Section 12 A 2

The blue sky is the limit for securities liability in washington.

Section 12 a 2. In an action described in subsection a 2 if the person who offered or sold such security proves that any portion or all of the amount recoverable under subsection a 2 represents other than the depreciation in value of the subject security resulting from such part of the prospectus or oral communication with respect to which the liability of that person is asserted not being true or omitting to state a material fact required to be stated therein or necessary to make the statement not. The house of representatives shall be composed of members chosen every second year by the people of the several states and the electors in each state shall have the qualifications requisite for electors of the most numerous branch of the state legislature. Court holdings imply that the cause of action only applies to purchasers in the initial offering not secondary purchases but this is not settled.

Many state securities laws known as blue sky laws are patterned after section 12 a 2 of the securities act of 1933. The interpretation of these state blue sky laws however may diverge significantly from the interpretation of analogous federal securities statutes. Editorial board posted on august 20 2013.

Section 12 a 2 of the securities act provides the buyers of securities an express remedy for material misstatements or omissions made by any seller in connection with the offer or sale of the issuer s securities involving a prospectus or oral communications.