Click to Home
Go To Search
Consequences of Non Compliance
Failure to comply with registration requirements or an eligible exemption can have many consequences for an issuer.

First of all, failure to comply creates civil liability for the issuer pursuant to K.S.A. 17-12a509.

Additionally, failure to comply with securities laws in an offering may hamper any future capital formation attempts because the past error has to be corrected, usually through a rescission offer, and/or because of the requirement to disclose the liability arising from the original non compliance.

Finally, failure to comply is illegal and is subject to an administrative Order issued by the Securities Commissioner to Cease and Desist, pay a fine of up to $40,000 per violation, and/or pay restitution or disgorgement of all proceeds of the offering plus interest.The Commissioner may also file civil litigation seeking equitable remedies or file criminal charges for which the penalty is usually imprisonment if the loss involved is greater than $25,000.