Dryler Corporation sold unregistered securities that were required under the 1933 Act to be registered. Howlett-Midland Corporation used an outdated prospectus in the sale of its securities. Discuss the civil liability of the companies for these acts.
Section 12(a)(1) of the 1933 Act imposes express civil liability
for the sale of an unregistered security
that is required to be registered, the sale of a registered
security without delivery of a prospectus, the
sale of a security by use of an outdated prospectus, or the offer
of a sale before the filing of the regis-
tration statement. Liability is strict or absolute, because there
are no defenses. The person who purchases a security sold in
violation of this provision has the right to tender it back to the
seller and recover the purchase price. If the purchaser no longer
owns the security, he may recover monetary damages from the
seller.
Thanks
Get Answers For Free
Most questions answered within 1 hours.