Series 79 practice questionmediumIPO Process
During an IPO roadshow, the CEO gives institutional investors a revenue projection. What is the principal liability concern?
- AThe CEO should not attend roadshow meetings
- BProjections can only be shared with retail investors
- CIf materially false or misleading, the oral statement may create Section 12(a)(2) liability✓ Correct answer
- DRevenue projections are always prohibited during the roadshow
Explanation
Why C — If materially false or misleading, the oral statement may create Section 12(a)(2) liability
Oral offers are permitted after filing. The issue is whether the projection is materially false or misleading, not its mere absence from the preliminary prospectus.
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