Both Javier's family and the business have rebounded from their prior issues. Tiffany sought counseling for her gambling issues. She has worked hard to mend her relationships with the family. Before cashing the forged checks from Tiffany, Don was struck by lightning and experienced a spiritual enlightenment. He willingly returned the checks to Javier and Elena and promptly joined the Peace Corps. Likewise, when the church found out the donated check was a forgery, they immediately returned it. Tyrone's wife (also Elena's best friend) found out about Tyrone's online sabotage. She promptly remedied the situation.

Once Javier's Very Hot Sauce! was back on track, the company's growth was exponential. They were featured on a popular talk show starring a prominent chef. After this, online orders and demands from big-box chains nationwide skyrocketed. Javier and Elena have been told that now would be an ideal time to take Javier's Very Hot Sauce! public. The only concerning issue at hand involves Manya, a local woman with an accounting degree. She applied for the open bookkeeper position. Javier told her that he needed a man and hired Marcos, a man without a degree and no experience instead. Manya has filed a claim of sex discrimination against the company and Javier personally.

Javier and Elena are seeking your advice about Manya and the possibility of taking the company public.

1. What are three existing or potential legal or regulatory issues apparent in this fact pattern that might impact a public offering?

If the SEC uncovers a potential violation of the 1933 act it can recommend criminal prosecution?