§ 7-11-605 - Civil liability.
SECTION 7-11-605
§ 7-11-605 Civil liability. – (a) A person who offers or sells a security in violation of § 7-11-201,7-11-301(1) or (2), 7-11-305(k), 7-11-501, 7-11-503, or 7-11-505(b) is liableto the purchaser of the security from that person. Upon tender of the security,the purchaser may recover the consideration paid for the security and interestat the legal rate of this state from the date of payment, costs, and reasonableattorney's fees as determined by the court, less the amount of income receivedon the security. Tender requires only notice of willingness to exchange thesecurity for the amount specified. If that purchaser no longer owns thesecurity, the purchaser may recover damages. Damages are the amount that wouldbe recoverable upon a tender less the value of the security when the purchaserdisposed of it, plus interest at the legal rate of this state from the date ofdisposition of the security, costs, and reasonable attorney's fees asdetermined by the court.
(b) A person who offers or sells a security in violation of§ 7-11-501 or 7-11-503 is not liable under subsection (a) if:
(1) The purchaser knew of the untrue statement of a materialfact or omission of a statement of a material fact; or
(2) The seller did not know and in the exercise of reasonablecare could not have known of the untrue statement or misleading omission.
(c) A person who willfully participates in an act ortransaction in violation of § 7-11-502 is liable to a person who purchasesor sells a security, other than a security traded on a national securitiesexchange or quoted on a national automated quotation system administered by aself regulatory organization, at a price that was affected by the act ortransaction for the damages sustained as a result of the act or transaction.Damages are the amount that would be recoverable upon a tender less the valueof the security when the purchaser or seller disposed of it, plus interest atthe legal rate of this state from the date of disposition of the security,costs, and reasonable attorney's fees as determined by the court.
(d) A person who directly or indirectly controls anotherperson who is liable under subsection (a) or (c), a partner, officer, ordirector of the person liable, a person occupying a similar status orperforming similar functions, an employee of the person liable if the employeematerially aids in the act, omission or transaction constituting the violation,and a broker dealer or sales representative who materially aids in the act,omission, or transaction constituting the violation, are also liable jointlyand severally with and to the same extent as the other person, but it is adefense that the person did not know, and in the exercise of reasonable carecould not have known, of the existence of the facts by which the liability isalleged to exist. Regarding a person who, directly or indirectly, controlsanother person who is liable under subsection (c) of this section, it is also adefense that the controlling person acted in good faith and did not, directlyor indirectly, induce the act, omission, or transaction constituting theviolation. Contribution among the several persons liable is the same as incases arising out of breach of contract.