Unregistered securities sale in Nevada What happened next

Have you ever felt overwhelmed by Nevada’s intricate securities laws that seem impossible to untangle? You’re not alone; many face these challenges, especially with unregistered securities sales. Understanding Nevada’s laws, like in the Fullerton v. State case, is crucial for navigating such issues. This article highlights essential court rulings to help you find potential solutions.

Situation

Specific Situation

In Nevada, there was a legal situation involving two people who got into trouble with the state’s securities law. These two individuals were accused of selling securities that weren’t registered. This broke the rules set by the Nevada Revised Statutes (NRS) 90.460. According to this law, if you want to sell securities, they must be registered unless there’s a special reason they don’t have to be. The people involved in the case believed they didn’t need to register the securities because of a specific rule for small sales called NRS 90.530(11). They argued that what they did should be okay because they followed this rule.

Plaintiff’s Argument

The State of Nevada, which was the one complaining, said these individuals broke the law because they sold the securities without having them registered and didn’t qualify for any special exceptions. The state argued that it was the job of these individuals to show they deserved the exception. They particularly pointed to a rule that said no money (commissions) should be paid to anyone except licensed brokers. The state thought there was evidence showing money was paid to people who weren’t licensed brokers, which would mean the individuals couldn’t use the exception for some of their transactions.

Defendant’s Argument

The people who were accused said they did follow the rules for the small sales exception under NRS 90.530(11). They argued that in most of their transactions, they didn’t pay any commissions, so those transactions shouldn’t need to be registered. They insisted that the state didn’t have enough proof to show beyond a doubt that money was paid as commissions for the transactions in question.

Judgment Outcome

In the end, the court mostly agreed with the people who were accused. The court found that they showed there were no commission payments in seventeen out of twenty-one transactions. Because of this, their convictions for those seventeen transactions were overturned. But for four transactions, where it was clear commissions were paid, the court upheld the convictions. This means they didn’t have to do anything more about the overturned counts, but the convictions for the four counts still stood. (Nevada Nos. 32295, 32320)

Resolution

Immediate Actions

If you find yourself in a similar situation, the first thing to do is gather all the documents related to the securities you sold. Make sure you have evidence showing that no commissions were paid to anyone outside of licensed brokers. This evidence is crucial because it can help prove that you’re entitled to an exemption under NRS 90.530(11).

Filing a Complaint

If you believe you qualify for an exemption but are still facing legal action, you may need to file a formal response in court. This is often called a “complaint” or “motion to dismiss.” In your filing, clearly outline why you believe the transactions should be exempt. Include any evidence that supports your case, like financial records or affidavits from witnesses who can confirm your claims.

Negotiation and Settlement

Sometimes, it’s possible to avoid going to court by negotiating a settlement with the state. If you can prove that any commission payments were accidental or unrelated to the transactions in question, the state might be willing to settle the case without further legal proceedings. This can save time and legal costs.

FAQ

What is NRS?

The Nevada Revised Statutes (NRS) are the official laws of Nevada. They include rules about securities, which are like stocks or investments that people can buy and sell.

Who is responsible under NRS 90.460?

Anyone who sells or offers securities in Nevada without registering them or without a valid exemption can be held responsible under NRS 90.460.

How can the state prove a violation?

The state must show evidence that securities were sold without being registered and that there was no valid exemption. They need to prove this beyond a reasonable doubt.

What transactions are exempt?

Certain transactions, like small sales that meet specific criteria, can be exempt from needing to register the securities, according to NRS 90.530.

What is a broker?

A broker is someone who is licensed to buy and sell securities. They are allowed to receive commissions for their services.

What does “burden of proof” mean?

The “burden of proof” is the responsibility to show enough evidence to support your claim. In this case, it means proving that your securities transactions qualify for an exemption.