409.5-509. (a) Enforcement of civil liability under this section issubject to the Securities Litigation Uniform Standards Act of 1998.
(b) A person is liable to the purchaser if the person sells a securityin violation of section 409.3-301 or, by means of an untrue statement of amaterial fact or an omission to state a material fact necessary in order tomake the statement made, in light of the circumstances under which it is made,not misleading, the purchaser not knowing the untruth or omission and theseller not sustaining the burden of proof that the seller did not know and, inthe exercise of reasonable care, could not have known of the untruth oromission. An action under this subsection is governed by the following:
(1) The purchaser may maintain an action to recover the considerationpaid for the security, less the amount of any income received on the security,and interest at the rate of eight percent per year from the date of thepurchase, costs, and reasonable attorneys' fees determined by the court, uponthe tender of the security, or for actual damages as provided in paragraph(3).
(2) The tender referred to in paragraph (1) may be made any time beforeentry of judgment. Tender requires only notice in a record of ownership ofthe security and willingness to exchange the security for the amountspecified. A purchaser that no longer owns the security may recover actualdamages as provided in paragraph (3).
(3) Actual damages in an action arising under this subsection are theamount that would be recoverable upon a tender less the value of the securitywhen the purchaser disposed of it, and interest at the rate of eight percentper year from the date of the purchase, costs, and reasonable attorneys' feesdetermined by the court.
(c) A person is liable to the seller if the person buys a security bymeans of an untrue statement of a material fact or omission to state amaterial fact necessary in order to make the statement made, in light of thecircumstances under which it is made, not misleading, the seller not knowingof the untruth or omission, and the purchaser not sustaining the burden ofproof that the purchaser did not know, and in the exercise of reasonable care,could not have known of the untruth or omission. An action under thissubsection is governed by the following:
(1) The seller may maintain an action to recover the security, and anyincome received on the security, costs, and reasonable attorneys' feesdetermined by the court, upon the tender of the purchase price, or for actualdamages as provided in paragraph (3).
(2) The tender referred to in paragraph (1) may be made any time beforeentry of judgment. Tender requires only notice in a record of the presentability to pay the amount tendered and willingness to take delivery of thesecurity for the amount specified. If the purchaser no longer owns thesecurity, the seller may recover actual damages as provided in paragraph (3).
(3) Actual damages in an action arising under this subsection is thedifference between the price at which the security was sold and the value thesecurity would have had at the time of the sale in the absence of thepurchaser's conduct causing liability, and interest at the rate of eightpercent per year from the date of the sale of the security, costs, andreasonable attorneys' fees determined by the court.
(d) A person acting as a broker-dealer or agent that sells or buys asecurity in violation of section 409.4-401(a), 409.4-402(a), or 409.5-506 isliable to the customer. The customer, if a purchaser, may maintain an actionfor recovery of actual damages as specified in subsections (b)(1) to (3), or,if a seller, for a remedy as specified in subsections (c)(1) to (3).
(e) A person acting as an investment adviser or investment adviserrepresentative that provides investment advice for compensation in violationof section 409.4-403(a), 409.4-404(a), or 409.5-506 is liable to the client.The client may maintain an action to recover the consideration paid for theadvice, interest at the rate of eight percent per year from the date ofpayment, costs, and reasonable attorneys' fees determined by the court.
(f) A person that receives directly or indirectly any consideration forproviding investment advice to another person and that employs a device,scheme, or artifice to defraud the other person or engages in an act,practice, or course of business that operates or would operate as a fraud ordeceit on the other person is liable to the other person. An action underthis subsection is governed by the following:
(1) The person defrauded may maintain an action to recover theconsideration paid for the advice and the amount of any actual damages causedby the fraudulent conduct, interest at the rate of eight percent per year fromthe date of the fraudulent conduct, costs, and reasonable attorneys' feesdetermined by the court, less the amount of any income received as a result ofthe fraudulent conduct.
(2) This subsection does not apply to a broker-dealer or its agents ifthe investment advice provided is solely incidental to transacting business asa broker-dealer and no special compensation is received for the investmentadvice.
(g) The following persons are liable jointly and severally with and tothe same extent as persons liable under subsections (b) to (f):
(1) A person that directly or indirectly controls a person liable undersubsections (b) to (f), unless the controlling person sustains the burden ofproof that the person did not know, and in the exercise of reasonable carecould not have known, of the existence of conduct by reason of which theliability is alleged to exist;
(2) An individual who is a managing partner, executive officer, ordirector of a person liable under subsections (b) to (f), including anindividual having a similar status or performing similar functions, unless theindividual sustains the burden of proof that the individual did not know and,in the exercise of reasonable care could not have known, of the existence ofconduct by reason of which the liability is alleged to exist;
(3) An individual who is an employee of or associated with a personliable under subsections (b) to (f) and who materially aids the conduct givingrise to the liability, unless the individual sustains the burden of proof thatthe individual did not know and, in the exercise of reasonable care could nothave known, of the existence of conduct by reason of which the liability isalleged to exist; and
(4) A person that is a broker-dealer, agent, investment adviser, orinvestment adviser representative that materially aids the conduct giving riseto the liability under subsections (b) to (f), unless the person sustains theburden of proof that the person did not know and, in the exercise ofreasonable care could not have known, of the existence of conduct by reason ofwhich liability is alleged to exist.
(h) A person liable under this section has a right of contribution as incases of contract against any other person liable under this section for thesame conduct.
(i) A cause of action under this section survives the death of anindividual who might have been a plaintiff or defendant.
(j) A person may not obtain relief:
(1) Under subsection (b) for violation of section 409.3-301, or undersubsection (d) or (e), unless the action is instituted within one year afterthe violation occurred; or
(2) Under subsection (b), other than for violation of section 409.3-301,or under subsection (c) or (f), unless the action is instituted within theearlier of two years after discovery of the facts constituting the violationor five years after the violation.
(k) A person that has made, or has engaged in the performance of, acontract in violation of this act or a rule adopted or order issued under thisact, or that has acquired a purported right under the contract with knowledgeof conduct by reason of which its making or performance was in violation ofthis act, may not base an action on the contract.
(l) A condition, stipulation, or provision binding a person purchasingor selling a security or receiving investment advice to waive compliance withthis act or a rule adopted or order issued under this act is void.
(m) The rights and remedies provided by this act are in addition to anyother rights or remedies that may exist, but this act does not create a causeof action not specified in this section or section 409.4-411(e).
409.5-509. (a) Enforcement of civil liability under this section issubject to the Securities Litigation Uniform Standards Act of 1998.
(b) A person is liable to the purchaser if the person sells a securityin violation of section 409.3-301 or, by means of an untrue statement of amaterial fact or an omission to state a material fact necessary in order tomake the statement made, in light of the circumstances under which it is made,not misleading, the purchaser not knowing the untruth or omission and theseller not sustaining the burden of proof that the seller did not know and, inthe exercise of reasonable care, could not have known of the untruth oromission. An action under this subsection is governed by the following:
(1) The purchaser may maintain an action to recover the considerationpaid for the security, less the amount of any income received on the security,and interest at the rate of eight percent per year from the date of thepurchase, costs, and reasonable attorneys' fees determined by the court, uponthe tender of the security, or for actual damages as provided in paragraph(3).
(2) The tender referred to in paragraph (1) may be made any time beforeentry of judgment. Tender requires only notice in a record of ownership ofthe security and willingness to exchange the security for the amountspecified. A purchaser that no longer owns the security may recover actualdamages as provided in paragraph (3).
(3) Actual damages in an action arising under this subsection are theamount that would be recoverable upon a tender less the value of the securitywhen the purchaser disposed of it, and interest at the rate of eight percentper year from the date of the purchase, costs, and reasonable attorneys' feesdetermined by the court.
(c) A person is liable to the seller if the person buys a security bymeans of an untrue statement of a material fact or omission to state amaterial fact necessary in order to make the statement made, in light of thecircumstances under which it is made, not misleading, the seller not knowingof the untruth or omission, and the purchaser not sustaining the burden ofproof that the purchaser did not know, and in the exercise of reasonable care,could not have known of the untruth or omission. An action under thissubsection is governed by the following:
(1) The seller may maintain an action to recover the security, and anyincome received on the security, costs, and reasonable attorneys' feesdetermined by the court, upon the tender of the purchase price, or for actualdamages as provided in paragraph (3).
(2) The tender referred to in paragraph (1) may be made any time beforeentry of judgment. Tender requires only notice in a record of the presentability to pay the amount tendered and willingness to take delivery of thesecurity for the amount specified. If the purchaser no longer owns thesecurity, the seller may recover actual damages as provided in paragraph (3).
(3) Actual damages in an action arising under this subsection is thedifference between the price at which the security was sold and the value thesecurity would have had at the time of the sale in the absence of thepurchaser's conduct causing liability, and interest at the rate of eightpercent per year from the date of the sale of the security, costs, andreasonable attorneys' fees determined by the court.
(d) A person acting as a broker-dealer or agent that sells or buys asecurity in violation of section 409.4-401(a), 409.4-402(a), or 409.5-506 isliable to the customer. The customer, if a purchaser, may maintain an actionfor recovery of actual damages as specified in subsections (b)(1) to (3), or,if a seller, for a remedy as specified in subsections (c)(1) to (3).
(e) A person acting as an investment adviser or investment adviserrepresentative that provides investment advice for compensation in violationof section 409.4-403(a), 409.4-404(a), or 409.5-506 is liable to the client.The client may maintain an action to recover the consideration paid for theadvice, interest at the rate of eight percent per year from the date ofpayment, costs, and reasonable attorneys' fees determined by the court.
(f) A person that receives directly or indirectly any consideration forproviding investment advice to another person and that employs a device,scheme, or artifice to defraud the other person or engages in an act,practice, or course of business that operates or would operate as a fraud ordeceit on the other person is liable to the other person. An action underthis subsection is governed by the following:
(1) The person defrauded may maintain an action to recover theconsideration paid for the advice and the amount of any actual damages causedby the fraudulent conduct, interest at the rate of eight percent per year fromthe date of the fraudulent conduct, costs, and reasonable attorneys' feesdetermined by the court, less the amount of any income received as a result ofthe fraudulent conduct.
(2) This subsection does not apply to a broker-dealer or its agents ifthe investment advice provided is solely incidental to transacting business asa broker-dealer and no special compensation is received for the investmentadvice.
(g) The following persons are liable jointly and severally with and tothe same extent as persons liable under subsections (b) to (f):
(1) A person that directly or indirectly controls a person liable undersubsections (b) to (f), unless the controlling person sustains the burden ofproof that the person did not know, and in the exercise of reasonable carecould not have known, of the existence of conduct by reason of which theliability is alleged to exist;
(2) An individual who is a managing partner, executive officer, ordirector of a person liable under subsections (b) to (f), including anindividual having a similar status or performing similar functions, unless theindividual sustains the burden of proof that the individual did not know and,in the exercise of reasonable care could not have known, of the existence ofconduct by reason of which the liability is alleged to exist;
(3) An individual who is an employee of or associated with a personliable under subsections (b) to (f) and who materially aids the conduct givingrise to the liability, unless the individual sustains the burden of proof thatthe individual did not know and, in the exercise of reasonable care could nothave known, of the existence of conduct by reason of which the liability isalleged to exist; and
(4) A person that is a broker-dealer, agent, investment adviser, orinvestment adviser representative that materially aids the conduct giving riseto the liability under subsections (b) to (f), unless the person sustains theburden of proof that the person did not know and, in the exercise ofreasonable care could not have known, of the existence of conduct by reason ofwhich liability is alleged to exist.
(h) A person liable under this section has a right of contribution as incases of contract against any other person liable under this section for thesame conduct.
(i) A cause of action under this section survives the death of anindividual who might have been a plaintiff or defendant.
(j) A person may not obtain relief:
(1) Under subsection (b) for violation of section 409.3-301, or undersubsection (d) or (e), unless the action is instituted within one year afterthe violation occurred; or
(2) Under subsection (b), other than for violation of section 409.3-301,or under subsection (c) or (f), unless the action is instituted within theearlier of two years after discovery of the facts constituting the violationor five years after the violation.
(k) A person that has made, or has engaged in the performance of, acontract in violation of this act or a rule adopted or order issued under thisact, or that has acquired a purported right under the contract with knowledgeof conduct by reason of which its making or performance was in violation ofthis act, may not base an action on the contract.
(l) A condition, stipulation, or provision binding a person purchasingor selling a security or receiving investment advice to waive compliance withthis act or a rule adopted or order issued under this act is void.
(m) The rights and remedies provided by this act are in addition to anyother rights or remedies that may exist, but this act does not create a causeof action not specified in this section or section 409.4-411(e).
409.5-509. (a) Enforcement of civil liability under this section issubject to the Securities Litigation Uniform Standards Act of 1998.
(b) A person is liable to the purchaser if the person sells a securityin violation of section 409.3-301 or, by means of an untrue statement of amaterial fact or an omission to state a material fact necessary in order tomake the statement made, in light of the circumstances under which it is made,not misleading, the purchaser not knowing the untruth or omission and theseller not sustaining the burden of proof that the seller did not know and, inthe exercise of reasonable care, could not have known of the untruth oromission. An action under this subsection is governed by the following:
(1) The purchaser may maintain an action to recover the considerationpaid for the security, less the amount of any income received on the security,and interest at the rate of eight percent per year from the date of thepurchase, costs, and reasonable attorneys' fees determined by the court, uponthe tender of the security, or for actual damages as provided in paragraph(3).
(2) The tender referred to in paragraph (1) may be made any time beforeentry of judgment. Tender requires only notice in a record of ownership ofthe security and willingness to exchange the security for the amountspecified. A purchaser that no longer owns the security may recover actualdamages as provided in paragraph (3).
(3) Actual damages in an action arising under this subsection are theamount that would be recoverable upon a tender less the value of the securitywhen the purchaser disposed of it, and interest at the rate of eight percentper year from the date of the purchase, costs, and reasonable attorneys' feesdetermined by the court.
(c) A person is liable to the seller if the person buys a security bymeans of an untrue statement of a material fact or omission to state amaterial fact necessary in order to make the statement made, in light of thecircumstances under which it is made, not misleading, the seller not knowingof the untruth or omission, and the purchaser not sustaining the burden ofproof that the purchaser did not know, and in the exercise of reasonable care,could not have known of the untruth or omission. An action under thissubsection is governed by the following:
(1) The seller may maintain an action to recover the security, and anyincome received on the security, costs, and reasonable attorneys' feesdetermined by the court, upon the tender of the purchase price, or for actualdamages as provided in paragraph (3).
(2) The tender referred to in paragraph (1) may be made any time beforeentry of judgment. Tender requires only notice in a record of the presentability to pay the amount tendered and willingness to take delivery of thesecurity for the amount specified. If the purchaser no longer owns thesecurity, the seller may recover actual damages as provided in paragraph (3).
(3) Actual damages in an action arising under this subsection is thedifference between the price at which the security was sold and the value thesecurity would have had at the time of the sale in the absence of thepurchaser's conduct causing liability, and interest at the rate of eightpercent per year from the date of the sale of the security, costs, andreasonable attorneys' fees determined by the court.
(d) A person acting as a broker-dealer or agent that sells or buys asecurity in violation of section 409.4-401(a), 409.4-402(a), or 409.5-506 isliable to the customer. The customer, if a purchaser, may maintain an actionfor recovery of actual damages as specified in subsections (b)(1) to (3), or,if a seller, for a remedy as specified in subsections (c)(1) to (3).
(e) A person acting as an investment adviser or investment adviserrepresentative that provides investment advice for compensation in violationof section 409.4-403(a), 409.4-404(a), or 409.5-506 is liable to the client.The client may maintain an action to recover the consideration paid for theadvice, interest at the rate of eight percent per year from the date ofpayment, costs, and reasonable attorneys' fees determined by the court.
(f) A person that receives directly or indirectly any consideration forproviding investment advice to another person and that employs a device,scheme, or artifice to defraud the other person or engages in an act,practice, or course of business that operates or would operate as a fraud ordeceit on the other person is liable to the other person. An action underthis subsection is governed by the following:
(1) The person defrauded may maintain an action to recover theconsideration paid for the advice and the amount of any actual damages causedby the fraudulent conduct, interest at the rate of eight percent per year fromthe date of the fraudulent conduct, costs, and reasonable attorneys' feesdetermined by the court, less the amount of any income received as a result ofthe fraudulent conduct.
(2) This subsection does not apply to a broker-dealer or its agents ifthe investment advice provided is solely incidental to transacting business asa broker-dealer and no special compensation is received for the investmentadvice.
(g) The following persons are liable jointly and severally with and tothe same extent as persons liable under subsections (b) to (f):
(1) A person that directly or indirectly controls a person liable undersubsections (b) to (f), unless the controlling person sustains the burden ofproof that the person did not know, and in the exercise of reasonable carecould not have known, of the existence of conduct by reason of which theliability is alleged to exist;
(2) An individual who is a managing partner, executive officer, ordirector of a person liable under subsections (b) to (f), including anindividual having a similar status or performing similar functions, unless theindividual sustains the burden of proof that the individual did not know and,in the exercise of reasonable care could not have known, of the existence ofconduct by reason of which the liability is alleged to exist;
(3) An individual who is an employee of or associated with a personliable under subsections (b) to (f) and who materially aids the conduct givingrise to the liability, unless the individual sustains the burden of proof thatthe individual did not know and, in the exercise of reasonable care could nothave known, of the existence of conduct by reason of which the liability isalleged to exist; and
(4) A person that is a broker-dealer, agent, investment adviser, orinvestment adviser representative that materially aids the conduct giving riseto the liability under subsections (b) to (f), unless the person sustains theburden of proof that the person did not know and, in the exercise ofreasonable care could not have known, of the existence of conduct by reason ofwhich liability is alleged to exist.
(h) A person liable under this section has a right of contribution as incases of contract against any other person liable under this section for thesame conduct.
(i) A cause of action under this section survives the death of anindividual who might have been a plaintiff or defendant.
(j) A person may not obtain relief:
(1) Under subsection (b) for violation of section 409.3-301, or undersubsection (d) or (e), unless the action is instituted within one year afterthe violation occurred; or
(2) Under subsection (b), other than for violation of section 409.3-301,or under subsection (c) or (f), unless the action is instituted within theearlier of two years after discovery of the facts constituting the violationor five years after the violation.
(k) A person that has made, or has engaged in the performance of, acontract in violation of this act or a rule adopted or order issued under thisact, or that has acquired a purported right under the contract with knowledgeof conduct by reason of which its making or performance was in violation ofthis act, may not base an action on the contract.
(l) A condition, stipulation, or provision binding a person purchasingor selling a security or receiving investment advice to waive compliance withthis act or a rule adopted or order issued under this act is void.
(m) The rights and remedies provided by this act are in addition to anyother rights or remedies that may exist, but this act does not create a causeof action not specified in this section or section 409.4-411(e).
