The video discusses Section 11 liability related to securities, focusing on material misstatements or omissions in disclosure documents required by the SEC. It explains that purchasers can seek damages without proving reliance on the misinformation. The video also covers joint and several liabilities for issuers and signatories, and the due diligence defense available to third parties, though difficult for insiders to claim due to their access to information.

What can a purchaser of securities seek under a Section 11 action?

• A refund of the purchase price plus interest

• A replacement of the securities

• An apology from the issuer

• A waiver of future liabilities

Under Section 11, what must a purchaser prove regarding the misstatements in the disclosure documents?

• That the misstatements were intentional

• That they relied on the misstatements

• That the issuer was unaware of the misstatements

• Nothing, as reliance is not required

Who can be held liable under Section 11 for misstatements in disclosure documents?

• Only third-party auditors

• Only the signatories

• The issuer and any controlling parties

• Only the issuer

What is the due diligence defense in the context of Section 11 liability?

• A defense that allows issuers to claim ignorance

• A defense for third parties who can prove they verified the information

• A defense that applies only to signatories

• A defense that exempts all parties from liability

Why is it challenging for insiders to use the due diligence defense?

• They lack access to necessary information

• They have a duty of care and access to all information

• They are not allowed to use this defense

• They are automatically exempt from liability