Under the due diligence defense to a Section 11 action under the Securities Act of 1933,which of the following is true?

Question

Quizplus · Accepted Answer

Any defendant except the issuer can assert a due diligence defense. The due diligence defense is an affirmative defense that can be asserted by any defendant other than the issuer in a Section 11 action. The defense requires the defendant to show that they conducted a reasonable investigation and had reasonable grounds to believe that the statements in the registration statement were true at the time the registration statement was filed. The existence of the defense does not replace criminal liability with a lesser civil liability.

Under the Due Diligence Defense to a Section 11 Action