Series 79 practice questionmediumProspectus Requirements
Under Section 12(a)(2) of the Securities Act, who may bear civil liability for material misstatements or omissions in a prospectus used in an offering?
- AOnly the issuer and its officers
- BOnly the company’s legal counsel
- CAny person who offers or sells the security, including underwriters✓ Correct answer
- DOnly the company’s board of directors
Explanation
Why C — Any person who offers or sells the security, including underwriters
Section 12(a)(2) liability extends to anyone who offers or sells securities, including underwriters and sellers. The trap is assuming only the issuer or its officers are liable.
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
- An underwriter participating in a follow-on equity offering discovers a discrepancy between the issuer's disclosed…
- In a registered public offering, which of the following best demonstrates an underwriter’s reasonable investigation of…
- Which of the following is a primary risk for issuers conducting overnight marketed follow-on offerings?
- A company is conducting a private placement under Regulation D, Rule 506(c), and is relying on general solicitation.…
- Which type of document review is LEAST likely to provide evidence supporting an underwriter's due diligence defense…
- Which of the following is a necessary step for underwriters to establish a due diligence defense under Section 11?
- What is the most common method underwriters use to allocate IPO shares to institutional investors during book-building?
- Which of the following follow-on offerings is MOST likely to be subject to Blue Sky registration requirements in…