Moreover, the Securities Act provides for certain criminal liabilities for issuers who intentionally or unintentionally mislead investors. Such penalties can range from fines of up to $10,000 and/or up to 5 years in jail (15 U.S. Code § 77x) all the way up to fines of $20,000,000 and/or up to 20 years in jail (15 U.S. Code § 78ff). Needless to say, you are going to want to do everything possible to avoid having the guys in blue jackets with yellow letters show up at your door….

15 U.S.C. § 80b-3(e).28. 15 U.S.C. § 78ff (criminal penalties under the Exchange Act); 15 U.S.C. § 77x (criminal penalties under the Securities Act); 15 U.S.C. § 80a-48 (criminal penalties under the Investment Company Act); 15 U.S.C. § 80b-17 (criminal penalties under the Investment Advisers Act).29. 15 U.S.C. § 78j; 17 C.F.R. § 240.10b-5.30.