Perhaps the greatest deterrent to misconduct in the securities laws is the civil liability that can be imposed on wrongdoers by harmed investors. The 1933 Act’s Section 11 establishes this liability with respect to false or misleading registration statements. The Omnicare case below explores whether opinions expressed by a company can rise to the status of sanctionable misrepresentations. 

Questions 

1. What triggers liability under Section 11 of the 1933 Act? Can an opinion result in a violation? 

2. What is the primary defense in a Section 11 action? Contrast the defense’s requirements as between a director, officer, or employee versus an outside expert like an accountant, lawyer, or appraiser.