2023 New Mexico Statutes › Chapter 58 - Financial Institutions and Regulations › Article 13C - New Mexico Uniform Securities › Article 5 - Fraud and Liabilities › Section 58-13C-502 - Prohibited conduct in providing investment advice.

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 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.
ANNOTATIONS
Effective dates.
— Laws 2009, ch. 82, § 704 made the New Mexico Uniform Securities Act effective January 1, 2010.
Cases under prior law.
— The pre-2010 cases below were decided under the former New Mexico Securities Act of 1986, Chapter 58, Article 13B. Due to the similarities between the two laws, the case annotations have been retained and included as annotations to the New Mexico Uniform Securities Act.
Fraud essential element of securities fraud.
— It is necessary to prove conduct that would constitute the crime of fraud before one can be found guilty of securities fraud.
State v. McCall
, 1983-NMCA-109, 101 N.M. 616, 686 P.2d 958,
rev'd on other grounds
, 1984-NMSC-007, 101 N.M. 32, 677 P.2d 1068 (decided under former law).
Defendant's intent in making fraudulent statement irrelevant under section.
— Although in common-law fraud the plaintiff must prove that the defendant intentionally deceived him, the intent with which the defendant makes the statement is irrelevant under the terms of this section, which requires only that the statement made be false and material or that the omission be of a material fact necessary to make true the statement made.
Treider v. Doherty & Co.
, 1974-NMCA-109, 86 N.M. 735, 527 P.2d 498, cert. denied, 86 N.M. 730, 527 P.2d 493 (decided under former law).
Standard of proof.
— Since the term "fraud," as used in this section, is not the equivalent of actual fraud or conscious deceit, the quantum of proof requirements as to actual fraud are not controlling, and the trial court correctly instructed the jury that the standard of proof was by a preponderance of the evidence.
Treider v. Doherty & Co.
, 1974-NMCA-109, 86 N.M. 735, 527 P.2d 498, cert. denied, 86 N.M. 730, 527 P.2d 493 (decided under former law).
Sufficient evidence to establish requisite fraudulent intent.
State v. Gardner
, 1985-NMCA-084, 103 N.M. 320, 706 P.2d 862, cert. denied, 103 N.M. 287, 705 P.2d 1138 (decided under former law).
Law reviews.
— For article, "A Survey of the Securities Act of New Mexico," see 2 N.M.L. Rev. 1 (1972).
For article, "The Use (or Abuse) of the Limited Partnership in Financing Real Estate Ventures in New Mexico," see 3 N.M.L. Rev. 251 (1973).
For comment, "Securities: Private Placements in New Mexico," see 7 N.M.L. Rev. 105 (1976-77).
Am. Jur. 2d, A.L.R. and C.J.S. references. —
69A Am. Jur. 2d Securities Regulations - State § 193 et seq.
Corporate insiders nondisclosure of information to seller or purchaser of corporation's stock as manipulative or deceptive device prohibited by § 10(b) of the Securities Exchange Act of 1934 (15 U.S.C., § 78j(b)), 22 A.L.R.3d 793.
Scienter requirement in actions under antifraud provision of Investment Advisers Act (15 USCS § 80b-6), 133 A.L.R. Fed. 549.