Civil Liability Under Section 12 of the 1933 Act

The video tutorial discusses issuer liability under Sections 11 and 12A, focusing on civil actions when issuers fail to comply with registration requirements or when there are material omissions in disclosure documents. It highlights that purchasers do not need to rely on disclosures, but they must not be aware of inadequacies at the time of purchase. The tutorial explains the potential for recovering purchase prices and damages, emphasizing the impact on businesses during original securities issuance.

Under what circumstances does Section 12A allow for civil action against an issuer?

• If the issuer changes its business model.

• If the issuer's stock price falls significantly.

• If the issuer is involved in fraudulent activities.

• If the issuer fails to comply with registration requirements or there is a material omission of fact.

What is not required for a purchaser to take civil action under the discussed sections?

• A valid purchase receipt.

• Evidence of financial loss.

• Proof of reliance on the disclosures.

• A legal representative.

What must the purchaser be unaware of at the time of purchase to take action?

• The issuer's future plans.

• The issuer's financial performance.

• Inadequacies or material misstatements in the disclosures.

• The market trends.

What can a purchaser recover through a cause of action?

• Only the purchase price.

• Future profits from the issuer.

• The purchase price plus damages and interest.

• Legal fees.

To whom does the cause of action generally apply?

• Only institutional investors.

• All investors in the market.

• Subsequent purchasers of securities.

• Purchasers of securities during the original issuance.