15 U.S.C. § 77l

Civil liabilities arising in connection with prospectuses and communications

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(a) In generalAny person who—(1) offers or sells a security in violation of section 77e of this title, or(2) offers or sells a security (whether or not exempted by the provisions of section 77c of this title, other than paragraphs (2) and (14) of subsection (a) of said section), by the use of any means or instruments of transportation or communication in interstate commerce or of the mails, by means of a prospectus or oral communication, which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading (the purchaser not knowing of such untruth or omission), and who shall not sustain the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission,shall be liable, subject to subsection (b), to the person purchasing such security from him, who may sue either at law or in equity in any court of competent jurisdiction, to recover the consideration paid for such security with interest thereon, less the amount of any income received thereon, upon the tender of such security, or for damages if he no longer owns the security.(b) Loss causation

In an action described in subsection (a)(2), if the person who offered or sold such security proves that any portion or all of the amount recoverable under subsection (a)(2) represents other than the depreciation in value of the subject security resulting from such part of the prospectus or oral communication, with respect to which the liability of that person is asserted, not being true or omitting to state a material fact required to be stated therein or necessary to make the statement not misleading, then such portion or amount, as the case may be, shall not be recoverable.

(May 27, 1933, ch. 38, title I, § 12, 48 Stat. 84; Aug. 10, 1954, ch. 667, title I, § 9, 68 Stat. 686; Pub. L. 104–67, title I, § 105, Dec. 22, 1995, 109 Stat. 757; Pub. L. 106–554, § 1(a)(5) [title II, § 208(a)(3)], Dec. 21, 2000, 114 Stat. 2763, 2763A–435.)Editorial NotesAmendments

2000—Subsec. (a)(2). Pub. L. 106–554 substituted “paragraphs (2) and (14)” for “paragraph (2)”.

1995—Pub. L. 104–67 designated existing provisions as subsec. (a), inserted heading, inserted “, subject to subsection (b),” after “shall be liable” in concluding provisions, and added subsec. (b).

1954—Act Aug. 10, 1954, inserted “offers or” before “sells” in pars. (1) and (2).

Statutory Notes and Related SubsidiariesEffective Date of 1995 Amendment

Pub. L. 104–67, title I, § 108, Dec. 22, 1995, 109 Stat. 758, provided that: “The amendments made by this title [enacting sections 77z–1, 77z–2, 78u–4, and 78u–5 of this title and amending this section and sections 77t, 78o, 78t, and 78u of this title and section 1964 of Title 18, Crimes and Criminal Procedure] shall not affect or apply to any private action arising under title I of the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq.] or title I of the Securities Act of 1933 [15 U.S.C. 77a et seq.], commenced before and pending on the date of enactment of this Act [Dec. 22, 1995].”

Effective Date of 1954 Amendment

Amendment by act Aug. 10, 1954, effective 60 days after Aug. 10, 1954, see note under section 77b of this title.

Construction of 1995 Amendment

Nothing in amendment by Pub. L. 104–67 to be deemed to create or ratify any implied right of action, or to prevent Commission, by rule or regulation, from restricting or otherwise regulating private actions under Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), see section 203 of Pub. L. 104–67, set out as a Construction note under section 78j–1 of this title.

Notes of Decisions

Cited in 341 cases (110 in the last 5 years), 1941–2026 · leading case: Fed. Hous. Fin. Agency v. Nomura Holding Am., Inc., 873 F.3d 85 (2d Cir. 2017).

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Fed. Hous. Fin. Agency v. Nomura Holding Am., Inc., 873 F.3d 85 (2d Cir. 2017). · cites it 14× “See 15 U.S.C. § 77l(a); Wigand v. Flo-Tek, Inc.”

Grayco Resources, Inc. v. Poole, 500 So. 2d 1030 (Ala. 1986). · cites it 11× “Plaintiff submits that the trial judge: 1) failed to orally charge the jury regarding both subsections (a)(1) and (a)(2), Code 1975, § 8-6-19 (Plaintiffs' requested charge 8), 1 *Page 1034 2) failed to properly charge the jury regarding subsection (1) of Section 12 of the…”

Piazza v. Kirkbride, 785 S.E.2d 695 (N.C. Ct. App. 2016). · cites it 3× “15 U.S.C. § 77l(a)(2). The language of section 12(a)(2) was codified in section 410 of the Uniform Securities Act of 1956, which North Carolina first adopted in 1973.”

Royal Am. Managers, Inc. v. Irc Holding Corp. & Joseph Ambriano, Cross-Appellants, Gerald Dolman, Cross-Appellee, 885 F.2d 1011 (2d Cir. 1989). · cites it 3× “10b-5 (1988); section 12(2) of the Securities Act of 1933, 15 U.S.C. § 77l(2) (1982); and common law fraud.”

Balestra v. ATBCOIN LLC, 380 F. Supp. 3d 340 (S.D. Ill. 2019). · cites it 2× “Application Plaintiff alleges two claims under the Securities Act: first, that all Defendants violated Section 12(a), 15 U.S.C. § 77l(a), by offering and selling unregistered securities in the form of ATB Coins; and second, that Ng and Hoover are also liable as "control persons"…”

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991). “; and § 12(2) of the Securities Act of 1933, 15 U. S. C. § 77l(2). See Mitsubishi Motors Corp.”

Rodriguez De Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477 (1989). “In their complaint they *479 pleaded various violations of federal and state law, including claims under § 12(2) of the Securities Act of 1933, 15 U. S. C. § 77l(2), and claims under three sections of the Securities Exchange Act of 1934.”

Fed. Sec. L. Rep. P 97,862 G. A. Thompson & Co., Inc. v. Herbert Partridge, Robert M. Presley, Frank Andrews & C. Thomas Murphy, 636 F.2d 945 (5th Cir. 1981). · cites it 2× “Moreover, neither the defendants nor Lincoln did or could tender the GNMA securities at issue, a requirement for rescission under 15 U.S.C. § 77l. Moses v. Michael, 292 F.”

In Re Enron Corp. Sec., Derivative & Erisa Lit., 761 F. Supp. 2d 504 (S.D. Tex. 2011). · cites it 2× “Plaintiffs, who purchased only Osprey Certificates, did not purchase the Notes, which were sold through Rule 144A and Reg S offerings and formal offering memoranda.”

Fiyyaz Pirani v. Slack Tech., Inc., 13 F.4th 940 (9th Cir. 2021). · cites it 3× “by means of a prospectus,” 15 U.S.C. § 77l(a)(2), to include registered or unregistered securities offered in the direct listing.”

Pinter v. Dahl, 486 U.S. 622 (1988). “*627 When the venture failed and their interests proved to be worthless, respondents brought suit against Pinter in the United States District Court for the Northern District of Texas, seeking rescission under § 12(1) of the Securities Act, 15 U. S. C. §77l(1), for the .…”

SEC v. Phan, 500 F.3d 895 (9th Cir. 2007). “" 15 U.S.C. § 77l(a) (emphasis added). The Supreme Court keyed in on the "from him" language of Section 12 in rejecting our "necessary participant"/"substantial factor" test: "Those courts that have adopted the approach have not attempted to ground their analysis in statutory…”

Show all 341 citing cases →

— 15 U.S.C. § 77l(1) — 22 cases

Dietrich v. Bauer, 192 F.R.D. 119 (S.D.N.Y. 2000).

Dyer v. E. Trust & Banking Co., 336 F. Supp. 890 (D. Me. 1971).

In Re Rexplore, Inc. Sec. Litig., 671 F. Supp. 679 (N.D. Cal. 1987).

Gasner v. Bd. of Supervisors, 103 F.3d 351 (4th Cir. 1997).

— 15 U.S.C. § 77l(1)(a) — 1 case

Foster v. Ledbetter (Bankr. S.D. Florida 2020).

— 15 U.S.C. § 77l(2) — 63 cases

Royal Am. Managers, Inc. v. Irc Holding Corp. & Joseph Ambriano, Cross-Appellants, Gerald Dolman, Cross-Appellee, 885 F.2d 1011 (2d Cir. 1989). “10b-5 (1988); section 12(2) of the Securities Act of 1933, 15 U.S.C. § 77l(2) (1982); and common law fraud.”

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991). “; and § 12(2) of the Securities Act of 1933, 15 U. S. C. § 77l(2). See Mitsubishi Motors Corp.”

Borowiec v. GATEWAY 2000, INC., 808 N.E.2d 957 (Ill. 2004).

Reves v. Ernst & Young, 494 U.S. 56 (1990).

— 15 U.S.C. § 77l(a) — 34 cases

Fed. Hous. Fin. Agency v. Nomura Holding Am., Inc., 873 F.3d 85 (2d Cir. 2017). “See 15 U.S.C. § 77l(a); Wigand v. Flo-Tek, Inc.”

Balestra v. ATBCOIN LLC, 380 F. Supp. 3d 340 (S.D. Ill. 2019). “Application Plaintiff alleges two claims under the Securities Act: first, that all Defendants violated Section 12(a), 15 U.S.C. § 77l(a), by offering and selling unregistered securities in the form of ATB Coins; and second, that Ng and Hoover are also liable as "control persons"…”

Genesee Cnty. Employees' Ret. Sys. v. Thornburg Mortg. Sec. Trust, 825 F. Supp. 2d 1082 (D.N.M. 2011).

Sec. & Exch. Comm'n v. Tambone, 550 F.3d 106 (1st Cir. 2008).

— 15 U.S.C. § 77l(a)(1) — 46 cases

Williams v. Binance, 96 F.4th 129 (2d Cir. 2024).

Jacob Zowie Thomas Rensel v. Centra Tech, Inc., 2 F.4th 1359 (11th Cir. 2021).

Albert Parks v. BitConnect Int'l PLC, 25 F.4th 1341 (11th Cir. 2022).

In re Nat'l Century Fin. Enter., Inc., Inv. Litig., 846 F. Supp. 2d 828 (S.D. Ohio 2012).

— 15 U.S.C. § 77l(a)(2) — 114 cases

Fed. Hous. Fin. Agency v. Nomura Holding Am., Inc., 873 F.3d 85 (2d Cir. 2017). “See 15 U.S.C. § 77l(a); Wigand v. Flo-Tek, Inc.”

Piazza v. Kirkbride, 785 S.E.2d 695 (N.C. Ct. App. 2016). “15 U.S.C. § 77l(a)(2). The language of section 12(a)(2) was codified in section 410 of the Uniform Securities Act of 1956, which North Carolina first adopted in 1973.”

Fiyyaz Pirani v. Slack Tech., Inc., 13 F.4th 940 (9th Cir. 2021). “by means of a prospectus,” 15 U.S.C. § 77l(a)(2), to include registered or unregistered securities offered in the direct listing.”

Panircelvan Kaliannan v. Ee Liang, 2 F.4th 727 (8th Cir. 2021).

In re Plains All Am. Pipeline, L.P. Sec. Litig., 307 F. Supp. 3d 583 (S.D. Tex. 2018).

— 15 U.S.C. § 77l(b) — 8 cases

Fed. Hous. Fin. Agency v. Nomura Holding Am., Inc., 873 F.3d 85 (2d Cir. 2017). “See 15 U.S.C. § 77l(a); Wigand v. Flo-Tek, Inc.”

Tsereteli v. Residential Asset Securitization Trust 2006-A8, 283 F.R.D. 199 (S.D.N.Y. 2012).

Arkansas Pub. Employees v. GT Solar, 2009 DNH 149 (D.N.H. 2009).

Gasner v. Bd. of Supervisors, 103 F.3d 351 (4th Cir. 1997).

In Re SmileDirectClub, Inc. Sec. Litig. (Tenn. Ct. App. 2022).

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