All defendants except the issuer may assert a due diligence defense against the imposition of Section 11 liability.

Question

Quizplus · Accepted Answer

This is true. Under Section 11 of the Securities Act of 1933, a due diligence defense is available to all defendants except the issuer. The issuer is strictly liable for material misstatements or omissions in a registration statement. However, other defendants, such as underwriters or directors, may be held liable under Section 11, but may defend themselves by showing that they conducted a reasonable investigation and had reasonable grounds to believe that the registration statement was accurate and complete.

All Defendants Except the Issuer May Assert a Due Diligence