What is the statute of limitations for claims under Section 11 of the Securities Act?
- AOne year from discovery, capped at three years from offering✓ Correct answer
- BTwo years from discovery, with no outer limit
- CFive years from the offering date
- DSix months from the discovery of the misstatement
Why A — One year from discovery, capped at three years from offering
Section 13 of the Securities Act establishes a one-year statute of limitations for Section 11 claims, beginning from the date the plaintiff discovered or should have discovered the misstatement or omission. However, there is an absolute three-year statute of repose from the date the security was bona fide offered to the public. This means that even if the misstatement is not discovered until four years after the offering, the claim would be time-barred. These time limitations encourage investors to be vigilant and discourage stale claims.
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.
- During which period is the quiet period restriction most significant in an IPO?
- How does Section 12(a)(1) liability differ from Section 11 liability?
- A company planning an IPO gives a presentation at an industry conference two weeks before filing its S-1. The CEO…
- An investor purchases 10,000 shares at the $22 IPO price. The stock declines to $14 after it is revealed that the…
- Under Rule 163A, the safe harbor for pre-filing communications, what conditions must be met for an issuer's…
- Under Section 11 of the Securities Act, which of the following parties can be held liable for material misstatements in…
- After an IPO, what is the research quiet period during which syndicate member analysts are restricted from publishing…
- In the context of due diligence, what is a '10b-5 letter'?