Texas § GV.4008.052 - OFFEROR OR SELLER LIABILITY

§ GV.4008.052. OFFEROR OR SELLER LIABILITY

OFFEROR OR SELLER LIABILITY: UNTRUTH OR OMISSION. (a) Except as provided by Subsection (c), a person who offers or sells a security and from whom another person buys the security is liable to the buyer of the security, regardless of whether the security or transaction is exempt under Chapter 4005 , if the person offers or sells the security by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading. (b) The buyer may sue for: (1) rescission; or (2) damages if the buyer no longer owns the security. (c) Except as provided by Subsection (d), a person offering or selling a security is not liable under Subsection (a) if the person sustains the burden of proof that either: (1) the buyer knew of the untruth or omission; or (2) the offeror or seller did not know, and in the exercise of reasonable care could not have known, of the untruth or omission. (d) The issuer of the security, other than a government issuer identified in Section 4005.017 , is not entitled to the defense in Subsection (c)(2) regarding an untruth or omission: (1) in a prospectus required in connection with an application or registration statement under Subchapter A, B, or C, Chapter 4003 ; or (2) in a writing prepared and delivered by the issuer in the sale of the security. Added by Acts 2019, 86th Leg., R.S., Ch. 491 (H.B. 4171 ), Sec. 1.01, eff. January 1, 2022.