Final answer:
The statement regarding plaintiffs' ability to recover damages for false or misleading information in a prospectus without having read it is true, as the law holds individuals and businesses accountable for what they claim in their securities documentation.
Step-by-step explanation:
False or misleading information
The statement 'false or misleading information in a prospectus can result in the recovery of damages by plaintiffs even if they have not read or reviewed it,' is true. The law holds businesses and individuals responsible for the claims they make about securities, thereby protecting investors. As reinforced by FTC guidelines and legal precedents like Curtis Publishing Co. v. Butts, factual inaccuracies or misrepresentations that can be construed as fraudulent can lead to liability, regardless of whether the prospectus was actually read by the investor.
Following legal precedent, liability can arise from the publication of information that is false and misleading. The constitutional guarantees do not protect false statements made with actual malice or reckless disregard for the truth in commercial transactions. Hence, accuracy in a prospectus is crucial since it forms the basis of an investor's decision-making, and misinformation can lead to legal consequences for those issuing the prospectus.
In the context of false or misleading information in a prospectus, plaintiffs can recover for harm done even if the prospectus is not read or reviewed. This is because false or misleading information can still cause harm and mislead potential investors, regardless of whether they actually read the prospectus or not.