Liability – Who may also be liable under the Securities Act? – (69)

sale of shares of a company’s stock is based. Liability can also arise from the failure to comply with registration requirements or to supply or make available a final prospectus to investors. Purchasers of a company’s stock in a registered public offering have a right of action under Section 11 of the Securities Act for an untrue statement of material fact or an omission to state a material fact in a registration statement. Section 11 imposes liability on the issuer, each person who signs the registration statement, each director, the company’s accountants (and certain other experts) and the underwriters. Purchasers also have a right of action under Section 12(a)(2) for false or misleading statements that are material in a prospectus and in oral statements. The SEC may bring actions under Section 17 of the Securities Act and Section 10(b) and Rule 10b-5 under the Exchange Act.
Under the Securities Act, the company is absolutely liable for material misstatements or omissions in the registration statement, regardless of good faith or the exercise of due diligence. Directors and officers of the company, however, may have certain due diligence defenses, as do underwriters, the company’s accountants and other experts and controlling persons.
Who may also be liable under the Securities Act?
If a company’s registration statement contains an untrue statement of a material fact or omits to state a material fact required to be stated in it (or that is necessary to make the statements not misleading), any purchaser of the company’s stock can sue the issuer and the following persons:
anyone who signed the registration statement (the registration statement is signed by the company’s chief executive, principal financial

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