Defendants cannot assert a due diligence defense against liabilities arising from the violation of Section 11 of the Securities Act of 1933.

Question

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Defendants can assert a due diligence defense against liabilities arising from the violation of Section 11 of the Securities Act of 1933. The defense requires the defendant to prove that they conducted a reasonable investigation into the accuracy of the statements made in the offering materials and had reasonable grounds to believe that the statements were true at the time they were made.

Defendants Cannot Assert a Due Diligence Defense Against Liabilities Arising