b'How to Legally Raise Private Money Other consequences of securities violations might be civil lawsuit from investorsorregulatorsallegingfraud,misrepresentation,negligence, breach of fiduciary duties, theft, or embezzlement for which they could seek rescission, punitive damages or possible criminal penalties. A further threat comes from the statute of limitations for securities violations, which does not begin to run until the violation is discovered. This could be many years after the securities were originally sold. Securities laws as they relate to private offerings are self-policing: There is little likelihood that anyone will audit your offering for securities vi-olations until something goes wrong. Violations are usually discovered when the investment fails; or an investor wants out of a deal and he or she hires an attorney or complains to a regulator in an effort to get his or 44'