The United States enacted the federal Securities Act of 1933; however, the federal securities laws do not include substantive merit requirements, but require only that securities offerings include full disclosure of all material facts in an offering of securities.
The modern New Mexico Uniform Securities Act (NMSA) includes unfair, unjust or inequitable language under NMSA 58-13C-306(A) (7) (c) as grounds for denial, suspension or revocation of a securities registration. However, NMSA further requires specific standards to be published in regulations for defining conduct or terms that are deemed unfair, unjust, inequitable or would otherwise tend to work a fraud on purchasers. The specific standards are published under 18.104.22.168 NMAC, in which various NASAA statements of policy were adopted by reference.
In order to register securities in New Mexico and a majority of other states, fairness criteria must be met in addition to full disclosure of all material facts that investors need to make an informed investment decision. Registration with the Securities and Exchange Commission (SEC), however, is possible with unfair, unjust or inequitable terms as long as there is full disclosure of such terms of the offering or plan of business of the issuer.