Consequences of Non-Compliance

Failure to comply with registration requirements or an eligible exemption can have many consequences for an issuer.

First of all, issuer is liable for failure to comply pursuant to NMSA 58-13C-509.

Additionally, failure to comply with securities laws in an offering may hamper any future capital formation attempts because the past error has to be corrected, usually through a rescission offer, and/or because of the requirement to disclose the liability arising from the original non- compliance.

Failure to comply is illegal and is subject to an action by the Securities Director and other state and/or federal authorities. NMSA 58-13C-508, NMSA 58-13C-603, NMSA 58-13C-604.

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