Civil liabilities arising in connection with prospectuses, communications and reports.
Section 13
SEC. 13. Civil liabilities arising in connection with prospectuses, communications and reports.— (a) Any person who— offers to sell or sells a security in violation of Chapter II, or offers to sell or sells a security, whether or not exempted by the provisions of this Act, by the use of any means or instruments of transportation or communication, 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 fail in 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 to the person purchasing such security from him, who may sue, 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. Exemplary damages may likewise be awarded in cases of bad faith, fraud, malevolence or wantonness. (b) Any person who shall make or cause to be made any statement in any report, or document filed pursuant to this Chapter or any rule or regulation thereunder, which statement was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, shall be liable to any person who, not knowing that such statement was false or misleading, and relying upon such statement, shall have purchased or sold a security at a price which was affected by such statement, for damages caused by such reliance, unless the person sued shall prove that he acted in good faith and had no knowledge that such statement was false or misleading. In any such suit the court may discretion, require an undertaking for the payment of the costs of such suit, and assess reasonable costs, including reasonable attorney's fees against either party litigant. Every person who becomes liable to make payment under this subsection may recover contribution as in cases of contract from any person who, if joined in the original suit, would have been liable to make the same payment. (n)