Securities Crimes

Title 4, Division 1, Part 6, Chapter 3 of the Corporations Code deals with crimes and enforcement of the California Corporate Securities Law of 1968.

Section 25540 provides that any person who willfully violates any provision of this division, or who willfully violates any rule or order under this division, must upon conviction be fined not more than $1 million or imprisoned in a county jail for not more than one year, or be punished by both that fine and imprisonment.

No person may be imprisoned for the violation of any rule or order if he or she proves that he or she had no knowledge of the rule or order. Any person who willfully violates specifies laws, or who willfully violates any rule or order under this division adopted pursuant to those provisions, must upon conviction be fined not more than $10 million, or imprisoned for two, three, or five years, or be punished by both that fine and imprisonment.

Section 25541 provides that any person who willfully employs, directly or indirectly, any device, scheme, or artifice to defraud in connection with the offer, purchase, or sale of any security or willfully engages, directly or indirectly, in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person in connection with the offer, purchase, or sale of any security shall upon conviction be fined not more than $10 million, or imprisoned for two, three, or five years, or be punished by both that fine and imprisonment.