Source: http://www.rld.state.nm.us/securities-division/nmsa-58-13c-article-5.aspx
Timestamp: 2017-03-25 00:06:29
Document Index: 59250391

Matched Legal Cases: ['§ 501', '§ 502', '§ 503', '§ 504', '§ 505', '§ 506', '§ 507', '§ 508', '§ 509', '§ 510']

Fraud and Liabilities Section
58-13C-501 Securities fraud.
58-13C-502 Prohibited conduct in providing investment advice.
58-13C-503 Evidentiary burden.
58-13C-504 Filing of sales and advertising literature.
58-13C-505 Misleading filings.
58-13C-506 Misrepresentations concerning registration or exemption.
58-13C-507 Qualified immunity.
58-13C-508 Criminal penalties.
58-13C-509 Civil liability.
58-13C-510 Rescission offers.
58-13C-501. Securities fraud. (2009) It is unlawful for a person, in connection with the offer, sale or purchase of a security, directly or indirectly:
A. to employ a device, scheme or artifice to defraud;
B. to make an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statement made, in the light of the circumstances pursuant to which it is made, not misleading; or
C. to engage in an act, practice or course of business that operates or would operate as a fraud or deceit upon another person.
History: Laws 2009, ch. 82, § 501.
58-13C-502. Prohibited conduct in providing investment advice. (2009) A. It is unlawful for a person that advises others for compensation, either directly or indirectly or through publications or writings, as to the value of securities or the advisability of investing in, purchasing or selling securities or that, for compensation and as part of a regular business, issues or promulgates analyses or reports relating to securities:
(1) to employ a device, scheme or artifice to defraud another person; or
(2) to engage in an act, practice or course of business that operates or would operate as a fraud or deceit upon another person.
B. A rule adopted pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978] may define an act, practice or course of business of an investment adviser or an investment adviser representative as fraudulent, deceptive or manipulative and may prescribe means reasonably designed to prevent investment advisers and investment adviser representatives from engaging in acts, practices and courses of business defined as fraudulent, deceptive or manipulative.
C. A rule adopted pursuant to the New Mexico Uniform Securities Act may specify the contents of an investment advisory contract entered into, extended or renewed by an investment adviser.
History: Laws 2009, ch. 82, § 502.
58-13C-503. Evidentiary burden. (2009) A. In a civil action or administrative proceeding pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978], a person claiming an exemption, exception, preemption or exclusion has the burden to prove the applicability of the claim.
B. In a criminal proceeding pursuant to the New Mexico Uniform Securities Act, a person claiming an exemption, exception, preemption or exclusion has the burden of going forward with evidence of the claim.
History: Laws 2009, ch. 82, § 503.
58-13C-504. Filing of sales and advertising literature. (2009) A. Except as otherwise provided in Subsection B of this section, a rule adopted or order issued pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978] may require the filing of a prospectus, pamphlet, circular, form letter, advertisement, sales literature or other advertising record relating to a security or investment advice addressed or intended for distribution to prospective investors, including clients or prospective clients of a person registered or required to be registered as an investment adviser.
B. This section does not apply to sales and advertising literature specified in Subsection A of this section that relates to a federal covered security or a federal covered investment adviser or that the director determines by rule or order to be excluded from the requirements of Subsection A of this section.
History: Laws 2009, ch. 82, § 504.
58-13C-505. Misleading filings. (2009) It is unlawful for a person to make or cause to be made, in a record that is used in an action or proceeding or filed pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978], a statement that, at the time and in the light of the circumstances pursuant to which it is made, is false or misleading in a material respect or, in connection with the statement, to omit to state a material fact necessary to make the statement made, in the light of the circumstances pursuant to which it was made, not false or misleading.
History: Laws 2009, ch. 82, § 505.
58-13C-506. Misrepresentations concerning registration or exemption. (2009) The filing of an application for registration, a registration statement, a notice filing pursuant to the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978], the registration of a person, the notice filing by a person or the registration of a security pursuant to that act does not constitute a finding by the director that a record filed pursuant to the New Mexico Uniform Securities Act is true, complete and not misleading. The filing or registration or the availability of an exemption, exception, preemption or exclusion for a security or a transaction does not mean that the director has passed upon the merits or qualifications of, or recommended or given approval to, a person, security or transaction. It is unlawful to make, or cause to be made, to a purchaser, customer, client or prospective customer or client a representation inconsistent with this section.
History: Laws 2009, ch. 82, § 506.
58-13C-507. Qualified immunity. (2009) A broker-dealer, agent, investment adviser, federal covered investment adviser or investment adviser representative is not liable to another broker-dealer, agent, investment adviser, federal covered investment adviser or investment adviser representative for defamation relating to a statement that is contained in a record required by the director, or designee of the director, the securities and exchange commission or a self-regulatory organization, unless the person knew, or should have known at the time that the statement was made, that it was false in a material respect or the person acted in reckless disregard of the statement's truth or falsity.
History: Laws 2009, ch. 82, § 507.
58-13C-508. Criminal penalties. (2009) A. A person who willfully violates Section 501 [58-13C-501 NMSA 1978] or 502 [58-13C-502 NMSA 1978] of the New Mexico Uniform Securities Act is guilty of a third degree felony and, upon conviction, shall be fined not more than five thousand dollars ($5,000) or imprisoned not more than three years, or both, for each violation. For purposes of Subsection B of Section 31-18-13 NMSA 1978, the minimum term prescribed by this subsection is three years.
B. A person who willfully violates Section 505 [58-13C-505 NMSA 1978] of the New Mexico Uniform Securities Act knowing the statement made to be false or misleading in a material respect is guilty of a third degree felony and, upon conviction, shall be fined not more than five thousand dollars ($5,000) or imprisoned not more than three years, or both, for each violation. For purposes of Subsection B of Section 31-18-13 NMSA 1978, the minimum term prescribed by this subsection is three years.
C. No criminal penalties apply to violations of Section 504 [58-13C-504 NMSA 1978] of the New Mexico Uniform Securities Act or the notice filing requirements of Section 302 [58-13C-302 NMSA 1978] or 405 [58-13C-405 NMSA 1978] of that act.
D. Except as provided in Subsections A through C of this section, a person who willfully violates any provision of the New Mexico Uniform Securities Act [58-13C-101 NMSA 1978] or a rule adopted or order issued pursuant to that act is guilty of a fourth degree felony and, upon conviction, shall be fined not more than five thousand dollars ($5,000) or imprisoned not more than eighteen months, or both, for each violation. For purposes of Subsection B of Section 31-18-13 NMSA 1978, the minimum term prescribed by this subsection is eighteen months.
E. An individual convicted of violating a rule or order pursuant to the New Mexico Uniform Securities Act may be fined, but shall not be imprisoned, if the individual did not have knowledge of the rule or order.
F. For the purposes of this section, "willfully" means purposely or intentionally committing the act or making the omission and does not require an intent to violate the law or knowledge that the act or omission is unlawful.
G. Each offense shall constitute a separate offense, and a prosecution for any one of such offenses shall not bar prosecution or conviction for any other offenses.
H. All persons convicted of criminal violations of the New Mexico Uniform Securities Act shall be sentenced in accordance with the Criminal Sentencing Act [31-18-12 NMSA 1978] or its successor statute.
I. No indictment or information may be brought pursuant to this section more than five years after the alleged violation.
J. The attorney general or the proper district attorney, with or without a referral from the director, may institute criminal proceedings pursuant to the New Mexico Uniform Securities Act. The attorney general or district attorney may request assistance from the director or employees of the division. When so requested by the director, the attorney general shall commission as a special assistant attorney general any attorney employed by the director or contracted with by the director and approved by the attorney general to assist the director in carrying out the director's duties, including providing legal advice and prosecuting offenders.
K. The New Mexico Uniform Securities Act does not limit the power of New Mexico to punish a person for conduct that constitutes a crime pursuant to other laws of New Mexico.
History: Laws 2009, ch. 82, § 508.
58-13C-509. Civil liability. (2009) A. Enforcement of civil liability pursuant to this section is subject to the federal Securities Litigation Uniform Standards Act of 1998 (P.L. 105-353, 112 Stat. 3227, et seq.).
B. A person is liable to the purchaser if the person sells a security in violation of Section 301 [58-13C-301 NMSA 1978] of the New Mexico Uniform Securities Act or, by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statement made, in light of the circumstances pursuant to which it is made, not misleading, the purchaser not knowing the untruth or omission and the seller not sustaining the burden of proof that the seller did not know and, in the exercise of reasonable care, could not have known of the untruth or omission. An action pursuant to this subsection is governed by the following:
(1) the purchaser may maintain an action to recover the consideration paid for the security, less the amount of any income received on the security, and interest at the legal rate of interest from the date of the purchase, costs and reasonable attorney fees determined by the court, upon the tender of the security, or for actual damages as provided in Paragraph (3) of this subsection;
(3) actual damages in an action arising pursuant to this subsection 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 interest from the date of the purchase, costs and reasonable attorney fees determined by the court.
C. A person is liable to the seller if the person buys a security by means of an untrue statement of a material fact or omission to state a material fact necessary in order to make the statement made, in light of the circumstances pursuant to which it is made, not misleading, the seller not knowing of the untruth or omission, and the purchaser not sustaining the burden of proof that the purchaser did not know, and in the exercise of reasonable care could not have known, of the untruth or omission. An action pursuant to this subsection is governed by the following:
(1) the seller may maintain an action to recover the security, and any income received on the security, costs and reasonable attorney fees determined by the court, upon the tender of the purchase price, or for actual damages as provided in Paragraph (3) of this subsection;
(3) actual damages in an action arising pursuant to this subsection are the difference between the price at which the security was sold and the value the security would have had at the time of the sale in the absence of the purchaser's conduct causing liability, and interest at the legal rate of interest from the date of the sale of the security, costs and reasonable attorney fees determined by the court.
D. A person acting as a broker-dealer or agent that sells or buys a security in violation of Subsection A of Section 401 [58-13C-401 NMSA 1978] of the New Mexico Uniform Securities Act, Subsection A of Section 402 [58-13C-402 NMSA 1978] of that act or Section 506 [58-13C-506 NMSA 1978] of that act is liable to the customer. The customer, if a purchaser, may maintain an action for recovery of actual damages as specified in Paragraphs (1) through (3) of Subsection B of this section, or, if a seller, for a remedy as specified in Paragraphs (1) through (3) of Subsection C of this section.
E. A person acting as an investment adviser or investment adviser representative that provides investment advice for compensation in violation of Subsection A of Section 403 [58-13C-403 NMSA 1978] of the New Mexico Uniform Securities Act, Subsection A of Section 404 [58-13C-404 NMSA 1978] of that act or Section 506 [58-13C-506 NMSA 1978] of that act is liable to the client. The client may maintain an action to recover the consideration paid for the advice, interest at the legal rate of interest from the date of payment, costs and reasonable attorney fees determined by the court.
F. A person that receives, directly or indirectly, any consideration for providing investment advice to another person and that employs a device, scheme or artifice to defraud the other person or engages in an act, practice or course of business that operates or would operate as a fraud or deceit on the other person, is liable to the other person. An action pursuant to this subsection is governed by the following:
(1) the person defrauded may maintain an action to recover the consideration paid for the advice and the amount of any actual damages caused by the fraudulent conduct, interest at the legal rate of interest from the date of the fraudulent conduct, costs and reasonable attorney fees determined by the court, less the amount of any income received as a result of the fraudulent conduct; and
G. The following persons are liable jointly and severally with and to the same extent as persons liable pursuant to Subsections B through F of this section:
(1) a person that directly or indirectly controls a person liable pursuant to Subsections B through F of this section, unless the controlling person sustains the burden of proof that the person did not know, and in the exercise of reasonable care could not have known, of the existence of conduct by reason of which the liability is alleged to exist;
(2) an individual who is a managing partner, executive officer or director of a person liable pursuant to Subsections B through F of this section, including an individual having a similar status or performing similar functions, unless the individual sustains the burden of proof that the individual did not know and, in the exercise of reasonable care could not have known, of the existence of conduct by reason of which the liability is alleged to exist;
(3) an individual who is an employee of or associated with a person liable pursuant to Subsections B through F of this section and who materially aids the conduct giving rise to the liability, unless the individual sustains the burden of proof that the individual did not know and, in the exercise of reasonable care could not have known, of the existence of conduct by reason of which the liability is alleged to exist; and
(4) a person that is a broker-dealer, agent, investment adviser or investment adviser representative that materially aids the conduct giving rise to the liability pursuant to Subsections B through F of this section, unless the person sustains the burden of proof that the person did not know and, in the exercise of reasonable care could not have known, of the existence of conduct by reason of which liability is alleged to exist.
H. A person liable pursuant to this section has a right of contribution as in cases of contract against any other person liable pursuant to this section for the same conduct.
I. A cause of action pursuant to this section survives the death of an individual who might have been a plaintiff or defendant.
J. A person shall not obtain relief unless the suit is brought:
(1) within two years after discovery of the violation or after discovery should have been made by the exercise of reasonable diligence; and
(2) within five years after the act or transaction constituting the violation.
K. A person that has made, or has engaged in the performance of, a contract in violation of the New Mexico Uniform Securities Act or a rule adopted or order issued pursuant to that act, or that has acquired a purported right pursuant to the contract with knowledge of conduct by reason of which its making or performance was in violation of the New Mexico Uniform Securities Act, may not base an action on the contract.
L. A condition, stipulation or provision binding a person purchasing or selling a security or receiving investment advice to waive compliance with the New Mexico Uniform Securities Act, or a rule adopted or order issued pursuant to that act, is void.
M. The rights and remedies provided by the New Mexico Uniform Securities Act are in addition to any other rights or remedies that may exist, but that act does not create a cause of action not specified in this section or Subsection E of Section 411 [58-13C-411 NMSA 1978] of that act.
History: Laws 2009, ch. 82, § 509.
58-13C-510. Rescission offers. (2009) A purchaser, seller or recipient of investment advice shall not maintain an action pursuant to Section 509 [58-13C-509 NMSA 1978] of the New Mexico Uniform Securities Act if:
A. the purchaser, seller or recipient of investment advice receives in a record, before the action is instituted:
(1) an offer stating the respect in which liability pursuant to Section 509 of the New Mexico Uniform Securities Act may have arisen and fairly advising the purchaser, seller or recipient of investment advice of that person's rights in connection with the offer, and any financial or other information necessary to correct all material misrepresentations or omissions in the information that was required by the New Mexico Uniform Securities Act to be furnished to that person at the time of the purchase, sale or investment advice;
(2) if the basis for relief pursuant to this section may have been a violation of Subsection B of Section 509 of the New Mexico Uniform Securities Act, an offer to repurchase the security for cash, payable on delivery of the security, equal to the consideration paid, and interest at the legal rate of interest from the date of the purchase, less the amount of any income received on the security; or, if the purchaser no longer owns the security, an offer to pay the purchaser upon acceptance of the offer damages in an 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 interest from the date of the purchase in cash equal to the damages computed in the manner provided in this subsection;
(3) if the basis for relief pursuant to this section may have been a violation of Subsection C of Section 509 of the New Mexico Uniform Securities Act, an offer to tender the security, on payment by the seller of an amount equal to the purchase price paid, less income received on the security by the purchaser and interest at the legal rate of interest from the date of the sale; or if the purchaser no longer owns the security, an offer to pay the seller upon acceptance of the offer, in cash, damages in the amount of the difference between the price at which the security was purchased and the value the security would have had at the time of the purchase in the absence of the purchaser's conduct that may have caused liability and interest at the legal rate of interest from the date of the sale;
(4) if the basis for relief pursuant to this section may have been a violation of Subsection D of Section 509 of the New Mexico Uniform Securities Act; and if the customer is a purchaser, an offer to pay as specified in Paragraph (2) of this subsection; or, if the customer is a seller, an offer to tender or to pay as specified in Paragraph (3) of this subsection;
(5) if the basis for relief pursuant to this section may have been a violation of Subsection E of Section 509 of the New Mexico Uniform Securities Act, an offer to reimburse in cash the consideration paid for the advice and interest at the legal rate of interest from the date of payment; or
(6) if the basis for relief pursuant to this section may have been a violation of Subsection F of Section 509 of the New Mexico Uniform Securities Act, an offer to reimburse in cash the consideration paid for the advice, the amount of any actual damages that may have been caused by the conduct and interest at the legal rate of interest from the date of the violation causing the loss;
B. the offer pursuant to Subsection A of this section states that the offer must be accepted by the purchaser at any time within a specified period of not less than thirty days, or such shorter or longer period as the director by order prescribes, and contains such other terms and conditions, if any, as the director specifies;
C the offer pursuant to Subsection A of this section is delivered to the purchaser, seller or recipient of investment advice, or sent in a manner that ensures receipt by the purchaser, seller or recipient of investment advice;
D. the purchaser, seller or recipient of investment advice timely accepts the offer made pursuant to Subsections A through C of this section in a record; and
E. the offer made and accepted in compliance with Subsections A through D of this section is paid in accordance with the terms of the offer; or F. the purchaser, seller or recipient of investment advice receives an offer in compliance with Subsections A through C of this section but fails to accept the offer in a record within the period specified in the offer.
History: Laws 2009, ch. 82, § 510. Would you like to recieve notifications from us? Subscribe
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