---
kind: "section"
citation: "12 C.F.R. § 16.32"
title: "12"
number: "16.32"
heading: "Fraudulent transactions and unsafe or unsound practices."
url: "https://uscodex.org/cfr/12/16.32"
---

# §16.32. Fraudulent transactions and unsafe or unsound practices.

- (a) No person in the offer or sale of national bank or Federal savings association securities shall directly or indirectly:
  - (1) Employ any device, scheme or artifice to defraud;
  - (2) Make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or
  - (3) Engage in any act, practice, or course of business which operates as a fraud or deceit upon any person, in connection with the purchase or sale of any security of a national bank or Federal savings association.
- (b) Nothing in this section limits the applicability of section 17 of the Securities Act ([15 U.S.C. 77q](/usc/15/77q.md)) or section 10(b) of the Exchange Act ([15 U.S.C. 78j](/usc/15/78j.md)) or [Rule 10b-5](/cfr/12/10b-5.md) promulgated thereunder ([17 CFR 240.10b-5](/cfr/17/240.10b-5.md)).
- (c) Any violation of this section also constitutes an unsafe or unsound practice under [12 U.S.C. 1818](/usc/12/1818.md).
- (d) SEC [Rule 175](/cfr/12/175.md) ([17 CFR 230.175](/cfr/17/230.175.md)—Liability for certain statements by issuers) applies to this part.

## Notes

### Amendments

[59 FR 54798, Nov. 2, 1994, as amended at 82 FR 8109, Jan. 23, 2017]

### Authority

Authority: 12 U.S.C. 1 et seq., 93a, 1462a, 1463, 1464, and 5412(b)(2)(B).

### Source

Source: 59 FR 54798, Nov. 2, 1994, unless otherwise noted.

### Amendments

[59 FR 54798, Nov. 2, 1994, as amended at 82 FR 8109, Jan. 23, 2017]