A person authorizing or causing the distribution of securities as a stock dividend by a corporation other than the issuer, without registration of the securities under the New Mexico Uniform Securities Act or the federal Securities Act of 1933, is deemed to employ a “device, scheme or artifice to defraud” the purchasers of the securities in broker-dealer transactions, within the meaning of Section 58-13C-501A of the New Mexico Uniform Securities Act, if:

1. A. the issuer of the securities was organized or the securities were acquired for the purpose of distribution or in connection therewith, either by the distributing corporation or by any person in control of, controlled by, or under common control with, the distributing corporation; or
2. B. the issuer has nominal assets or income at the time of the distribution and the person has reason to believe that the distribution will be followed by transactions in securities effected by broker-dealers.

[12.11.15.9 NMAC - Rp, 12 NMAC 11.15.3, 1-1-2010]