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Davie, Florida, 33314
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Securities Law
FEDERAL SECURITIES LAW
 - Securities Act of 1933
 - Securities Act of 1934
    - Rules Promulgated under
      the Securities Act of 1934

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Selected Sections of the

New Mexico Securities Act

 

Sections included on this page:

______________________________________________________________________

SHORT TITLE

Chapter 58, Article 13B NMSA 1978 may be cited as the "New Mexico Securities Act of 1986".   

DEFINITIONS

As used in the New Mexico Securities Act of 1986 [ 58-13B-1 NMSA 1978]:   
A.     "affiliate" means a person who directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with another person;   
B.     "broker-dealer" means a person engaged in the business of effecting transactions in securities for the account of others or for the person's own account. Broker-dealer does not include:   
(1)     a sales representative;   
(2)     an issuer, except when effecting transactions other than with respect to its own securities;   
(3)     a depository institution when acting on its own account or when exercising trust or fiduciary powers permitted for a depository institution pursuant to applicable state or federal laws and regulations providing for the organization, operation, supervision and examination of the depository institution; or   
(4)     any other person as the director by rule or order designates;   
C.     "control person" means an officer, director, managing partner or trustee, manager of a limited liability company or person of similar status or function or any security holder who owns beneficially or of record ten percent or more of any class of securities of an issuer;   
D.     "depository institution":   
(1)     means:   
(a)     a person that is organized, chartered or holding an authorization certificate under the laws of a state or of the United States that authorizes the person to receive deposits, including a savings, share, certificate or deposit account, is regulated, supervised and examined for the protection of depositors by an official or agency of a state or the United States and is insured by the federal depository insurance corporation, the federal savings and loan insurance corporation or the national credit union share insurance fund; and   
(b)     a trust company or other institution that is authorized by federal or state law to exercise fiduciary powers of the type a national bank is permitted to exercise under the authority of the comptroller of the currency and is regulated, supervised and examined by an official or agency of a state or the United States; and   
(2)     does not include an insurance company or other organization primarily engaged in the insurance business or a Morris plan bank, industrial loan company or a similar bank or company;   
E.     "director" means the director of the securities division of the regulation and licensing department;   
F.     "division" means the securities division of the regulation and licensing department;   
G.     "federal covered security" means any security described as a "covered security" in the federal Securities Act of 1933;   
H.     "filed" means the receipt of a document or application by the director or by the authorized representative of the director at the principal office of the director;   
I.     "financial or institutional investor" means any of the following, whether acting for itself or others in a fiduciary capacity, other than as an agent:   
(1)     a depository institution;   
(2)     an insurance company;   
(3)     a separate account of an insurance company;   
(4)     an investment company as defined in the Investment Company Act of 1940;   
(5)     an employee pension, profit-sharing or benefit plan, if:   
(a)     the plan has total assets in excess of five million dollars ($5,000,000); or   
(b)     investment decisions are made by a plan fiduciary, as defined in the Employee Retirement Income Security Act of 1974, that is either a broker-dealer registered under the Securities Exchange Act of 1934, an investment adviser registered or exempt from registration under the Investment Advisers Act of 1940, a depository institution or an insurance company;   
(6)     a business development company as defined by the Investment Company Act of 1940;   
(7)     a small business investment company licensed by the United States small business administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; or   
(8)     any other financial or institutional investor as the director by rule or order designates;   
J.     "fraud", "deceit" and "defraud" are not limited to common-law fraud or deceit;   
K.     "guaranteed" means guaranteed as to payment of principal, interest and dividends;   
L.     "insured" means insured as to payment of principal, interest and dividends;   
M.     "investment adviser":   
(1)     means a person who, for compensation, engages in the business of advising others as to the value of securities or as to the advisability of investing in, purchasing or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities; and   
(2)     does not include:   
(a)     an investment adviser representative;   
(b)     a depository institution when acting on its own account or when exercising trust or fiduciary powers permitted for such depository institutions under applicable state or federal laws and regulations providing for the organization, operation, supervision and examination of such depository institution;   
(c)     a lawyer, accountant, engineer or teacher whose performance of these services is solely incidental to the practice of the person's profession;   
(d)     a broker-dealer whose performance of the investment advisory services is solely incidental to the conduct of business as a broker-dealer and who receives no special compensation for the investment advisory services;   
(e)     a publisher, employee or columnist of a newspaper, news magazine or business or financial publication, or an owner, operator, producer or employee of a cable, radio or television network, station or production facility if, in either case, the financial or business news published or disseminated is made available to the general public and the content does not consist of rendering advice on the basis of the specific investment situation of each client; or   
(f)     any other person as the director by rule or order designates;   
N.     "investment adviser representative" means:   
(1)     with respect to an investment adviser that is registered or required to register pursuant to the New Mexico Securities Act of 1986 [ 58-13B-1 NMSA 1978], a natural person other than an investment adviser who, whether as an employee or in the form of a professional corporation is under the direct supervision of an investment adviser and engages in the business of advising others as to the value of securities or about the advisability of investing in, purchasing or selling securities, or who, for compensation and as part of a regular business, issues or promulgates analyses or reports concerning securities; or   
(2)     with respect to an investment adviser registered with the United States securities and exchange commission, an "investment adviser representative" who has a "place of business" in the state as those terms are defined by rule pursuant to Section 203 of the Investment Advisers Act of 1940;   
O.     "issuer" means a person that issues or proposes to issue a security, except that:   
(1)     in respect to the issuer of a collateral trust certificate, voting trust certificate, certificate of deposit for a security or share in an investment company without a board of directors or persons performing similar functions, "issuer" means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which the security is issued;   
(2)     in respect to the issuer of an equipment trust certificate, including a conditional sales contract, or similar security serving the same purpose, "issuer" means the person to whom the equipment or property is or is to be leased or conditionally sold; and   
(3)     in respect to the issuer of an interest in oil, gas or other mineral rights "issuer" means the owner of an interest in such a right, whether whole or fractional, who creates interests for the purposes of sale;   
P.     "non-issuer transaction" means a transaction not directly or indirectly for the benefit of the issuer;   
Q.     "person" means a legal entity;   
R.     "price amendment" means the amendment to a registration statement filed under the Securities Act of 1933 or, if no amendment is filed, the prospectus or prospectus supplement filed under the Securities Act of 1933, that includes a statement of the offering price, underwriting and selling discounts or commissions, amount of proceeds, conversion rates, call prices and other matters dependent upon the offering price;   
S.     "promoter" includes:   
(1)     a person who, acting alone or in concert with one or more other persons, takes the entrepreneurial initiative in founding or organizing the business or enterprise of an issuer;   
(2)     an officer or director or person of similar status or function owning any securities of an issuer or any security holder who owns, beneficially or of record, ten percent or more of any class of securities of the issuer if the officer, director, person of similar status or security holder acquires any of those securities in a transaction which does not possess the indicia of arm's-length bargaining or which is otherwise unfair to the issuer; or   
(3)     a member of the immediate family of a person described in Paragraph (1) or (2) of this subsection if the family member received the securities in a transaction that does not possess the indicia of arm's-length bargaining or which is otherwise unfair to the issuer;   
T.     the following words and phrases have the indicated meanings:   
(1)     "sale" or "sell" includes every contract of sale, contract to sell or other disposition of a security or interest in a security for value;   
(2)     "offer to sell" includes every attempt or offer to dispose of, or solicitation of an offer to purchase, a security or interest in a security for value;   
(3)     "offer to purchase" includes every attempt or offer to obtain, or solicitation of an offer to sell, a security or interest in a security for value;   
(4)     a security given or delivered with, or as a bonus on account of, a purchase of securities or other item is considered to constitute part of the subject of the purchase and to have been offered and sold for value;   
(5)     a gift of assessable stock is deemed to involve an offer and sale; and   
(6)     a sale or offer of a warrant or right to purchase or subscribe to another security of the same or another issuer, or a sale or offer of a security that gives the holder a present or future right or privilege to convert into another security of the same or another issuer, is deemed to include an offer of the other security;   
U.     the terms defined in Subsection T of this section do not include the creation of security interest or a loan of a security; a stock dividend, whether the corporation distributing the dividend is the issuer of the stock or not, if nothing of value is given by stockholders for the dividend other than the surrender of a right to a cash or property dividend and each stockholder may elect to take the dividend in cash, property or stock; or an act incident to a judicially approved reorganization in which a security is issued in exchange for one or more outstanding securities, claims or property interests, or partly in exchange and partly for cash, but the terms contained in this subsection are within the meaning of Subsection T of this section for the purpose of Section 58-13B-30 NMSA 1978;   
V.     "sales representative" means an individual other than a broker-dealer, whether as an employee or in the form of a professional corporation, authorized to act and acting for a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities. A partner, officer or director of a broker-dealer or issuer, or a person occupying a similar status or performing similar functions, is a sales representative only if that person otherwise comes within the definition;   
W.     "Securities Act of 1933", "Securities Exchange Act of 1934", "Public Utility Holding Company Act of 1935", "Investment Company Act of 1940", "Investment Advisers Act of 1940", "Employee Retirement Income Security Act of 1974", "National Housing Act" and "Commodity Exchange Act" mean the federal statutes of those names as amended before or after the effective date of the New Mexico Securities Act of 1986 [ 58-13B-1 NMSA 1978];   
X.     unless the context requires otherwise, "security" means a note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; any limited partnership interest; any interest in a limited liability company; collateral-trust certificate; preorganization certificate or subscription; transferable share; investment contract; voting-trust certificate; certificate of deposit for a security; any interest in oil, gas or other mineral rights; any put, call, straddle or option entered into on a national securities exchange relating to foreign currency; any put, call, straddle or option on any security, certificate of deposit or group or index of securities, including any interest therein or based on the value thereof; or, in general, any interest or instrument commonly known as a security or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of or warrant or right to subscribe to or purchase any of the foregoing. "Security" does not include landowner royalties in the production of oil, gas or other minerals created through the execution of a lease of the lessor's mineral interest;   
Y.     "self-regulatory organization" means a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, a national securities association of brokers and dealers registered under Section 15A of the Securities Exchange Act of 1934, a clearing agency registered under Section 17A of that act and the municipal securities rulemaking board established under Section 15B(b)(1) of that act;   
Z.     "state" means a state, commonwealth, territory or possession of the United States, the District of Columbia and the commonwealth of Puerto Rico; and   
AA.     "underwriter" means any person who has purchased from an issuer with the intent to offer or sell a security or to distribute any security, or participates or has a direct or indirect participation in any [sic] the undertaking, or participates or has a participation in the direct or indirect underwriting of any [sic] the undertaking; but the term does not include a person whose interest is limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commission. As used in this subsection, the term "issuer" includes, in addition to an issuer, any person directly or indirectly controlling or controlled by the issuer, or any person under direct or indirect common control with the issuer.   

OFFERS, SALES AND PURCHASES

In connection with the offer to sell, sale, offer to purchase or purchase of a security, a person shall not, directly or indirectly:   

  • employ any device, scheme or artifice to defraud;   
  • make an untrue statement of a material fact or fail to state a necessary material fact where such an omission would be misleading; or
  •    
  • Engage in an act, practice or course of business which operates or would operate as a fraud or deceit upon a person.  

MARKET MANIPULATIONS

Without limiting the general applicability of Section 30 [ 58-13B-30 NMSA 1978] of the New Mexico Securities Act of 1986, a person shall not, directly or indirectly:   
A.     quote a fictitious price with respect to a security;   
B.     effect a transaction in a security which involves no change in the beneficial ownership of the security for the purpose of creating a false or misleading appearance of active trading in a security or with respect to the market for the security;   
C.     enter an order for the purchase of a security with the knowledge that an order of substantially the same size and at substantially the same time and price, for the sale of the security has been or will be entered by or for the same or affiliated person for the purpose of creating a false or misleading appearance of active trading in a security or with respect to the market for the security;   
D.     enter an order for the sale of a security with knowledge that an order of substantially the same size and at substantially the same time and price for the purchase of the security has been or will be entered by or for the same or affiliated person for the purpose of creating a false or misleading appearance of active trading in a security or with respect to the market for the security;   
E.     effect, alone or with one or more other persons, a series of transactions in a security to:   
(1)     create active trading, actual or apparent, in that security; or   
(2)     raise or depress the price of the security, in each case for the purpose of inducing the purchase or sale of that security or of other securities of the same or another issuer by others; or   
F.     employ any other deceptive or fraudulent device, scheme or artifice to manipulate the market in a security.   

INSIDE INFORMATION

It is unlawful for an issuer or any person who is an officer, director or affiliate of an issuer or any other person whose relationship to the issuer gives him access, directly or indirectly, to material information about the issuer not generally available to the public, to purchase or sell any security of the issuer in this state at a time when he knows material information about the issuer gained from such relationship, which information:   
A.     would significantly affect the market price of that security;   
B.     is not generally available to the public; and   
C.     is not intended to be available to the public unless he has reason to believe and believes that the person selling to or buying from him is also in possession of the information.   
Provided that activities permitted under the Securities Exchange Act of 1934, its rules and regulations shall not constitute a violation of this section.   

PROHIBITED TRANSACTIONS BY INVESTMENT ADVISERS AND INVESTMENT ADVISER REPRESENTATIVES

A.     It is unlawful for an investment adviser or an investment adviser representative to, directly or indirectly:   
(1)     employ a device, scheme or artifice to defraud a client; or   
(2)     engage in an act, practice or course of business that operates or would operate as a fraud or deceit upon a client.   
B.     It is unlawful for any investment adviser or investment adviser representative to enter into, extend or renew any written investment advisory contract unless it provides that:   
(1)     no share of capital gain upon or capital appreciation of the funds or portion of the funds of the client shall be used as a basis for the determination of the compensation of the investment adviser;   
(2)     no assignment of the contract may be made by the investment adviser without the consent of the other party to the contract; and   
(3)     the investment adviser, if a partnership, shall notify the other party to the contract of any change in the membership of the partnership within a reasonable time after the change.   
C.     Paragraph (1) of Subsection B of this section does not:   
(1)     apply to investment advisers registered pursuant to Section 203 of the Investment Advisers Act of 1940 or exempt from registration pursuant to Section 202(a)(11) of that act; or   
(2)     prohibit an investment advisory contract which provides for compensation based upon the total value of a fund averaged over a definite period or as of definite dates or taken as of a definite date. As used in Paragraph (2) of Subsection B of this section, "assignment" includes any direct or indirect transfer or hypothecation of an investment advisory contract by the assignor or of a controlling block of the assignor's outstanding voting securities by a security holder of the assignor; but if the investment adviser is a partnership, no assignment of an investment advisory contract is considered to result from the death or withdrawal of a minority of the members of the investment adviser having only a minority interest in the business of the investment adviser, or from the admission to the investment adviser of one or more members who, after admission, will be only a minority of the members and will have only a minority interest in the business.   

 MISLEADING FILINGS

No person may make or cause to be made, in a document filed with the director or in a proceeding under the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978], a statement that the person knows or has reasonable grounds to know is, at the time and in the light of the circumstances under which it is made, false or misleading in a material respect.   

UNLAWFUL REPRESENTATIONS CONCERNING LICENSING, REGISTRATION OR EXEMPTION

A.     Neither the fact that an application for licensing or a registration statement has been filed under the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] nor the fact that a person is licensed or a security is registered under that act constitutes a finding by the director that any document filed under that act is true, complete and not misleading. Neither of those facts nor the fact that an exemption or exception is available for a security or a transaction means that the director has passed upon the merits or qualifications of, or recommended or given approval to, any person, security or transaction.   
B.     It is unlawful to make, or cause to be made, to a purchaser, customer or client, a representation inconsistent with Subsection A of this section.   

INVESTIGATIONS; SUBPOENA POWER

A.     The director may make any public or private investigation, within or without this state, as he finds necessary to determine whether a person has violated or is about to violate the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] or any rule or order of the director under that act or to aid in enforcement of that act or in the rules under that act.   
B.     The director may publish information concerning a violation of the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] or a rule or order of the director under that act or concerning types of securities or acts or practices in the offer, sale or purchase of types of securities which may operate as a fraud or deceit.   
C.     For purposes of an investigation or proceeding under the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978], the director or any officer or employee designated by the director by rule or order may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence and require the production, by subpoena or otherwise, of books, papers, correspondence, memoranda, agreements or other documents or records which the director determines to be relevant or material to the investigation or proceeding.   
D.     The director may require or permit a person to file a statement, under oath or otherwise as the director determines, as to the facts and circumstances concerning the matter to be investigated.   
E.     The director may issue and apply to enforce subpoenas in this state at the request of a securities agency or administrator of another state if the activities constituting an alleged violation for which the information is sought would be a violation of the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] if the activities had occurred in this state.   
F.     If a person does not testify or produce the documents required by the director or a designated officer or employee pursuant to subpoena, the director or designated officer or employee may apply to the court for an order compelling compliance. A request for order of compliance may be addressed to either:   
(1)     the district court located in Santa Fe county or the district court in the county where service may be obtained on the person refusing to testify or produce, if the person is subject to service of process by this state; or   
(2)     a court of another state having jurisdiction over the person refusing to testify or produce, if the person is not subject to service of process in this state.   
G.     Not later than the time the director requests an order for compliance, the director shall either send notice of the request by registered or certified mail, return receipt requested, to the respondent at the last known address or take other steps which are reasonably calculated to give the respondent actual notice.   

ENFORCEMENT

A.     If the director reasonably believes, whether or not based upon an investigation conducted under Section 58-13B-36 NMSA 1978, that any person has engaged, is engaging or is about to engage in any act or practice constituting a violation of any provision of the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] or any rule or order under that act, the director may, subject to the right of that person to obtain a subsequent hearing pursuant to Section 58-13B-53 NMSA 1978, in addition to any specific powers granted under that act, issue a cease and desist order, without a prior hearing, against the person engaged in the prohibited activities, directing him to desist and refrain from further illegal activity.   
B.     When it appears to the director, whether or not based upon an investigation conducted under Section 58-13B-36 NMSA 1978, that a person has violated the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] or a rule or order of the director under that act, the director, in addition to any specific power granted under that act, may, after notice and hearing in an administrative proceeding unless the right to notice and hearing is waived by the person against whom the sanction is imposed:   
(1)     issue a cease and desist order against the person;   
(2)     censure the person if that person is a licensed broker-dealer, sales representative, investment adviser or investment adviser representative;   
(3)     bar or suspend that person from association with a licensed broker-dealer or investment adviser in this state;   
(4)     issue an order against an applicant, licensed person or other person who violates that act, imposing a civil penalty up to a maximum of five thousand dollars ($5,000) for each violation; or   
(5)     initiate one or more of the actions specified in Section 58-13B-38 NMSA 1978 as applicable.   
C.     For purposes of determining the amount of civil penalty imposed pursuant to Paragraph (4) of Subsection B of this section, the director shall consider, among other factors, the frequency and persistence of the conduct constituting a violation of the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] or a rule or order of the director under that act, the number of persons adversely affected by the conduct and the resources of the person committing the violation.   

POWER OF COURT TO GRANT RELIEF

A.     Upon a showing by the director that a person has violated or is about to violate the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] or any rule or order of the director under that act, the district court of Santa Fe county or other appropriate district court in the state may grant or impose one or more of the following appropriate legal or equitable remedies:   
(1)     a temporary restraining order, permanent or temporary prohibitory or mandatory injunction or a writ of prohibition or mandamus;   
(2)     a civil penalty up to a maximum of five thousand dollars ($5,000) for each violation;   
(3)     disgorgement;   
(4)     declaratory judgment;   
(5)     restitution to investors;   
(6)     the appointment of a receiver or conservator for the defendant or the defendant's assets;   
(7)     recovery by the director of all costs and expenses for conducting an investigation or the bringing of any enforcement action under that act; or   
(8)     other relief as the court deems just.   
B.     Upon a showing that the defendant is about to violate the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] or a rule or order of the director under that act, a court may issue:   
(1)     a temporary restraining order;   
(2)     a temporary or permanent injunction;   
(3)     a writ of prohibition or mandamus; or   
(4)     an order for costs and expenses.   
C.     In determining the appropriate relief to grant, the court shall consider enforcement actions taken and sanctions imposed by the director under Section 58-13B-36 NMSA 1978 in connection with the transactions constituting violations of the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978].   
D.     The court shall not require the director to post a bond in an action under this section.   
E.     Upon a showing by the administrator or securities agency of another state that a person has violated the securities act of that state or a rule or order of the administrator or securities agency of that state, the district court of Santa Fe county or other appropriate district court may grant, in addition to any other legal or equitable remedies, one or more of the following remedies:   
(1)     appointment of a receiver, conservator or ancillary receiver or conservator for the defendant or the defendant's assets located in this state; or   
(2)     other relief as the court deems just.   

CRIMINAL PENALTIES

A.     A person who willfully violates a provision of the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] or a rule or order under that act is guilty of a third degree felony and may, upon conviction, be fined not more than five thousand dollars ($5,000) or imprisoned not more than three years or both for each violation.   
B.     The director may refer such evidence as is available concerning violations of the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] or any rule or order under that act to the attorney general or the proper district attorney, who may, with or without such a reference from the director, institute the appropriate criminal proceedings.   
C.     The attorney general or district attorney may request assistance from the director or employees of the division.   
D.     No indictment or information may be brought under this section more than five years after the alleged violation.   
E.     Nothing in the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] limits the power of the state to punish a person for conduct which constitutes a crime under other law.   

CIVIL LIABILITY

A.     A person who, in connection with the offer or sale of a security, violates Subsection A of Section 58-13B-3, Subsection A of Section 58-13B-5, Section 58-13B-20, Subsections K and L [Subsections J and K] of Section 58-13B-24, Section 58-13B-30, Section 58-13B-32, Section 58-13B-33, Subsection B of Section 58-13B-35 NMSA 1978 or of a condition imposed under Subsection H, I or J [Subsections G, H or I] of Section 58-13B-24 NMSA 1978 or any rule of the director relating to any of those sections is liable to the person purchasing the security, except that no such liability will exist in the case of failure to file any notice of claim of exemption pursuant to Subsection K of Section 58-13B-27 NMSA 1978.  Upon tender of the security, the purchaser shall recover the consideration paid for the security and interest at the legal rate of this state from the date of payment, costs and reasonable attorneys' fees, less the amount of income received on the security.  If the purchaser no longer owns the security, he shall recover damages.  Damages are the amount that would be recoverable upon a tender less the value of the security when the purchaser disposed of it and interest at the legal rate of this state from the date of disposition of the security.  Tender requires only notice of willingness to exchange the security for the amount specified.   
B.     A person who offers or sells a security in violation of Subsection B of Section 58-13B-30 NMSA 1978 is not liable under Subsection A of this section if the purchaser knew that a statement of a material fact was untrue or that there was an omission of a statement of a material fact.   
C.     Any person who purchases a security in violation of Section 58-13B-30, 58-13B-32 or 58-13B-33 NMSA 1978 is liable to the person selling the security. The person selling the security may sue to recover the security, plus any income received by the purchaser on the security upon tender of the consideration received, costs and reasonable attorneys' fees, or for damages if the purchaser no longer owns the security.  Damages are the excess of the value of the security when the purchaser acquired it or disposed of it, whichever is greater, over the consideration paid for the security, plus interest at the legal rate from the date of disposition.  Tender requires only notice of willingness to pay the amount specified in exchange for the security.   
D.     A person who purchases a security in violation of Subsection B of Section 58-13B-30 NMSA 1978 is not liable under Subsection C of this section if the seller knew that a statement of a material fact was untrue or that there was an omission of a statement of a material fact.   
E.     A person who willfully participates in any act or transaction in violation of Section 58-13B-31 NMSA 1978 is liable to a person who purchases or sells a security, at a price that was affected by the act or transaction for the damages sustained as a result of the act or transaction.  Damages are the difference between the price at which the securities were purchased or sold and the market value the securities would have had at the time of the person's purchases or sale in the absence of the act or transaction, plus interest at the legal rate of this state from the date of the act or transaction and reasonable attorneys' fees.   
F.     A person who directly or indirectly controls another person who is liable under Subsection A, B, C, D or E of this section, a partner, officer or director of the person liable, a person occupying a similar status or performing similar functions, any agent of the person liable, an employee of the person liable if the employee materially aids in the act, omission or transaction constituting the violation and a broker-dealer or sales representative who materially aids in the act, omission or transaction constituting the violation, are also liable jointly and severally with and to the same extent as the other person, but it is a defense that they did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by which the liability exists. Contribution among the several persons liable is the same as in cases arising out of breach of contract.   
G.     The legal rate of interest as used in the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] shall be the rate set by Subsection A of Section 56-8-4 NMSA 1978 or its successor statutes.   
H.     In any action brought pursuant to the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978], other than one brought by the state of New Mexico, if it appears to the court that the suit was groundless or brought for purposes of harassment, the plaintiffs may be liable for court costs and reasonable attorneys' fees incurred by the defendant.   

CIVIL STATUTE OF LIMITATIONS

No person may sue under Section 40 [ 58-13B-40 NMSA 1978] of the New Mexico Securities Act of 1986 unless suit is brought:   
A.     within two years after the discovery of the violation or after discovery should have been made by the exercise of reasonable diligence; and   
B.     within five years after the act or transaction constituting the violation.   

RESCISSION AND SETTLEMENT OFFERS

A.     No purchaser may commence an action under Subsection A of Section 40 [ 58-13B-40 NMSA 1978] of the New Mexico Securities Act of 1986 if, before suit is commenced, the purchaser:   
(1)     receives a written offer:   
(a)     stating the respect in which liability under Section 40 of that act may have arisen and fairly advising the purchaser of the purchaser's rights of rescission;   
(b)     if the basis for relief under Subsection A of Section 40 of that act is a violation of Subsection B of Section 30 [ 58-13B-30 NMSA 1978] of that act, including financial and other information necessary to correct all material misstatements or omissions in the information which was required by that act to be furnished to the purchaser as of the time of the sale of the security to the purchaser;   
(c)     offering to repurchase the security for cash, payable on delivery of the security, equal to the consideration paid, plus interest at the legal rate of this state from the date of payment, less income received thereon, or, if the purchaser no longer owns the security, offering to pay the purchaser upon acceptance of the offer an amount in cash equal to the damages computed under Subsection A of Section 40 of that act plus attorneys' fees; and   
(d)     stating that the offer may be accepted by the purchaser at any time within a specified period of not less than thirty days after the date of its receipt by the purchaser or such shorter or longer time as the director by order prescribes; and   
(2)     fails to accept the offer in writing within the period specified under Subparagraph (d) of Paragraph (1) of this subsection.   
B.     No seller may commence an action under Subsection C of Section 40 of the New Mexico Securities Act of 1986 if, before suit is commenced, the seller receives a written offer:   
(1)     stating the respect in which liability under Section 40 of that act may have arisen and fairly advising the seller of the seller's rights of rescission;   
(2)     offering to return the security, plus the amount of any income received thereon, upon payment of the consideration received, or if the purchaser no longer owns the security, offering to pay the seller upon acceptance of the offer an amount in cash equal to the damages computed in accordance with Subsection C of Section 40 of that act plus attorneys' fees; and   
(3)     providing that the offer may be accepted by the seller at any time within a specified period of not less than thirty days after the date of its receipt by the seller or such shorter or longer time as the director by order may prescribe, and the seller has failed to accept the offer in writing within the specified period.   
C.     The director by rule may prescribe the form in which the information specified in Subsections A and B of this section must be contained in any offer made pursuant to those subsections.   
D.     Every offer under Subsection A or B of this section shall be delivered to the offeree or sent in a manner which assures actual receipt by the offeree.   
E.     If, after acceptance, a rescission offer is not performed in accordance with either its terms or this section, the offeree may obtain relief under Section 40 [ 58-13B-40 NMSA 1978] of the New Mexico Securities Act of 1986 without regard to this section.   

GENERAL LIABILITY PROVISIONS

A.     Except as provided in Section 42 [ 58-13B-42 NMSA 1978] of the New Mexico Securities Act of 1986, a tender required under that act may be made before entry of judgment.   
B.     The rights and remedies provided by the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] are in addition to any other rights or remedies that may exist at law or in equity, but that act does not create any claim for relief not specified in Part VI [ 58-13B-36 to 58-13B-43 NMSA 1978] of that act.   

C.     A claim for relief under the New Mexico Securities Act of 1986 [Chapter 58, Article 13B NMSA 1978] survives the death of a person who might have obtained relief as a plaintiff or defendant.

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The above is not the complete act. This page contains only certain sections of the statute which we believe you may find informative. We do not and cannot guarantee the above sections are current law in this state. Legislatures may enact revised statutes at any time. Moreover these sections are presented for informational purposes only and are presented “as is” with all faults and with no warranties or guarantees as to the accuracy. Further, The content on these pages are not offered or intended to be legal advice by this firm for any purpose or manner whatsoever. If you require the current and complete version of the Law in your state, you should visit the Legislature home page of the particular state for more information or contact an attorney for advice on obtaining such information.

 
 
 
 

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