KRS 304.6-030: Use of "wash" transactions -- Penalty.

(1) Any member, officer, director, employee, or attorney in fact of any company,

association, or exchange licensed to do an insurance business in this state, who on

behalf of such company, association, or exchange, borrows, rents, hires, leases, or

otherwise e ngages the use of stocks, bonds, debentures, notes, investment

certificates, securities, or other obligations or evidences of indebtedness owned or

issued by any other corporation, company, association, or individual, or of any

government, political subdivision, or agency thereof, with intent to injure or defraud

any other company, body politic, or corporation, or person, or to deceive the

commissioner or other person legally authorized to examine the affairs of any such

company, association, or exchange, is guilty of a Class D felony.

(2) Any individual that aids and abets such insurance company, association, or

exchange in borrowing, renting, hiring, leasing, or engaging the use of such stocks,

bonds, debentures, notes, investment certificates, securities, or other obligations or

evidences of indebtedness, is guilty of a Class D felony.

(3) If any insurance company, association, or exchange is found in possession of stocks,

bonds, debentures, notes, investment certificates, securities, or other obligations or

evidences of indebtedness acquired in violation of subsection (1) of this section, or

if any of its officers, directors, members, or attorneys in fact have been convicted

under subsection (1) of this section, the company, association, or exchange may be

subject to suspension of its certificate of authority by the commissioner. Nothing in

this section shall be construed to prevent the commissioner from commencing

delinquency proceedings under this code.