Q: What happens if I offer or sell an unregistered security?
In Arizona, whether you mean it or not, if you offer or sell an unregistered security that does not qualify for an exemption from registration, you have violated the Arizona Securities Act. The law requires the registration of securities before they may even be offered for sale in Arizona. Additionally, the person who is doing the offering of the security is required to register.
The Arizona Corporation Commission may bring an administrative action against you for violation of the Arizona Securities Act. The Commission has the authority to order you to stop the offering and selling of the unregistered security, pay penalties and pay restitution.
The Commission may also bring a civil action against you in the Maricopa County or Superior Court. Additionally, violation of the registration provisions is a class four felony. The Commission may refer the matter for criminal proceedings to a county attorney, the attorney general, or the United States attorney.
Arizona Statutes and Rules
The information provided on this website is not comprehensive, is not offered as legal advice, and is not a substitute for competent legal counsel. The Securities Division provides this information to give you an overview of the topics discussed. You should not rely on the accuracy of this information, but should carefully review all applicable statutes and regulations with the assistance of legal counsel.