Floss Has Just Earned His Dental Degree and Wants to Establish

Floss has just earned his dental degree and wants to establish a private dental practice. He has had a bit of sticker shock at the price of all the equipment this will require him to purchase. Because he still has a large student loan to repay, he has been unable to borrow any money from his financial institution. To raise capital, he decides to sell fifty ownership interests of $1,000 each to interested investors and takes out a full page ad in a local newspaper to advertise this investment. In this scenario:

A) Dr. Floss has not violated any laws since the notes have a face value of only $1,000 and he is selling them to a maximum of 50 different investors.
B) Dr. Floss can be charged with criminal fraud under the provisions of the Securities Exchange Act of 1934.
C) Dr. Floss has violated the provisions of the Securities Act of 1933 and may face civil penalties.
D) Dr. Floss has not violated any laws since these ownership interests do not fall under the definition of a security.