Series 79 practice questionmediumProspectus Requirements
A prospectus omits a material fact and an investor suffers a loss. Who may be held liable under Section 12(a)(2) of the Securities Act?
- AOnly the issuer
- BOnly the managing underwriter
- CAny person who offers or sells the security, including underwriters✓ Correct answer
- DOnly the company’s directors
Explanation
Why C — Any person who offers or sells the security, including underwriters
Section 12(a)(2) liability extends to any offeror or seller, including underwriters. Limiting liability to the issuer or managers does not match the statute.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 995+ Series 79 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Underwriting & New Financing questions
- Which step is most critical for an underwriter to establish the reasonableness of its investigation in asserting a due…
- Who is primarily responsible for demonstrating a due diligence defense in a registered public offering?
- During an IPO, an underwriter attempts to stabilize a stock by purchasing in the open market at a price above the…
- A company conducting a Rule 506(c) private placement wishes to advertise the offering. What condition must be satisfied…
- An issuer with an effective automatic shelf registration wishes to conduct an at-the-market follow-on program. Which…
- In a syndicate, which member is typically responsible for market stabilization activities post-offering?
- When forming an underwriting syndicate, which document outlines the liability and profit-sharing arrangement among…
- Absent an applicable Securities Act research safe harbor or JOBS Act/FINRA exception, what restriction generally…