How does Section 12(a)(1) liability differ from Section 11 liability?

Why A — 12(a)(1): Section 5 sale violations; Section 11: registration statement misstatements

Section 12(a)(1) creates strict liability for any person who offers or sells a security in violation of Section 5's registration requirements (i.e., selling unregistered securities without an applicable exemption). The remedy is rescission (the buyer can demand their money back). Section 11, by contrast, applies to registered offerings where the registration statement contains material misstatements or omissions. Section 12(a)(1) does not require proof of materiality or reliance; the mere violation of the registration requirement is sufficient for liability.