No Rescission Without Privity

California Corporations Code Section 25401 declares unlawful the sale or purchase of a security by means of a written or oral communication that includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. Section 25401, however, does not prescribe any particular remedies.

Corporations Code Section 25501 provides that a person who violates Section 25401 is liable either for rescission or for damages (if the plaintiff or the defendant, as the case may be, no longer owns the security). Section 25504 provides for secondary liability against persons in addition to a “seller” of securities if they “control” the seller. Similarly, Section 25504.1 provides for secondary liability against persons who “assist” sellers in violations of the securities laws (commonly referred to as “aiders and abettors”).

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Allen Matkins Leck Gamble Mallory & Natsis LLP | Attorney Advertising

Written by:

more+
less-

Allen Matkins Leck Gamble Mallory & Natsis LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×
×