Prime Investors Corp. issued certain mortgage-backed securities that were sold to individual investors in all 50 states. The offering materials did not inquire as to the investment experience or financial qualifications of the prospective investors. The prospectus did not disclose that the mortgage loans underlying the mortgage-backed securities varied from (a) standard 30-year fixed-rate mortgage loans with only an 80% loan to value to borrowers with excellent credit, to (b) subprime variable rate mortgage loans (some of which were in a second lien position) with a 97% or higher loan to value to borrowers with poor credit. The securities were not registered with the SEC. Shortly after their issuance in early 2008, the securities went into default due to the housing crisis. Prime Investors Corp. argued that these securities were entitled to a AAA rating because the mix of underlying loans ensured that they would thrive in any economic situation, and did not need to be registered with the SEC due to various exemptions. When the investors sued, what exposure, if any, does Prime Investors Corp. have under the securities laws? What laws, if any, did Prime Investors Corp. violate?