OPINION

HASTINGS, J.

Robert Francis Corey appeals from the judgment (order granting probation) entered following a jury trial which resulted in his conviction of selling an unqualified, unexempt security (Corp. Code, § 25110) and selling a security by means of false statements or omissions (Corp. Code, § 25401). Appellant contends that the trial court committed several instructional errors and erred by excluding evidence regarding whether he intended to sell the security and whether he knew that the offering was fraudulent and that the promotional materials contained false and misleading statements. Based on the recent case of People v. Simon (1995) 9 Cal.4th 493 [ 37 Cal.Rptr.2d 278, 886 P.2d 1271], disapproving People v. Johnson (1989) 213 Cal.App.3d 1369 [ 262 Cal.Rptr. 366], we reverse the conviction for violation of section 25401, remand for retrial and otherwise affirm.

BACKGROUND

On the ground that the charges against appellant under sections 25110 and 25401 were strict liability offenses, the prosecutor successfully brought a motion in limine to exclude evidence whether appellant received any advice from counsel or other persons regarding the legality of the offer and sale. The trial court also refused to allow appellant to testify whether he knew the investment scheme was fraudulent and whether he intended to sell the interest to Cole. It also refused several of appellant's proposed jury instructions bearing on his state of mind.

THE FACTS

Appellant, a broker, was an assistant to Cole's account representative at the Paine Webber brokerage firm. Cole and appellant became close friends over a period of several months, during which time appellant resolved various problems concerning Cole's accounts at Paine Webber. Appellant, as a Paine Webber broker, also looked for good investments for Cole. She often followed his recommendations, and they spoke daily.

The last week of May 1990, Cole heard about the Game from appellant during a telephone conversation. Appellant advised her that he thought it was a great deal, indicated that a friend of his was in a position where he could see how much money was being made, and that it was one of the best deals he had ever seen.

On Saturday, June 2, 1990, Cole and appellant met for lunch. Appellant gave her written information relating to Panda and a separate Paine Webber offering. The Panda documents, in a format which resembled a prospectus, indicated that Panda had been given exclusive rights to the Game and that the Michael Jackson Fan Club had agreed to purchase 200,000 units. Cole testified that these statements formed the basis of her decision to invest. Appellant further told her that the investment was a "no brainer" and that the fan club had already committed to the purchase, therefore, additional sales would be pure profit. Appellant advised her he would not be getting a commission on the sale. She was enthusiastic about the investment, and appellant represented that if there were any investment units left, he would try to get her involved.

Appellant telephoned Cole on Sunday, June 3, 1990, advised that the Panda investment opportunity was available, and asked if she was still interested. She told him she was ready to sign papers. Appellant told her that she would acquire an equity interest of 1.75 percent in the Game profits. Later that day, appellant brought a Panda subscription agreement to Cole's residence. Appellant had already partially filled in the subscription agreement, and he completed the form in her presence. She signed it and gave appellant a check for $35,000, drawn on one of her Paine Webber accounts, made out to Panda.

Cole received a letter from Panda confirming her purchase of 1.75 units in its investment program. Enclosed was a promissory note that included the language, "Promissory Note and Stock Option." Because the promissory note did not reflect an equity interest in Game profits, Cole became upset and telephoned appellant. He told her he would resolve the problem and they took part in a three-way telephone conversation with Carlos Yanez. Yanez told her he was a lawyer representing Panda and he sent her new paperwork to resolve the problem. Panda failed to make any expected payments to Cole.

The trial court disallowed questions directed toward ascertaining what appellant either knew or believed about the offering, indicating that such questions were irrelevant because the charges were strict liability offenses and the only issue was whether appellant had made the statements about the Panda investment and had conveyed the Panda literature containing those same representations to Cole.

Appellant was convicted of selling an unqualified, unexempt security (§ 25110) and selling a security by means of false statements or omissions (§ 25401). He first contends that the trial court erred in holding that the prosecution did not need to present evidence of his state of mind and lack of knowledge. Given the holding in the recent case of People v. Simon, supra, 9 Cal.4th 493, we must reverse his conviction for violation of section 25401

DISCUSSION

In Simon, the defendant, a tax preparer, sold to several of his clients promissory notes and interests in limited partnerships that had been formed to purchase, manage, and resell real property. Defendant believed that his preexisting relationship with the investors exempted these securities from the qualification requirements of the Corporations Code. Cash flow problems, arising after completion of these transactions, led to transfers of funds among the partnerships. The defendant was charged with selling unqualified, unexempt securities under section 25110 and, based on the transfers of funds, selling securities by means of false statements or omissions under section 25401

Simon's defense to the section 25401 charges was that the cash flow problems were unanticipated and arose after completion of the sales transactions. The trial court ruled that section 25401 created a strict liability offense, instructing the jury that the actor's intent or knowledge at the time of a material representation was irrelevant, that only a general intent to commit the proscribed act was required, and that the section is violated when a later event makes a representation untrue. After judgment, the case was transferred to the California Supreme Court. (Cal. Rules of Court, rule 27.5.)

The court noted that section 25401 itself does not expressly require knowledge of the false statement or omission as an element of the offense proscribed. It concluded that "[n]either the language and history of section 25540 [prescribing penalties for section 25401 offenses] nor reference to the federal law after which section 25401 was patterned resolves this question since violations of section 25401 may be the basis for administrative or civil, as well as penal, sanctions. In ascertaining legislative intent in this case we must look to the entire regulatory scheme of the Corporate Securities Law of 1968 [to determine where in the regulatory hierarchy a criminal violation of section 25401 falls]." ( People v. Simon, supra, 9 Cal.4th at p. 509.)

First, under section 25530, the Commissioner of Corporations may enjoin the proscribed conduct and, pursuant to section 25535, may seek a civil penalty of up to $2,500 for each violation of any provision, rule, or order. Because an enforcement action to enjoin future sales by means of false or misleading statements is designed to protect the public, the court concluded that "[t]he relatively small civil penalty authorized implies that administrative enforcement of section 25401 was permissible regardless of whether a violation or threatened violation of that section was a knowing violation." ( People v. Simon, supra, 9 Cal. 4th at p. 516.)

Second, section 25501 provides recovery of actual losses in a civil action by an injured investor but only if the offeror knew, or with reasonable care would have known, of the false or misleading statements by which the sale was made.

The third level of enforcement, provided under section 25540, is criminal prosecution with the possibility of substantial fines and imprisonment upon conviction.

The court noted that the penalties of section 25540 apply to criminal violations of " any provision of the Corporate Securities Law of 1968, including violations of rules or orders promulgated under that law or of which the violator had knowledge." ( People v. Simon, supra, 9 Cal.4th at p. 509.) The court stated it hesitated "to assume that the Legislature intended that scienter be an element of every regulatory aspect of the Corporate Securities Law of 1968" but indicated that its reluctance was "tempered somewhat by recognition that the Legislature has now attached extremely heavy penalties to criminal violations of some provisions of the Corporate Securities Law of 1968." ( Id. at p. 509, fn. 13.) Noting that a 1993 amendment to section 25540 increased the maximum fine for most violations to $1 million and the fine for violations of section 25401 and several other sections to $10 million, it indicated it generally presumed that the Legislature would not attach such a substantial penalty to a strict liability offense. ( People v. Simon, supra, 9 Cal.4th at p. 509, fn. 13.)

The court concluded that the Legislature could not have intended to dispense with the element of scienter in creating this third tier of enforcement. ( People v. Simon, supra, 9 Cal. 4th at pp. 520-522.)

In the instant case, the trial court, not having the benefit of the Simon decision, instructed the jury pursuant to CALJIC No. 4.36: "When the evidence shows that a person voluntarily did that which the law declares to be a crime, it is no defense that he did not know that the act was unlawful or that he believed it to be lawful." It further instructed, as requested by the People: "In regards to Corporations Code Sections 25110 and 25401, the doing of the act willfully is punishable as a crime. The intent with which the act was committed is immaterial to guilt. [¶] Proof that the defendant had an evil motive or guilty knowledge is not required. Moreover, evidence that a defendant acted in good faith is not a defense." It instructed the jury pursuant to CALJIC No. 1.20: "The word `willfully' when applied to the intent with which an act is done or omitted means with a purpose or willingness to commit the act or to make the omission in question. The word `willfully' does not require any intent to violate the law, or to injure another, or to acquire any advantage."

Under Simon, section 25401 now has been held to be other than a strict liability offense. The evidence at trial indicated that appellant made oral statements to Cole which were similar to statements set out in the printed materials provided by Panda. Given that the prosecution was unaware of its burden to prove the element of scienter, and that the trial court prevented appellant from fully eliciting evidence on this issue, instructing the jury that such evidence was irrelevant, the conviction on this count must be reversed.

To provide guidance on retrial, we address appellant's contention that the trial court improperly refused to instruct the jury pursuant to CALJIC No. 4.35 regarding mistake of fact with respect to the charge that he used false statements in the sale of a security in violation of section 25401

The trial court must instruct on general principles of law relevant to the issues raised by the evidence. ( People v. Kimble (1988) 44 Cal.3d 480, 503 [ 244 Cal.Rptr. 148, 749 P.2d 803]; People v. Sedeno (1974) 10 Cal.3d 703, 715 [ 112 Cal.Rptr. 1, 518 P.2d 913], disapproved on another ground in People v. Flannel (1979) 25 Cal.3d 668, 684-685 [ 160 Cal.Rptr. 84, 603 P.2d 1]; People v. Laskiewicz (1986) 176 Cal.App.3d 1254, 1257 [ 222 Cal.Rptr. 686].) Because under Simon scienter is an element of this offense and must be proved by the prosecution, CALJIC No. 4.35 may become relevant if appellant invokes the defense of mistake of fact in his defense upon retrial.

(2) Appellant contends that the trial court erred in excluding evidence whether he intended to sell an unqualified, unexempt security, as prohibited in section 25110 The court in Simon did not address the issue of scienter in connection with this section, as it did with regard to section 25401 Rather, the reversal of Simon's section 25110 convictions rested on the failure of the trial court to instruct on the burden of proof relating to the issue of exemptions. ( People v. Simon, supra, 9 Cal.4th at pp. 499-506.)

As pertinent, section 25110 provides: "It is unlawful for any person to offer or sell in this state any security in an issuer transaction . . ., whether or not by or through underwriters, unless such sale has been qualified . . . or unless such security or transaction is exempted. . . ." Section 25540 incorporates the element of "willfulness" into the concept of criminal liability for violation of section 25110, just as it does for violation of section 25401, discussed in Simon.

The issue of whether the term "willfulness" incorporates a concept of good faith in connection with section 25110 was addressed in People v. Clem (1974) 39 Cal.App.3d 539 [ 114 Cal.Rptr. 359]. The persons charged in Clem were originators of limited partnerships and of the financing scheme utilized to raise money, as in Simon. As such, they were directly responsible as issuers of the offerings and were charged with strict criminal liability. The court concluded that ". . . the Legislature intended section 25540 to preserve strict criminal liability for violations of the Corporate Securities Law." ( People v. Clem, supra, 39 Cal.App.3d at p. 542.) As to the term "willfully," it held: "`all that is required is proof that the person acted intentionally in the sense that he was aware of what he was doing. Proof of evil motive or intent to violate the law, or knowledge that the law was being violated, is not required.'" ( Id. at p. 542.) It concluded: ". . . except as provided by section 25700 [not pertinent here] advice of counsel or other evidence of good faith is not a defense to a charge of dealing in unqualified securities." ( Id. at pp. 542-543, fn. omitted.)

After Simon, we must question the broad statement in Clem which concludes that "the Legislature intended section 25440 to preserve strict criminal liability for violations of the Corporate Securities Law." In Simon, as previously noted, the Supreme Court held that section 25440, as applied to section 25401, did not provide for strict liability. This was after review of the legislative scheme adopting section 25401 Because section 25440 applies to both sections 25401 and 25110, we must analyze the reasoning in Simon to determine its applicability to violations of section 25110

First, as we previously noted, the Supreme Court reversed Simon's convictions for violation of section 25110 on the basis of instructional error and not, as it did for his convictions under section 25401, on the basis of scienter. It may well be that the court determined that the issue of scienter was not before it with regard to section 25110 In footnote 13, the court made the following plea to the Legislature: "We encourage the Legislature to clarify which of the criminal violations of the Corporate Securities Law of 1968 that are punishable under either subdivision (a) [including section 25110] or (b) of section 25540 are strict liability offenses and what mental states are elements of those which require scienter." ( People v. Simon, supra, 9 Cal. 4th at pp. 509-510.)

In Simon, the court determined that section 25401 was adopted at the same time as section 25501, which set forth the civil liability for violation of section 25401 It noted that section 25501 allows the purchaser of the security to recover damages against the person from whom the securities were purchased "` unless the defendant proves . . . that the defendant exercised reasonable care and did not know (or if he exercised reasonable care would not have known) of the untruth or omission. . . .'" ( People v. Simon, supra, 9 Cal. 4th at p. 516, italics in original.) The court also noted the magnitude of the potential criminal penalties available under section 25540: up to five years in state prison and a fine of up to $10 million.

In contrast to section 25501, section 25503, the statute providing for recovery of damages in a civil action for violation of section 25110, does not contain a scienter element. Also, the magnitude of potential criminal penalties for violation of section 25110 is much less than for violation of section 25401; up to $1 million in fines and up to one year imprisonment. Therefore, the rationale applied in Simon does not support a similar outcome with regard to section 25110

Courts have long considered a violation of section 25110 to be a strict liability offense which has as its purpose the protection of the public. "[T]he main objective of the securities law is to protect the public against the imposition of insubstantial, unlawful and fraudulent stock and investment schemes [citations], and to promote full disclosure of all information that is necessary to make informed and intelligent investment decisions [citations]." ( People v. Park (1978) 87 Cal.App.3d 550, 565 [ 151 Cal.Rptr. 146].)

The Simon court, in overruling People v. Johnson, supra, 213 Cal.App.3d 1369, and reaching its conclusion that violation of section 25401 requires scienter, relied in part on the critique of People v. Johnson by former Commissioner of Corporations Robert H. Volk and Professor Harold Marsh, Jr., described as having "major responsibility" for drafting the Corporate Securities Law of 1968. ( People v. Simon, supra, 9 Cal. 4th at pp. 513-514.) These commentators state: "Section 25540 was intended to impose criminal liability only for an intentional misstatement." (1 Marsh Volk, Practice under the Cal. Securities Laws (rev. ed. 1994) § 14.13[1], p. 14-79.) In contrast, immediately after Marsh and Volk severely criticize the contrary statement of legislative intent hazarded by the Johnson court, they state that "[a] criminal violation of Corp. Code Section 25110 is considered a strict liability offense," citing, without comment, People v. Feno (1984) 154 Cal.App.3d 719, 725 [ 201 Cal.Rptr. 513], and People v. Clem, supra, 39 Cal.App.3d at pp. 541-543. (1 Marsh Volk, op. cit., supra, at p. 14-80 and fn. 10.)

We conclude that section 25110 does not include scienter as an element which must be proved to establish that a person who offers or sells an unregistered and unexempt security is in violation of the statute.

Jury Instructions

(3) Appellant contends that the court should have instructed on the definition of agency as contained in section 25003, because "only issuers and agents of issuers (which include sellers) can be held strictly liable as direct sellers under sections 25401 and 25110 of the Corporations Code." In connection with this argument, appellant cites the cases of People v. Clem, supra, 39 Cal.App.3d 539, People v. Baumgart (1990) 218 Cal.App.3d 1207 [ 267 Cal.Rptr. 534], and People v. Feno, supra, 154 Cal.App.3d 719. He points out that in each of those cases, the persons charged were either the actual issuers ( Clem and Feno) or an employee of the actual issuer ( Baumgart). None of the cases discusses this specific issue and appellant cites no cases on point. Furthermore, neither of the sections is so limited.

A 1972 amendment to section 25110 suggests that construction of the statute as maintained by appellant is contrary to the intent of the Legislature. When the statute was originally drafted it read: "It is unlawful for any issuer to offer or sell in this state any security issued by it. . . ." (Italics added.) In 1972, the statute was amended, and it now reads: "It is unlawful for any person to offer or sell in this state any security in an issuer transaction . . . unless such sale has been qualified. . . ." (Historical Note, 25 West's Ann. Corp. Code (1977 ed.) § 25110, p. 85, italics added.) Before the 1972 amendment, appellant would have had a valid point with regard to section 25110 However, the amendment shifted the emphasis to whether there is an offer or sale of an unsecured or unexempt security by "any person . . . in an issuer transaction."

The trial court instructed with respect to section 25110 as follows: "Section 25110 makes it unlawful for any person to offer or sell a security in an issuer transaction without first having obtained a qualification of such security from the Commissioner of Corporations of the State of California, unless such security is exempted. [¶] In order to prove the commission of such crime, each of the following elements must be proved: [¶] 1. That a security was offered or sold in this state; [¶] 2. That such conduct was willful; and [¶] 3. That at the time the security was offered or sold, such offer or sale had not been qualified with the Commissioner of Corporations of the State of California."

The court granted appellant's request for instructions defining "sale" and "offer," as well as "issuer" and "issuer transaction." Appellant also requested and received an instruction which stated: "The fact that a person encourages a transaction that results in a sale does not necessarily make that person a seller."

These instructions properly addressed the issues raised pertaining to a violation of section 25110

Section 25401 reads, as pertinent: "It is unlawful for any person to offer or sell a security. . . ." (Italics added.) Again, there is no requirement that the person who does the selling be an "issuer" or agent of an "issuer." Also, section 25540, which sets out the penalties for violation of each of these statutes, uses the word "person" and has no reference directly or indirectly to the term "issuer" or agent of an "issuer."

We conclude that an instruction on agency would have been surplusage and could have confused the jury.

(4) Finally, appellant contends that the trial court erred in refusing to instruct on aiding and abetting with respect to both counts. He argues as follows: "Mr. Corey's liability should have been determined by the application of the principles of aiding and abetting, since he was not an issuer or an agent of the issuer. Following People v. Beeman (1984) 35 Cal.3d 547 [ 199 Cal.Rptr. 60, 674 P.2d 1318], aiding and abetting is a general intent theory of liability and a defendant may not be found criminally liable unless he had knowledge of the unlawful purpose and acted in furtherance of that purpose. Therefore, the evidence of Mr. Corey's mental state was essential in proving his guilt." (Italics added.)

With regard to proof of a violation of section 25401, Simon has now injected the element of scienter. Therefore, appellant's argument is moot as to that section.

With regard to section 25110, the prosecutor tried appellant solely on the theory that he was a direct seller of an unregistered security. Appellant's defense relied upon a theory that he was not a seller, that his acts merely facilitated the transaction. Therefore, the concept of aiding and abetting was not relevant to the issues in the case and there was no need to instruct on it.

DISPOSITION

The judgment of conviction as to section 25401 is reversed and the matter is remanded for retrial. Otherwise, the judgment is affirmed.

Woods (A.M.), P.J., and Epstein, J., concurred.

A petition for a rehearing was denied June 23, 1995.