Series 79 practice questionmediumProspectus Requirements
Which party is primarily liable under Section 12(a)(2) for material misstatements or omissions in a prospectus delivered to investors in a registered public offering?
- AThe company’s outside auditors
- BThe company’s directors only
- CSeller of the security, including underwriters who offer or sell✓ Correct answer
- DAll employees of the issuer
Explanation
Why C — Seller of the security, including underwriters who offer or sell
Section 12(a)(2) imposes liability on sellers, meaning anyone who offers or sells the security, including underwriters. Auditors and all employees are not automatically liable unless they are directly involved in the sale or misstatement.
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