Series 79 practice questionmediumDue Diligence Defense
Which type of issuer is generally not able to rely on the due diligence defense under Section 11?
- AA first-time issuer
- BA seasoned issuer with internal controls issues
- CAn underwriter for a shelf registration
- DThe actual issuer of the securities✓ Correct answer
Explanation
Why D — The actual issuer of the securities
The issuer itself cannot use the due diligence defense; the defense is only available to non-issuer parties like underwriters and directors. The issuer is strictly liable for material misstatements.
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