Question

To be successful in a civil action under Section 11 of the Securities Act of 1933 concerning liability for a misleading registration statement, the plaintiff must prove

Column 1 - Defendant's Intent to Deceive and Column 2 - Plaintiff's Reliance on the Registration Statement.
a) Yes No
b) No Yes
c) No No
d) Yes Yes

Answer 1

Under Section 11 of the Securities Act of 1933, plaintiffs do not need to prove either the defendant's intent to deceive or their own reliance on a misleading registration statement to prevail in a civil action. Option c is correct.

Step-by-step explanation:

To be successful in a civil action under Section 11 of the Securities Act of 1933 concerning liability for a misleading registration statement, a plaintiff does not need to prove the defendant's intent to deceive. Moreover, the plaintiff does not need to prove that they relied on the registration statement.

Instead, Section 11 establishes a standard of strict liability for material misstatements or omissions in a registration statement, meaning that if the registration statement contained inaccuracies, those responsible for the statement can be held liable whether they intended to deceive investors or not, and regardless of whether the investor relied on the misleading information. Therefore, the correct answer to the question is c) No No.