Fail to Comply with Securities Exemption - Explained

The video tutorial explains the rights of a purchaser under Section 12 to rescind a securities purchase and recover damages. It discusses the concept of selling a put, where the issuer may be forced to repurchase securities. Protections for issuers who deviate from rule-based exemptions are outlined, focusing on minor procedural deviations. The video also covers defenses available to issuers against actions by private investors or the SEC for failing to register securities.

What can a purchaser recover in a civil action under Section 12?

• Only the purchase price of the securities

• Only damages incurred

• The purchase price and any damages incurred

• Interest from the time of purchase only

What does 'selling a put' allow the purchaser to do?

• Increase the value of the securities

• Compel the issuer to repurchase the security or pay damages

• Demand a refund of the purchase price

• Force the issuer to sell more securities

Why might an issuer be required to repurchase securities?

• Due to a rise in market value

• If the securities were sold at a loss

• If the securities are subject to a civil action

• To comply with new regulations

What can justify a deviation from rule-based exemptions?

• The deviation was unreported

• The deviation was minor and procedural

• The deviation was intentional

• The deviation was extreme

Under what condition might an issuer defend against a civil action by the SEC?

• If they ignored the exemption rules

• If they can show good faith compliance with procedural rules

• If they failed to register the securities

• If they sold securities to non-accredited investors