or sales of securities.
- “Simple legal representation,” including drafting a prospectus and advising on compliance, does not by itself constitute effecting or attempting to effect a sale.
- An attorney who participates in investor meetings can be liable as an agent only when the attorney engages in solicitation or other sales-oriented conduct, including materially misleading statements or omissions, that materially aid the sale.
- “Material aid” requires more than background services; the conduct must have a meaningful connection to the investor’s decision to purchase.

## Conclusion

An attorney connected to a securities offering may face statutory “agent” liability only when the attorney’s conduct moves from legal services to sales-related activity that materially aids a transaction; because the record showed only drafting and legal responses at meetings, summary judgment for the attorney was affirmed.


Johnson v. Colip, 658 N.E.2d 575 (Ind. 1995)